Examining the approaches to diminish judicial intervention in statutory adjudication in Australia

In Australia, statutory construction adjudication is a fast payment dispute resolution process designed to keep the cash flowing down the hierarchical contractual chain in construction projects. Its rapid, highly regulatory and temporarily binding nature have led to it being often described as a ‘quick and dirty’ process that delivers ‘rough and ready’ justice. Adjudicators often have to grapple with complex legal issues related to jurisdictional facts and interpretation of contract provisions, though the majority of them are not legally trained. This has often led to a poor quality of adjudication outcome for large and complex payment claims which has, in turn, led to a mounting dissatisfaction due to the many judicial challenges to adjudicators’ determinations seen in recent years. The evolving tension between the object of the security of payment legislation and excessive involvement of the courts has often been the subject of comment by the judiciary. This paper aims to examine the legislative and judicial approaches to support the object of the security of payment legislation to ease cash flow. The paper adopts a desktop study approach whereby evidence is gathered from three primary sources – judicial decisions, academic publications and governmental reports. The paper concludes that there is a need to adopt other measures which can provide more convenient relief to aggrieved parties to an adjudication process, such that the adjudication process is kept away from the courts as far as is possible. Specifically, it is proposed that a well-designed expanded legislative review scheme of allegedly flawed adjudication, based on that provided in the Western Australian legislation, might stand as a promising remedy to eliminate the evolving tension.

The big picture: causes of compromised outcome of complex statutory adjudications in Australia

Statutory adjudication has been enacted progressively throughout Australia on a stat-by-state basis over a period of 10 years. The legislation with more emphasis on the Eastern States has come under much criticism recently for failing to facilitate decisions of sufficient quality with respect to complex adjudications. This paper reviews this criticism and discusses the key causes of the unsatisfactory outcome of complex adjudications in Australia. The identified causes are namely flawed appointment, relaxed eligibility and regulation, intimidation of adjudicators, fuzzy jurisdictional boundaries, abbreviated timeframes, limited inquisitorial powers and want of review mechanism. The implication of the research is a better understanding of the nature of the quality of complex adjudication outcome and the relevant worthwhile reform opportunities in Australia, especially with regard to introducing legislative review mechanisms.

Putting the spoils of litigation into the shareholders’ pockets: when can shareholders bring a personal action against the directors of their company?

company is legally incorporated it must be treated like any other independent person with its rightsand liabilities appropriate to itself”.2 A consequence of this is the “proper plaintiff” principleestablished in Foss v Harbottle (1843) 2 Hare 461; 67 ER 189: the proper plaintiff in an action inrespect of a wrong done to a corporation is the corporation itself.3 It is also a “hallowed rule” thatdirectors owe their duties to the company, not the shareholders,4 and so any loss accruing to thecompany as a result of the directors’ breach of their duties is recoverable only by the company.5An obvious problem with this state of affairs is that a company will be unlikely to initiateproceedings against its directors when the company is controlled by those directors.6 While there aregood economic reasons for this division of management and ownership,7 shareholders are left with acritical question: under what circumstances can they initiate proceedings to recover loss suffered as aresult of company directors’ breach of their duties? Although one writer has referred to the“expansive statutory and common law arsenals” available to aggrieved shareholders,8 it seems ratherthe case that there are few effective remedies. For shareholders have no contractual relationship withdirectors,9 and the personal rights conferred on shareholders by statute or general law are largelyprocedural10 and seem a rather ineffective basis for “scrutinising directorial performance”.

Taking statutory adjudication to the next level: a proposal for review mechanism of erroneous determinations

Statutory adjudication was introduced in the security of payment legislation to quickly and fairly resolve payment disputes in the construction industry. One of the interesting features in some legislation is the availability of an express limited right of aggrieved parties to apply for review against erroneous adjudication decisions. In Singapore, the legislation has no equivalent elsewhere in that it provides for a full review mechanism of erroneous determinations considering the fact that adjudicators often have to grapple with complex issues as sheer volume of documents within a very tight timeframe. This paper discusses the various review mechanisms of erroneous adjudication determinations then asks the question as to whether an appropriately devised legislative review mechanism on the merits, should be an essential characteristic of any effective statutory adjudication scheme. The paper concludes by making the case that an appropriately designed review mechanism as proposed in the paper could be the most pragmatic and effective measure to improve the quality of adjudication outcome and increase the disputants' confidence in statutory adjudication. This paper is based upon a paper by the author which received a High Commendation in the Student Division of the Society of Construction Law Australia Brooking Prize for 2016.

Towards diminishing judicial intervention in statutory adjudication: a pragmatic proposal

Statutory adjudication was introduced into the Security of Payment (SOP) legislation as a fast-track payment dispute resolution process aiming to achieve the object of the legislation to facilitate cash flow within the construction contractual chain. As such, adjudication determinations were usually released and enforced on a "pay now, argue later" 1 basis in order to protect a vulnerable class of smaller businesses within the building and construction industry. The SOP legislation was extremely successful in attaining the stated object in the context of small adjudicated payment claims where both parties used to comply with the adjudication determination.

Litigation by shareholders and directors: an empirical study of the Australian statutory derivative action

A number of countries have statutory derivative actions. They allow a shareholder to bring legal action on behalf of the company, typically where the company refuses or is unable to bring the action. The Australian derivative action was enacted in March 2000 to overcome inadequacies with the common law derivative action. In this article the authors present the results of an empirical study of all cases decided under the Australian statutory derivative action during its first 6 years of operation. The study provides insights into the way Australian courts have interpreted and applied this legal remedy. The authors evaluate the statutory derivative action in light of the reasons for its enactment. Issues discussed in the article include the role of shareholder litigation in corporate governance and the rationale for statutory derivative actions.

Towards compassion: statutory powers to regulate impaired doctors in Victoria, 1844-2016.

This article examines the significant changes that parliamentarians have made to the powers of regulators of the Victorian medical profession (regulators) from 1844 to the present day to manage doctors whose ill health has impaired their capacity to practise medicine (impaired doctors). It explores the influences on legislators that altered their conceptions of the best ways of achieving the chief objective that they all shared: to protect the public. The article argues that there was a dramatic progression over this period from parliamentarians confining regulators to responding in a draconian, narrow way to impaired doctors, to empowering them increasingly to adopt a flexible, personalised and empathic regulatory approach. This management style has the potential to support impaired doctors to practise medicine safely, which is beneficial for the practitioners and their patients. Nevertheless, despite legislators’ intentions, in certain circumstances impaired doctors today may still experience regulation that appears punitive and unsupportive. The article therefore recommends that future legislators change regulators’ powers further to encourage them to manage these doctors in particular with greater compassion and thereby improve their chances of practising medicine safely in the future.