Last week, the High Court heard the latest round of debate about whether a court can overturn an adjudicator’s determination of a construction payment dispute without any “jurisdictional error”. This has been the subject of our last two bulletins.
In Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd & Ors  HCATrans 173 (28 July 2016), a principal has applied to the High Court for special leave to appeal against a decision of the NSW Court of Appeal. That Court had overturned a decision of Justice Ball of the NSW Supreme Court who had set aside an adjudicator’s payment award to a construction contractor under NSW security of payment legislation.
Interestingly, this means that:
- the contractor applied for, and was awarded, payment from the principal, by an adjudicator;
- the NSW Supreme Court allowed the principal’s appeal and overturned the adjudicator’s payment award (see Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd  NSWCA 288);
- the Court of Appeal allowed the contractor’s appeal from the Supreme Court’s decision and reinstated the adjudicator’s payment award; and
- now, the principal is asking the High Court for special leave (basically, special permission) to appeal against the Court of appeal’s decision and once again overturn the adjudicator’s award.
Chequered history aside, this case is interesting from a legal perspective as well, because one of the arguments that the principal wants permission to advance in the High Court is that a court does not need to find jurisdictional error by an adjudicator before it can review that adjudicator’s decision. This is the same argument that led Justice Emmett, also of the NSW Supreme Court, to overturn the adjudicator’s decision in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd  NSWSC 770. Intriguingly, in Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd  NSWCA 288:
- the same Justice Emmett was one of the three Judges of the Court of Appeal that reinstated the adjudicator’s decision;
- the leading judgment in the Court of Appeal (by Justice Ward) included a finding that an error of law was not a jurisdictional error; and
- Justice Emmett expressed agreement with that part of the leading judgment and joined in allowing the appeal largely on this basis (at  – ).
The need for jurisdictional error is one of two grounds for appeal to be argued in the High Court if special leave is granted. The other ground is peculiar to the “east coast” model of adjudication and has no obvious relevance in WA. We see clear relevance in WA to the argument about jurisdictional error, though, for reasons discussed in our earlier article.
As this saga unfolds, we will keep updating friends and followers of HHG Legal Group on what it all means for the construction industry in WA and around Australia.
This is only general information and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.