In our recent update (HHG Construction Law Series Part 8: Challenging Adjudications: A New Era?) we considered whether Australian courts might be paving the way towards greater judicial intervention in the adjudication of construction payment disputes.
Two recent decisions suggest this is the case, even outside NSW where Supreme Court Justice Emmett has for the first time cast doubt on the need for “jurisdictional error” as a precondition to challenging adjudications.
In the WA case of BGC Contracting Pty Ltd v Citygate Properties Pty Ltd  WASC 88, the Supreme Court quashed an adjudicator’s determination because:
(a) it was delivered less than three hours after the expiry of the time allowed by law, as extended by the consent of the parties; and
(b) the adjudicator had not demonstrated a proper “grappling with the issues” either by giving reasons for decision or making a determination which was clearly based on the terms of the construction contract.
In the Victorian case of Krongold Constructions (Aust) Pty Ltd v SR & RS Wales Pty Ltd  VSC 94, an adjudicator’s decision was overturned for:
(a) insufficiently clear identification of the construction work that had been done;
(b) premature service of a notice under Victorian security of payment legislation;
(c) the omission of some documents dealing with variations; and
(d) “not demonstrating any process of assessment of the value of the claim other than merely adopting the amount claimed”.
Earlier this year, in SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd  VSCA 119, Victoria’s Court of Appeal had overturned an adjudicator’s determination for similar reasons.
Even where jurisdictional and other errors are still treated differently, then, Australian courts seem to be increasingly prepared to review determinations of construction payment disputes by adjudicators. If this trend continues, it may open up the way for contractors and principals to challenge such determinations without being overly concerned about whether the adjudicator’s error is “jurisdictional” even where technically, this still matters.
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This information serves as a general guide and does not constitute legal advice. It is based on our research and experience at the time of publication. Please consult our knowledgeable Legal Team for any specific inquiries or advice relevant to your circumstances, as the content may not have been updated subsequently.