Settled by His Honour Justice Blue on 31/7/2013

SETTLED BY HIS HONOUR JUSTICE BLUE ON 31/7/2013

BLUE J

NO.628/2013

TUESDAY, 30 JULY 2013 AT 9.47 A.M.

KENNETT PTY LTD

STEVEN JOHN JANSSEN TRADING AS J & S JANSSEN

BRICKLAYERS PTY LTD

J & S BRICKLAYERS PTY LTD

ADJUDICATE TODAY PTY LTD

ADRIAN ASHMAN

RELATING TO P.19 OF TRANSCRIPT

HIS HONOUR: In this matter, the plaintiff has made an application for summary judgment in respect of a part only of its claim, in particular seeking a declaration that the fourth defendant, Mr Ashman, does not hold any of the qualifications prescribed by regulation 6(b) of the Building and Construction

Industry Security of Payment Regulations and is not a person eligible to be an adjudicator and, accordingly, a declaration that the adjudication determination of the fourth defendant dated 3 May 2013 is invalid and void. The first and second defendants have appeared on the application and do not oppose it. The third and fourth defendants have both been served with the proceedings and entered a notice of address for service. The third defendant has indicated that it does not propose to take any active part in the action and will abide by the event. The fourth defendant has not indicated an attitude but has not filed a defence or any affidavits in the action. Both the third and fourth defendants have been served with the application for summary judgment and affidavits in support of it.

The basis of the application is that regulation 6 of the Building and

Construction Industry Security of Payment Regulations 2011 defines, for the purposes of s.18(1)(b) of the Act, who is eligible to be an adjudicator in relation to a construction contract and it requires both of two matters to be satisfied. The first is that the person has successfully completed a course of training in adjudication of payment disputes in the industry - and there is no allegation by the plaintiff that Mr Ashman has not successfully completed that course - but, in addition, there is a second requirement that the person has one of three alternative types of qualification.

Mr Ashman has made what I will characterise as a submission, which was incorporated by the third defendant and provided to the plaintiff, as to why he claims to fall within one of those three categories. He does not claim that he holds a degree, diploma or other qualification from a university in one of the several areas covered by sub-para.(i). He does not claim that he holds registration as a building work supervisor within the meaning of sub-para.(iii). He does not claim that he is a member or eligible to be a member of five of the six bodies mentioned in sub-para.(ii). However, he does claim that he is eligible to be a member (other than a student member) of the Institute of Arbitrators and

Mediators Australia.

It is the plaintiff’s case that in accordance with the test for summary judgment the plaintiff has established that Mr Ashman is not eligible to be a member of the Institute of Arbitrators and Mediators Australia within the meaning of those words in regulation 6(b)(ii)(D) of the regulations.

The plaintiff has tendered the current constitution of the Institute, which has been current since 2011, and which identifies what are described as 10 categories of membership of IAMA.

Dealing firstly with who is a member and who is not a member from

IAMA’s perspective, I am not satisfied that an associate is not a member from

IAMA’s perspective. It seems to me it is probable that an associate is regarded as a member by IAMA.

In that regard I particularly have regard to article 3, which talks about an associate as falling within the categories of membership; article 30, which talks about transfer from one category of membership to another - it talks about applications for admission to membership, from which it is plain that an associate makes an application for admission to membership - and articles 38-40, which appear to me to define the duties, rights and privileges of membership as generally applicable to all 10 categories. In addition, it is clear that some of the categories of membership within article 3, other than item (f) ‘Members’, are treated as ‘members’. In particular I refer to category (a) ‘Foundation Members’ and category (c) ‘Fellows’.

Nevertheless, the plaintiff contends that merely being a member from the perspective of the organisation does not mean that the person is a member (other than a student member) within the meaning of regulation 6(b)(ii). If I am persuaded that Mr Ashman is not eligible to be an associate within the meaning of the articles of IAMA, it is unnecessary to decide that question of construction for the word ‘member’ in the regulation. I will assume for the time being that an associate is a member within the meaning of regulation 6.

I should say that Mr Ashman does not claim to be eligible to be a Member within the meaning of article 7 of IAMA’s constitution and I note that there are twin requirements for a person to be a Member in article 7(1)(a) and (b) and that part of the second requirement is that the Council deems the person to have such knowledge of - and I think it should be ‘and interest in the subject of arbitration, mediation and/or adjudicator as is deemed sufficient to qualify him for admission as a member, and, secondly, the person has to be elected as a member by

Council.

Turning to article 8, it does not have any equivalent of the first requirement in respect of a Member but it does have an equivalent of the second requirement, which itself has two parts for an associate. The first is that the Council has to deem that they have such knowledge of, and interest in, the subject of arbitration, mediation and/or adjudication as the Council deems sufficient to qualify him or her for admission as an associate. It seems to me that that imposes a subjective test; that is, that it is a matter for the Council to determine what is sufficient to qualify a person for admission as an associate and it is not possible for the Court to identify objectively what those requirements are.

When I say ‘not possible’, I mean not possible in two senses. Firstly, the

Council reserves to itself the decision and so it is simply not appropriate for a court to make a determination and, secondly, in any event, a court has no material on which it could decide if a person has adequate knowledge because there is no objective criteria at all specified in article 8.

It seems to me, in those circumstances, it cannot be said that a person is eligible, within the meaning of regulation 6(b)(ii) of the regulations, to be a member of IAMA unless that person has already persuaded the Council that the person’s knowledge and interest is sufficient to qualify them.

Secondly, article 8(1) requires an applicant to be elected as an associate by the Council. Again there is no criteria for Council’s determination. For example, it might be that Council has a requirement that a person be fit and proper person.

It may be that they impose any other requirement beyond the formal requirements of making a written application and paying the requisite fee.

For those two reasons, particularly the first reason in respect of the deeming by the Council of the person having sufficient knowledge, I conclude that, in accordance with regulation 6(b)(ii), no person is eligible to be a member of IAMA as an associate unless and until they have at least obtained a resolution of the Council that they have sufficient knowledge. There is no suggestion by Mr

Ashman that he has done so and the letter from IAMA indicates that he has not.

The letter from IAMA does demonstrate that he is not a member. I note that he doesn’t claim to be a member, he only claims to be eligible.

For those reasons, I am satisfied that Mr Ashman is not eligible to be a member of IAMA within the meaning of the regulation and that he is not eligible to be an adjudicator for the purposes of s.18(1)(b) of the Act.

In those circumstances, it is not necessary to decide the more difficult question of who is a member whether the regulation simply leaves it to the professional body to determine who is a member and who is not or whether it imposes some additional objective criterion from a category of partnership, and if so, what that is. So I do not decide that question.

For those reasons, I am satisfied that it is appropriate to grant the declaration. Aside from the fact that none of the defendants is opposed to the declaration, I am required, in any event, to exercise my own discretion as to whether to grant declaratory relief because of its nature and particularly I am cautious in doing so because of the absence of the fourth defendant. However, I reiterate that the fourth defendant has been served with the proceedings, has entered a notice of address, has not taken any other steps in the proceedings and has not appeared before me or lodged any affidavits in opposition to the application. So I will grant a declaration that the fourth defendant - is it sufficient if I simply say he is not a person eligible to be an adjudicator or does it need to be more specific about regulation 6(b)?

MR FENWICK ELLIOTT:I don’t think it needs to be more specific. As long as it is clear that the declaration is invalid and that’s the basis upon which -

HIS HONOUR: I will declare that the fourth defendant is not a person eligible to be an adjudicator within the meaning of regulation 6 of the Building and

Construction Industry Security of Payment Regulations 2011 (SA) and a declaration that the purported adjudication determination of the fourth defendant dated 3 May 2013 is invalid and void.

RULING COMPLETED 10.03 A.M.