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The WA Supreme Court once again offered guidance to adjudicators on the proper way to determine pay disputes under the Construction Contracts Act 2004 (”CA”).

In Cooper & Oxley Builders Pty Ltd v Steensma and Others [2016] WASC 386, the Court reminded adjudicators that:

  1. where a construction contract allows principals to set off their own claims for defects or delays against the contractor’s payment claims, the adjudicator must take those set-off claims into account in evaluating the contractor’s payment claims;
  2. in determining payment claims, adjudicators must take into account all relevant evidence as at the date of the determination, and not ignore evidence just because it was raised for the first time after adjudication had been sought; and
  3. the default terms in Schedule 1 of the CCA should only be implied into a construction contract if that contract does not deal with the matters covered by the implied terms at all, and not just because the contract does not deal with those matters in the same way as the implied term.  For example, if there are no payment terms in the contract at all, the default payment terms are implied.  However, if the contract does contain express payment terms but those terms do not require written notice to be given in circumstances where written notice would be required under the default terms, that is no reason to imply the default terms into the contract.

According to Le Miere J, adjudicators who fail to apply any of these propositions will fall into jurisdictional error and their determinations will be overturned as a result.  It is still necessary to show “jurisdictional error” before an adjudicator’s determination can be overturned by a court, despite what we said in Construction Law Series Part 9 because of two important developments in December 2016, one of which took place in the High Court and the other, in the NSW Court of Appeal.  We will blog about these developments very soon.