The costs of adjudication – the Victorian Supreme Court considers its power to issue an indemnity certificate for adjudicator error in Radman v Open Plan [2020] VSC 318 ||| MTECC News 20.12
This recent decision of Digby J confirms that a party to an application for review of an adjudication determination under the Building and Construction Industry Security of Payments Act 2002 (SOPA) may be entitled to a certificate of indemnity pursuant to the Appeal Costs Act 1998 (ACA).
The grant of a certificate under the ACA gives a party the right to apply to the Appeal Costs Board for compensation for legal costs arising from judicial error or other special circumstances for which the litigating party is not responsible.[1]
The Plaintiff made application on Originating Motion in the Supreme Court of Victoria for judicial review of an Adjudication Determination under the SOPA, seeking, inter alia, certiorari and declaratory relief. The second defendant, the Adjudicator, took no part in the proceedings. The first defendant forwarded written submissions in response, but the proceeding was resolved by consent before any further material was filed and served by the plaintiff. Notably, the first defendant’s agreement to the consent orders indicated that it supported the outcome sought by the plaintiffs in their substantive case in the proceedings: orders which impugned the validity of the Adjudication Determination and which quashed that determination.
The first defendant sought an indemnity certificate under s 4 of the ACA.
Can the ACA apply to applications for judicial review of adjudication determinations?
His Honour first considered two issues under s 3 of the ACA:
- Is a proceeding by Originating Motion to quash an Adjudication Determination in the nature of an ‘appeal’; and
- Is a decision of an adjudicator under the SOPA a decision of a ‘court’.
In relation to the first issue, his Honour referred to Order 56.01 of the Supreme Court (General Civil Procedure) Rules 2010 and the term ‘appeal’ in s 3 of the ACA, and ruled that ‘appeal’ should be given a broad construction to empower the court, when in the exercise of its discretion, to grant certain indemnity in relation to the costs of having an erroneous adjudicative decision made in contested proceedings below.
In relation to the second issue, his Honour referred to authority on the function and powers of an adjudicator under the SOPA, endorsing the notion that the character of the decision-making of an adjudicator is quasi-judicial,[3] and that an adjudicator constituted a tribunal which exercised governmental powers.[4]
His Honour therefore concluded that an adjudicator fell within the meaning of both ‘tribunal’ and ‘other body’ within the meaning of the term ‘court’ in s 3 of the ACA and was amenable to judicial review in the nature of an appeal ‘on and in relation to a question of law’.
Having decided that the proceedings in question enlivened the discretionary application of the ACA, his Honour found, disposing of the proceedings, that on the supporting affidavit material, the second defendant committed a jurisdictional error in finding the plaintiffs were ‘in the business of building residences’, and an award of an indemnity certificate would be consistent with the purpose of the ACA.