On 15 September 2014 Justice Philip McMurdo of the Supreme Court of Queensland handed down a decision in Caltex Refineries (Qld) Pty Ltd & Anor v Allstate Access (Australia) Pty Ltd & Ors  QSC 223 in which His Honour questioned the applicability of common law principles of issue estoppel to adjudication decisions under Security of Payment (SOP) legislation in NSW and Queensland.
Caltex entered into a long term equipment hire agreement with Allstate under which it hired scaffolding for use in construction works at its oil refineries in NSW and Queensland. Allstate made payment claims in both NSW and Queensland in respect of the scaffolding. Both of those payment claims included substantial claims for damage to the scaffolding. Both claims were taken to adjudication under the NSW and Queensland SOP legislation respectively. Both claims were decided by the same adjudicator in substantially the same terms. The adjudicator found that there was an express term of the hire agreement that Caltex would pay for damaged scaffolding.
Caltex sought to set aside the adjudication decisions in the Supreme Court of Queensland on a number of different grounds.
The court disagreed with the adjudicator that there was an express term that Caltex would pay for damaged scaffolding but found that this error was not a jurisdictional error.
Nevertheless, the court found that the legal argument relied on by the adjudicator was a ground that had not been advanced by Allstate and Caltex had not had an opportunity to respond to that argument. Deciding the matter on a ground not advanced by either party and without giving the parties an opportunity to make submissions was a breach of natural justice that rendered the decision void.
However, it is the court’s comments about issue estoppel and Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190 that are the most interesting aspects of the decision.
The parties had a history of adjudication and previous claims had already been adjudicated between them. A previous adjudicator had found that Caltex was obliged to pay for the damaged scaffolding, but for different reasons to the subsequent adjudicator. Allstate argued that the decisions of the previous adjudicator gave rise to an issue estoppel and that the subsequent adjudicator was obliged to decide the adjudications the same way as the previous adjudicator.
The court rejected the issue estoppel argument. The court reasoned that an issue estoppel did not arise in this case because:
Moreover, the court questioned whether the common law concept of issue estoppel applied to adjudication decisions. McMurdo J commented on Macfarlan JA’s decision in Dualcorp and said that ‘Although Macfarlan JA described the outcome as a result of an issue estoppel, it is clear that his Honour had in mind something less than the operation of the common law doctrine of estoppel as it is usually understood’. That ‘something less’ was said to arise from the combined effect of several provisions of the NSW SOP Act.
It would appear that McMurdo J himself was far from convinced that such an estoppel arose at all as he said ‘The source of this more limited estoppel must be found, if at all, within the legislation. In my view, the legislation does not provide it.’
Nevertheless, McMurdo J appears to accept that Dualcorp provides for the ‘finality of an adjudicator’s decision in the sense of precluding a claimant from pursuing a progress payment inconsistently with determination of an issue by an adjudicator which was fundamental to that decision’.
Other Queensland authorities which had previously considered the application of Dualcorp in Queensland were not discussed in relation to issue estoppel (e.g. Spankie v James Trowse Constructions Pty Ltd  QCA 355; AE & E Australia Pty Ltd v Stowe Australia Pty Ltd  QSC 135; John Holland Pty Ltd v Schneider Electric Buildings Australia Pty Ltd  QSC 159).
The decision raises questions about the conceptual basis and application of ‘issue estoppel’ in relation to adjudication decisions.