February 23, 2018

The High Court of Australia has recently clarified the basis on which a judicial review of an adjudicator’s determination under the Security of Payment Act legislation in South Australia and New South Wales (SOPA legislation) can be sought.

In Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor [2018] HCA 4 (Probuild) the High Court held that adjudication determinations could only be set aside in cases where the determination is infected with jurisdictional error. This position was reaffirmed by the High Court in Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 (Maxcon) in the context of the SOPA legislation in South Australia. The High Court has also confirmed that a determination based on a legally erroneous interpretation of a construction contract is not a valid basis for seeking to quash an adjudicator’s determination.

As part of its reasoning, the High Court in Probuild identified the following relevant considerations regarding the purpose and operation of the SOPA legislation:

  •   It is intended to provide a coherent, expeditious and self-contained adjudication process prioritising cash flow.
  •   The ‘brutally fast’ and informal nature of the adjudication process provided for in the SOPA legislation is not conducive to a lengthy and detailed consideration of submissions on questions of law.
  •   It is not concerned with finally and conclusively determining the entitlements of the parties to a construction contract. That is, a determination under the SOPA legislation is an interim decision only. It is open to parties to have their rights under the construction contract finally determined through separate civil proceedings, providing them with an opportunity to correct the effect of an erroneous determination.

The full decision in Probuild can be found here and Maxcon here.

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