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Construction Act Review
The Tip of the Iceberg: Jurisdiction
of Statutory Adjudicators
Samer Skaik*
Adjudicators’ powers and duties; Australia; Jurisdiction; Statutory adjudication
1. Introduction
The intent of the SOP legislation in many jurisdictions1was to help vulnerable
classes of subcontractors to get paid in a timely manner. As such, rapid statutory
adjudication was introduced within the legislation whereas adjudication decisions
are binding and interim pending any subsequent final resolution of the dispute by
arbitration or litigation. However, adjudication decisions can mainly be set aside2
by way of judicial review on grounds of jurisdictional errors which invalidate
adjudication process. Adjudicators are always susceptible to errors when deciding
upon jurisdictional issues due to many factors including the complex drafting of
the SOP legislation, tight timeframes, complexity of raised arguments, a failure
by disputants to raise jurisdictional issues not apparent on the submissions as well
as the inappropriate selection of adjudicators where the referred matter requires a
particular expertise.
There are two types of jurisdictional errors in adjudication. The first type relates
to the existence of essential jurisdictional facts upon which the validity of the
adjudicator’s appointment is founded, including the existence of a construction
contract and a duly made payment claim. The second type relates to the adjudication
making process where adjudicators may exceed their jurisdiction by, for instance,
failing to give either party sufficient opportunity to respond to any issue raised by
the other, or making a decision which has not been advanced by either party. The
scope of this article mainly addresses the first type of jurisdictional errors.
Although respondents often rely upon jurisdictional objections in their
adjudication response to frustrate adjudication process, the SOP legislation seems
to be ill-equipped to appreciate this critical matter which could eventually erode
*RICS Panel Adjudicator (NSW); Lecturer, School of Architecture and Built Environment, Deakin University,
Locked Bag 20001, Vic 3220, Geelong, Australia; Founder and Director, Construction Management Guide, email:
skaik@deakin.edu.au or skaiknet@cmguide.org. The author would like to thank Mr Scott Pettersson for his comments
on an earlier draft of this article. The author has already completed a PhD study in the area of statutory adjudication.
1The legislation is based on two distinct models adopting either UK or NSW model. The legislation in Queensland,
Australian Capital Territory, Victoria, Tasmania and South Australia are all largely based on the NSW Act, which is
often called “the default model”. The legislation on the Isle of Man, and inIreland is largely based on the Housing
Grants, Construction and Regeneration Act 1996 (UK), which is often called “the evaluative model”. The legislation
in New Zealand, Singapore, Malaysia, Western Australia and Northern Territory also follows the UK model but has
much more detailed procedures and provisions. The key difference between the two models is that the “evaluative
model” gives primacy to the parties’ contractual terms relating to payment whilst the “default model” provides
statutory right to payment if the paying party fails to provide what is called a “payment schedule”.
2The main remedies in judicial review to set aside adjudication determinations are pregroative writ of certiorari,
injunction or declaration.
(2017) 33 Const. L.J., Issue 2 © 2017 Thomson Reuters (Professional) UK Limited and Contributors102
the legislative intent. Adjudicators are usually appointed before being served the
response to the adjudication application and neither the appointing authority3nor
the adjudicator would have certainty as to whether or not new jurisdictional
objections will be raised in the adjudication response. Some adjudicators prefer
to wait until the adjudication response is lodged or time barred so they can
commence examining the referred disputed matters.
Moreover, in some jurisdictions such as New South Wales (NSW) and Victoria,
adjudicators have 10 business days to determine adjudication cases from the date
of accepting the appointment, not the date of receiving the adjudication response.4
The problem with this arrangement becomes manifest if the adjudicator appointment
is made on the same day as the lodgement of the adjudication application. In that
case, the adjudication response can be made within five business days from the
appointment.5This means that the appointed adjudicator is left with five business
days only to make a determination. This flawed arrangement ignores the very
possibility that the adjudication response may include complex jurisdictional
arguments that would need much more time from adjudicators, let alone the legal
expertise, to be properly considered in order to reach a reasoned determination
that can resist challenges in court.
The Supreme Courts have a supervisory role over the statutory adjudication
process. In this role, the courts have quashed many adjudication determinations
on the grounds of jurisdictional error in recent years.6This is a problem as the
courts’ involvement in statutory adjudication is contrary to the object of the SOP
legislation and its own early pronouncements relating to minimal intervention by
the courts.7
The courts, by way of judicial review, have dealt with many latent problems
related to jurisdictional issues and there have been an increasing number of court
applications that have been successful in challenging adjudication determinations.
For example, in NSW, Queensland and Victoria, there have been 197 cases
challenging the adjudicator’s determinations in courts to the end of 2013, 48 per
cent of which have been successful.8In 2013 alone, there have been 22 challenge
applications, 77 per cent of which have been successful and adjudication
determinations were set aside. In Western Australia (WA) and Northern Territory
3In this article, this term is used to broadly unify the description of the appointer used in different jurisdictions,
such as authorised nominating authorities, registrar, authorised nominating bodies, prescribed appointers, etc.
4In NSW and Victoria, the 10-day period is calculated from the date of adjudicator’s acceptance of appointment
(see, e.g., NSW Act s 21(3)), while it is calculated in many other jurisdictions from the date of receipt of the adjudication
response (see, e.g., Building and Construction Industry Security of Payment Act 2009 (ACT) (ACT Act) s.23(3);
Construction Contracts Act 2004 (WA) (WA Act)) s.(31)).
5Under the NSW Act the respondent has the right to serve an “adjudication response” within 5 business days after
receiving the adjudication application or 2 business days after the adjudicator is appointed, whichever time expires
later (s.21(1)), provided it had served a payment schedule (s.22(2A)). The adjudicator’s notice of accepting the
nomination should be served within 4 business days after the adjudication application is made, otherwise, the claimant
may opt to withdraw its application (s.26(1)). Under the WA Act, within 14 days of the date on which a party to a
construction contract is served with an application for adjudication, the party must prepare a written response to the
application (s.27). If an application for adjudication is served upon a prescribed appointor, the appointor, within 5
days of being served, must appoint a registered adjudicator to adjudicate the payment dispute concerned and send
the application and any response received by it to the adjudicator (s.28). The adjudicator must release the determination
within 14 days of the date of the service of the response (s.31).
6Recently, the NSW Supreme Court of Appeal concluded that relief is not available to quash an adjudicator’s
determination on any ground other than jurisdictional error in Shade Systems Pty Ltd v Probuild Constructions (Aust)
Pty Ltd [2016] NSWCA 379.
7Brodyn Pty Ltd t/a Time Cost and Quality v Davenport [2004] NSWCA 394 at [51].
8Society of Construction Law Australia, “Report on Security of Payment and Adjudication in the Australian
Construction Industry”, Australian Legislative Reform Subcommittee, February 2014, p.37.
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(NT), to the end of June 2015, 18 out of the 47 of the matters referred to court
(amounting to 38 per cent) have been considered and the adjudicator’s
determination was quashed.9It is worth mentioning that the lower percentage in
WA and NT compared to other Australian States, as addressed above, may be
influenced by the existence of the unique review mechanism within the legislation
that allows an aggrieved party to apply for a review of an adjudicator’s “decision
to dismiss” an adjudication application without making a determination on the
merits on the basis of certain grounds10 and, therefore, acts as a filtering system to
keep many challenges away from the Supreme Court.
The general pattern of the courts’ decisions has been to not support a pre-emptive
application to prevent the adjudication proceeding, thus allowing adjudicators to
determine their own jurisdiction on an interim basis.11 This view is widely supported
with, for example, the duty of adjudicators to “intellectually engage” with the
issues of the dispute.12 In De Neefe,13 Fryberg J commented that:
“It is most unlikely that the legislature would have intended that adjudicators
should be able conclusively to define the scope of their own jurisdiction.”
Vickery J in Sugar Australia,14 suggested that:
“Clearly, if an adjudicator is presented with material or submissions which
bring into question the jurisdiction of the adjudicator, he or she should
determine the question and give reasons for the findings of fact or rulings on
law. If however, the adjudicator’s decision on jurisdiction is challenged in
Court on judicial review, the Court may deal with the matter afresh and receive
additional evidence on the matter if the additional evidence is relevant to the
determination of the question.”
Encouraging adjudicators to determine questions relating to their jurisdiction, as
judicially suggested,15 is a problem considering the fact that adjudicators are not
required by the statute to be legally trained or may not be competent to deal with
these issues as uniquely decided by the Singaporean Court of Appeal in Lee Wee
Lick Terence.16 However, this problem is only the tip of the iceberg. This article
examines not only the problems emerging from the ambiguous SOP legislation
9See Building Commissioner, Annual Report (2014–2015), Construction Contracts Act 2004 (WA), p.10; Department
of the Attorney-General and Justice, Annual Report (2014–2015), Construction Contracts (Security of Payments Act)
2004 (NT).
10 The WA Act requires an appointed adjudicator to first consider an application against qualifying criteria in the
Act that defines a valid claim (s.3) and a payment dispute (s.6). The application must be dismissed if it also fails on
any one of further hurdles in s.31(2)(a)(i–iv). The adjudicator is required to consider whether the payment claim
comes from a valid construction contract, is served in time and in a prescribed manner and is not too complex to
decide within set time limits.
11 Australian Remediation Services Pty Ltd v Earth Tech Engineering Pty Ltd [2005] NSWSC 362 at [13], per
McDougall; Energetech Aust Pty Ltd v Sides Engineering Pty Ltd [2005] 226 ALR 362; and Securcorp Ltd v Civil
Mining & Construction P/L [2009] QSC 249.
12 Laing O’Rourke Australia Construction v H and M Engineering and Construction [2010] NSWSC 818 at [36].
13 De Neefe Signs Pty Ltd v Build1 (Qld) Pty Ltd , [2010] QSC 279 at [11].
14 Sugar Australia Pty Ltd v Southern Ocean Pty Ltd [2013] VSC 535 at [114], emphasis added. .
15 Amongst all jurisdictions operating SOP legislation and encouraging adjudicators to initially decide upon
jurisdiction, Singapore is an exception where it was held by the Court of Appeal in Lee Wee Lick Terence v Chua
Say Eng [2012] SGCA 63 that the adjudicator is not competent to decide whether they were validly appointed to
adjudicate the matter and any jurisdictional objection should be made before the High Court, not the adjudicator. The
court held that the issues relating to the validity of the payment claim or payment response, were jurisdictional issues
which went to the validity of the appointment of the adjudicator.
16 Lee Wee Lick Terence [2012] SGCA 63 at [64].
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and inconsistent case law in dealing with jurisdictional issues but also their impact
upon the operation of the legislation. The article also demonstrates the dilemma
facing adjudicators in dealing with jurisdictional issues. Moving the research
forward, the article concludes by setting out a proposed roadmap to address the
emerging problems.
2. The object of the SOP legislation
Understanding of the object of the SOP legislation helps justify the “pay now,
argue later” policy17 inherent in the adjudication process. The SOP legislation
across jurisdictions has a similar object of facilitating cash flow down18 the hierarchy
of construction contractual chain through a rapid, cost effective and enforceable
adjudication scheme of resolving payment disputes. This contrasts with the
traditional lengthy, expensive but more comprehensive avenues of litigation and
arbitration19. As such, any delay in enforcing the due payment following an
adjudication decision by further litigation hinders the legislative object.
There is no doubt that adjudication process was intended to be a simple and
handy vehicle to vulnerable subcontractors and suppliers to quickly and
inexpensively recover due payments on an interim basis and avoid the financial
burden of engaging experts and lawyers. The Victorian Building Authority
emphasised on that intent of the legislation and stated that
“it is designed to provide a fast and inexpensive process to recover payments
due under a construction contract, without the need for lawyers to become
involved”.20
This may justify the very tight adjudication timeframes as well as the relaxed
regulation and eligibility criteria of adjudicators set out by the legislatures to serve
that purpose. In WA and NT, the SOP legislation have an additional express object
of determining the dispute fairly and as rapidly, informally and inexpensively as
possible.21 The design and purpose of the rapid adjudication process was well
explained as
“a trade-off between speed and efficiency on the one hand, and contractual
and legal precision on the other. Its primary aim is to keep the money flowing
in the contracting chain by enforcing timely payment and sidelining protracted
or complex disputes.”22
Judicially,23 it was noted that the intention of the SOP legislation is to resolve
payment disputes with minimum of delay as well as minimum of opportunity for
court involvement. Also, it was observed that the SOP legislation emphasises speed
and informality.24 Vickery J mentioned the deficiency of the NSW Act in achieving
17 A description originating in the UK but adopted by the courts of Australia, for example John Holland Pty Ltd v
Roads and Traffic Authority of New South Wales [2007] NSWCA 140.
18 In some jurisdictions such as the UK, WA and NT, liability flows both up and down the contracting chain.
19 See Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture [2009] VSC 426 at [33].
20 See http://www.vba.vic.gov.au/practitioners/security-of-payment-sop [Accessed 24 February 2017].
21 See Construction Contracts Act 2004 (WA) s.30; Construction Contracts (Security of Payments) Act 2004 (NT)
s.26.
22 See the Minister’s Second Reading Speech (WA Hansard, 3 March 2004, 275).
23 Brodyn [2004] NSWCA 394 at [51].
24 Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA Pty Ltd) [2007] QSC 333 at [20].
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its object due to the vast amount of judicial review in a very short period of time,
and stated:
“If the Victorian Act became prone to challenges founded on fine legal points,
an important object of the Act would be defeated by the twin adversaries of
cost and time.”25
In another judgment, the same judge stated:
“Unnecessary challenges to the jurisdiction of an adjudicator appointed under
the Act would expose the procedures to delay, cost and expense. The very
purpose of the Act would be compromised.”26
3. Jurisdiction of adjudicators
Adjudicators obtain their jurisdiction to look into the referred disputed matters by
accepting the referral by the appointing authority.27 In order for the appointment
to be valid, certain jurisdictional facts must exist including the existence of
construction contract and the validity of payment claim. Any error by an adjudicator
in establishing these facts may give rise to jurisdictional errors that invalidate the
adjudication process and any resulting determination.28 The emerging case law in
Australia has established a key principle that adjudicators cannot obtain additional
jurisdiction by reaching an incorrect conclusion as to the existence of jurisdictional
facts.29 In Chase Oyster,30 McDougall J followed the High Court authorities,31 to
clarify the circumstances that may lead to jurisdictional errors:
1) the mistaken denial or assertion of jurisdiction, or (in a case where
jurisdiction does exist), misapprehension or disregard of the nature
of or limits on functions and powers; and
2) proceeding in the absence of a jurisdictional fact, disregarding
something that the relevant statute requires to be considered as a
condition of jurisdiction, or considering something required to be
ignored, and misconstruction of the statute leading to misconception
of functions.
3.1 Jurisdictional objections
Whilst respondents are required to mention the reasons for withholding payment
in their response to the payment claim, it is quite possible that jurisdictional
objections are only raised in the adjudication response after the adjudicator has
been appointed. That approach has multiple risks, including having a potentially
valid ground rejected for want of prosecution or excluded by operation of the
25 Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd [2009] VSC 156 at [46]–[47].
26 Grocon [2009] VSC 426 at [115].
27 In some jurisdictions, adjudicators can also be appointed by the mutual agreement of the parties.
28 See Perrinepod Pty Ltd v Georgiou Group Building Pty Ltd [2011] WASCA 217 at [11].
29 See Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QCA 276 at [77]. See also Sugar Australia
[2013] VSC 535 at [107].
30 Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 at [158].
31 See Craig v South Australia (1995) 184 CLR 163, 177–8; Kirk v Industrial Relations Commission (2010) 239
CLR 531, 573–4.
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various statutory provisions32 excluding new reasons.33 The reasons why many
respondents do not address jurisdictional issues in their response to the payment
claim may basically be attributed to practical aspects including the high expenses
and efforts in establishing jurisdictional arguments in responding to each payment
claim34 as well as the proposition that claimants may not be serious enough to take
their claim further to adjudication.
Where respondents raise new jurisdictional objections in the adjudication
response, some adjudicators practicing in Queensland (in determining their fees),
tend to apportion a higher percentage upon respondents despite being successful
in adjudication,35 guided by the unique legislative guidelines regarding the
apportionment of fees.36 The rationale is that the claimant may not have proceeded
with adjudication if the respondent had set out the jurisdictional challenges in its
response to the payment claim and the investment of time and money in serving
an adjudication application probably could have prevented the claimant from
withdrawing it upon its awareness of new issues raised in the adjudication
response.37
In cases where jurisdictional objections are only raised after the appointment
of adjudicators, it is likely that adjudicators may have been selected by the
appointing authority based on their technical competencies that are relevant to the
payment dispute in question. However, it is also the case that many legally trained
adjudicators face difficulties, in dealing with detailed jurisdictional arguments
then moving to consider the merits of the payment dispute, within the rigid
timeframe allowed by the legislation. In part, the issue turns on the approach of
the courts, which may receive information that has not been provided to the
adjudicator and will often be encouraged to consider very fine points of distinction,
so nuanced as to escape all but the finest minds. Having said that, the courts also
acknowledged that the administrative decision makers exercising a quasi-judicial
role should not have the decision analysed by the equivalent of a fine tooth comb.38
In Singapore, the Court of Appeal described the dilemma of adjudicators when
faced with jurisdictional objection in the adjudication response:
“An adjudicator who decides the issue may face one or other of the following
consequences. If he accepts the respondent’s objection and dismisses the
payment claim, the claimant may commence court proceedings against him
32 See e.g., NSW Act s.20(2B).
33 See John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19 at [29] and
Oppedisano v Micos Aluminium Systems [2012] NSWSC 53.
34 In NSW, the Act no longer requires a payment claim to include a statement that it is a payment claim made
pursuant to the Act. This means that any invoice or claim for payment that complies with s.13(1) of the Act is a
payment claim within the meaning of the Act even though the claimant may not intend it to be a payment claim under
the Act. See also, Rail Corp of NSW v Nebax Constructions [2012] NSWSC 6 at [38], perMcDougall J.
35 See JJB Builders Pty Ltd v Civil Contractors (Aust) Pty Ltd , adjudication application no.00005417, 27 July
2015.
36 The Building and Construction Industry Payments Act 2004 (Qld) (Qld Act) as amended in 2014 under (s. 35A)
provides detailed guidelines for adjudicators for the matters to be considered about the proportion of the adjudicator’s
fees including, the conduct of the parties, the relative success of either party in the adjudication and inclusion of
additional reasons for withholding payment in the adjudication response.
37 See JJB Builders Pty Ltd v Civil Contractors (Aust) Pty Ltd , adjudication application no.00005417, 27 July
2015, p.11.
38 Avopiling (NSW) Pty Ltd v Menard Bachy Pty Ltd [2012] NSWSC 1466 at [37]. See also, Red Ink Homes Pty
Ltd v Court [2014] WASC 52, where the court noted at [64]: “Frequently, the chosen adjudicator is not a lawyer and
will have no legal training or expertise … Given that, any court scrutinising an adjudicator’s reasons needs to make
quite considerable allowances to respect the obvious informality of a triage relief regime”.
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to compel him to adjudicate the payment claim. If he dismisses the
respondent’s objection and makes an award, the respondent could still raise
the same objection in enforcement proceedings with respect to his award.
Accordingly, the adjudicator should proceed with the adjudication and leave
the issue to the court to decide.”39
Respondents may keep silent on known jurisdictional objections that may invalidate
the adjudication process hoping to receive a favourable adjudication determination.
Accordingly, respondents will still have the door open to challenge any
determination not made in their favour by way of judicial review. In the UK, there
is an established law principle40 that it is necessary for a party to adjudication,
challenging the jurisdiction of the adjudicator, to reserve its position in relation to
its challenge. If it does not reserve its position effectively, generally it cannot avoid
enforcement on jurisdictional grounds.
Some respondents may not participate in adjudication and seek an injunction
in the Supreme Court to restrain the appointment of an adjudicator on the basis
that the question of jurisdictional entitlement could be decided by the Supreme
Court easily and quickly, and that the respondent ought not be put to the trouble
and expense of making its response to the adjudication application.41 However, it
was judicially clarified that it would not be an easy or a quick matter for the
Supreme Court to determine detailed jurisdictional arguments.42
3.2 Inconsistent case law
When reviewing adjudication determinations, it becomes apparent that the courts
have adopted different approaches with respect to determining the essential
jurisdictional facts that must exist in order for an adjudicator to have jurisdiction
to hear a referred disputed matter. The diversification of judicial interpretation
with respect to jurisdictional facts, as demonstrated in this section, is confusing to
not only construction practitioners, but also many of their claims and legal advisers.
In the NSW Court of Appeal’s decision in Brodyn,43 it was held that the
legislature did not intend that exact compliance with all the more detailed
requirements of the NSW Act was essential to the existence of a determination.44
The court identified five basic and essential requirements45 for the existence of an
adjudicator’s determination as follows46:
1) the existence of a construction contract between the claimant and
the respondent, to which the Act applies (ss.7 and 8);
2) the service by the claimant on the respondent of a payment claim
(s.13);
3) the making of and adjudication application by the claimant to an
authorised nominating authority (s.17);
39 Lee Wee Lick Terence [2012] SGCA 63 at [36].
40 See Allied P&L Ltd v Paradigm Housing Group Ltd [2009] EWHC 2890 at [32].
41 See Australian Remediation Services Pty Ltd v Earth Tech Engineering Pty Ltd [2005] NSWSC 362.
42 Australian Remediation [2005] NSWSC 362 at [13] per McDougall J.
43 Brodyn [2004] NSWCA 394.
44 Brodyn [2004] NSWCA 394 at [55], per Hodgson JA.
45 An additional requirement of providing that measure of natural justice required by the Act is in addition to these
5 (at [55]).
46 Brodyn [2004] NSWCA 394 at [53], per Hodgson JA.
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4) the reference of the application to and eligible adjudicator, who
accepts the application (ss.18 and 19); and
5) the determination by the adjudicator of this application (ss.19(2) and
21(5), be determining the amount of the progress payment, the date
on which it becomes or became due and the rate of interest payable
(s.22(1)) and the issue of determination in writing (s.22(3)(a)).
Brodyn held as good law for a period of around five years until the judicial approach
once again changed track, almost turning full circle, by the authority of Chase
Oyster,47 to a position where jurisdictional error with relief in the form of the
prerogative writ of certiorari was re-established in NSW as the basis for judicial
review. In Chase Oyster, the NSW Court of Appeal considered whether an
adjudicator had the power to determine an adjudication application not made in
compliance with s 17(2)(a) of the NSW Act. In that case, Spigelman CJ observed
at [5] that
“the process of adjudication… is a public, relevantly a statutory, dispute
resolution process, and as a consequence is subject to the supervisory
jurisdiction”.
Justice McDougall emphasised at [149] that:
“The decision in Brodyn appears to assume that there is a distinction between
a basic and essential requirement for the existence of an adjudicator’s
determination and a jurisdictional condition, or jurisdictional fact.”
His Honour went on to conclude that:
“the requirement of s 17(2)(a) are jurisdictional, in the sense that the giving
of notice within the requisite period is a condition that must be satisfied for
a valid application to be made pursuant to s 17(1)”.
As such, it was held that an incorrect finding by the adjudicator that an adjudication
application had been given within the time limit prescribed by s.17(2)(a) of the
NSW Act was vitiated with jurisdictional error.
Furthermore, the “reference date” is another obvious example of the inconsistent
case law regarding jurisdiction of adjudicators. In 2015, the NSW Supreme Court
of Appeal in Lewence,48 overturned the trial judge’s finding that the adjudicator’s
determination of a “reference date” was a finding of jurisdictional fact. The court
held that the question of whether a “reference date” has occurred, which gives rise
to an entitlement to a progress payment under the Act, is not a matter that the court
can quash an adjudication determination over if the adjudicator gets it wrong.49
This decision not only overrules many previous authorities in the NSW,50 but also
seems completely inconsistent with the position of the Queensland courts.51
47 Chase Oyster [2010] NSWCA 190; applying the High Court decision in Kirk v Industrial Relations Commission
(2010) 239 CLR 531; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs)
[2010] HCA 1.
48 Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288.
49 Lewence [2015] NSWCA 288 at [60], [93], per Ward JA; at [119], per Emmett JA; at [133], per Sackville AJA.
50 See, e.g., Patrick Stevedores Operations No.2 Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2014]
NSWSC 1413; Omega House Pty Ltd v Khouzame [2014] NSWSC 1837.
51 See Lean Field Developments Pty Ltd v E and I Global Solutions (Aust) Pty Ltd [2014] QSC 293.
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Furthermore, two months after the decision in Lewence, the Victorian Supreme
Court of Appeal in Saville52 handed down its decision which was completely in
contrast to the decision in Lewence. In that case, the court upheld the decision of
the trial judge who held that the reference date fixed by the adjudicator under the
Act was wrong and that as a consequence the adjudicator ought not to have assumed
jurisdiction and the adjudication determination is of no legal effect.
Notably, the High Court of Australia has recently set aside the decision made
by the Court of Appeal in Lewence.53 The judgment is the first ever judgment by
the High Court in relation to the Australian SOP legislation. The court decided
that the existence of a reference date under a construction contract is a precondition
to the making of a payment claim under the SOP legislation. However, the High
Court has not taken this rare opportunity to provide guidance on the criteria of
diagnosing other preconditions that must exist in order for the adjudicator to have
jurisdiction to hear the matter, which keeps the door open for further analogous
inconsistencies in future.
On the other hand, the courts have also followed opposing conclusions as to
whether the adjudicator’s ‘decision to dismiss an application without making a
determination on the merits is a determination within the meaning of the Act.
InOlympia Group,54 Ball J held that the adjudicator’s decision on a jurisdictional
matter is not a determination within the meaning of the NSW Act. This finding is
in contrast to the views expressed in John Holland.55 In that case, the court held
that the adjudicator’s statement that he had no jurisdiction was a decision within
the purpose of the Act. The latter proposition was followed in Alucity56 that a
determination by an adjudicator that he has no jurisdiction is a ‘determination’ for
which the adjudicator is entitled to his fees.
In this regard, there is a controversial debate as to whether adjudicators erring
in determining jurisdictional questions will still be entitled to their fees. In the UK,
fees were required to be repaid for a total want of consideration in PC.57 In
Australia, this issue has been tentatively raised in a number of matters, but does
not appear to have been ultimately decided.58 The UK authority in this regard may
have a little impact on jurisdictions adopting the NSW model given the facts and
differences in the two legislative models.
3.3 Ambiguous legislative guidelines
The SOP legislation across jurisdictions vary with regard to the clarity or sufficiency
of directions for adjudicators upon how to deal with jurisdictional issues. For
instance, whilst the Victorian and NSW legislation are completely silent about the
duty of adjudicators to decide upon jurisdiction, dismissal of applications for lack
52 Saville v Hallmarc Constructions Pty Ltd [2015] VSCA 318.
53 Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2016] HCA 52.
54 Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd [2011] NSWSC 165 at [14].
55 John Holland Pty Ltd v Schneider Electric Buildings Australia Pty Ltd [2010] QSC 159 at [10]–[19], per
Applegarth J.
56 Alucity Architectural Produce Supply Pty Ltd v Hick [2016] NSWSC 608.
57 PC Harrington Contractors Ltd v Systech International Ltd [2012] EWCA Civ 1371;[2013] 2 All E.R. 69; [2013]
Bus. L.R. 970.
58 See, e.g., Richard Crookes Construction Pty Ltd v CES Projects (Aust) Pty Ltd (No.2) [2016] NSWSC 1229.
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of jurisdiction and entitlement of adjudication fees upon dismissal, the legislation
in WA and Queensland provide some directions59 in this regard.
Table 1 below explains the impact of such ambiguities by illustrating a
comparison between the number of adjudication applications dismissed by
adjudicators for lack of jurisdiction in WA and Victoria in the last two reported
financial years.60 It is worth noting that the figures of WA may include a very few
applications dismissed due to other reasons such as complexity of the dispute. The
statistics show that the vast majority of adjudicators in Victoria have not charged
any fees upon dismissal. In two cases out of the 15, the adjudicator charged fees
of $19,090 and $4,200 respectively, upon dismissal despite the fact that there is
no provision in the legislation giving the adjudicator such an entitlement.61
Interestingly, in the former case, the respondent was liable to pay 50 per cent of
the adjudicator’s fees.
Table 1 Comparison of dismissed adjudication applications in WA and Victoria
VictoriaWADescription
2014–20152013–20142014–20152013–2014Financial year
333224175235Total adjudication applications
1054752Adjudication applications dismissed by
adjudicators
32.2326.922.1Percentage of dismissed applications
(%)
4203,8184,5616,316Mean value of adjudicator’s fees for
claims dismissed ($)
420019,090237,158301,420Total value of adjudicator’s fees for
claims dismissed ($)
1,1393,1004,8714,443Smallest Claim dismissed ($)
365,0861,255,43118,583,36382,995,300Largest claim dismissed ($)
In Queensland, the recent amendment made in 2014 imposed a duty on
adjudicators that they must decide whether or not they have jurisdiction to
adjudicate the application,62 and made adjudicators entitled to fees where they find
an application to be invalid.63 That amendment was made in response to concerns
that some adjudicators may improperly consider themselves economically bound
to find a way of ensuring they have jurisdiction to hear the matter.64
That adjudicator’s duty to decide upon jurisdiction was criticized as it lacks
clarity as to whether an adjudicator can
59 See WA Act s.32(1)(a), s.44(2); Qld Act.
60 See Victorian Building Authority, Security of Payment Adjudication Data, 2013–2014 and 2014–2015; Building
Commissioner, Construction contracts Act 2004 (WA), Annual Reports.
61 However, s.45 of the Building and Construction Industry Security of Payment Act 2002 (Vic) (the Vic Act),
does allow a right to fees if an adjudicator determines an application and s.23 specifically recognises that an adjudicator
may determine that no sum is payable to the claimant.
62 See Qld Act s.25(3)(a).
63 See Qld Act s.35(5)(b).
64 See A. Wallace, “Final report of the discussion paper—Payment dispute resolution in the Queensland building
and construction industry”, 2013, p.245.
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“give himself or herself jurisdiction by determining that he or she has
jurisdiction or must the adjudicator have jurisdiction before he or she can
make a determination under s 25(3)(a)”.65
In the recent case of Camporeale,66 Henry J controversially interpreted that
amendment by noting, obiter dicta:
“The adjudicator was obliged by s 25(3)(a) to decide whether she had
jurisdiction and she reached reasoned conclusions about the validity of the
payment claim grounding that jurisdiction. Given the legislature’s intent that
she performs that task, an error she made in performing it would likely have
been an error within jurisdiction rather than an error going to jurisdiction.”
On the other hand, the amendment does not require adjudicators to avoid
unnecessary expenses or costs in adjudication proceedings.67 As such, the expended
time and efforts in examining the jurisdiction can significantly vary where some
adjudicators may opt to seek further submissions or continue to analyse multiple
jurisdictional objections despite that they have found they do not have jurisdiction
from examining the first objection. This is because some adjudicators assume that
they may have been errant in determining one or more objections.68
3.4 Proactive vs reactive adjudicators
Adjudicators seem to follow a proactive or reactive approach in dealing with
jurisdictional objections which is heavily influenced by the availability of legislative
guidelines and the legal competencies of adjudicators. Proactive adjudicators tend
to satisfy themselves by establishing their jurisdiction before proceeding further
with the determination on the merits even if no jurisdictional objection is raised.
This approach includes cases where respondents do not even participate in
adjudication proceedings, where proactive adjudicators should (as a matter of good
practice and indications from the court) satisfy themselves that they do have
jurisdiction before proceeding with the determinations on the merits.69
Reactive adjudicators usually follow one of three basic approaches depending
on the case. Firstly, an adjudicator may opt to resign and dismiss the case due to
its complexity, by informing both parties and the appointing authority.70 Secondly,
an adjudicator may purposely wait until the statutory period for releasing the
determination expires so the claimant may make a new adjudication application
(often referred to as “allowing the matter to time out”).71 Similarly, some
65 P. Davenport, “An update on security of payment in the construction industry in Queensland”, RICS Cobra 2015,
Sydney.
66 Camporeale Holdings Pty Ltd v Mortimer Construction Pty Ltd [2015] QSC 211 at [36].
67 Qld Act s.35(1)(b) states the fees must be reasonable. Apparently, that statement is inconsistent with the intention
of the amendment as addressed by Andrew Wallace in his final report.
68 See, e.g., Steve Taylor Builder Pty Ltd v Innovation Design and Construct Pty Ltd application no.00005515, 23
July 2015; JJB application no.00005417, 27 July 2015, accessible online: http://xweb.bcipa.qld.gov.au/ars_xweb
/Pages/Default.aspx. [Accessed 24 February 2017].
69 See comments of the court in Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd [2005]
NSWCA 228 at [52]–[53].
70 In O’Donnell Griffin P/L v Davis [2007] WASC 215 at[31], it was held that “an adjudicator who was faced with
a complex question of jurisdiction which he or she felt unable to resolve on the papers would be obliged to dismiss
the application”.
71 In WA, appointed adjudicators may use the existing provisions of the Act to allow the withdrawal request to be
accommodated by enabling the application to run out of time under s.31(3) and be dismissed or by determining that
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adjudicators tend not to reach a conclusion that they do not have jurisdiction to
allow a claimant pursuing its claim before another adjudicator based on the principle
of issue estoppel.72 Thirdly, an adjudicator, driven by commercial factors73 or
directed by courts,74 may assume that he or she has jurisdiction and proceed with
the determination on the merits leaving jurisdictional issues to the court to decide
upon.
It could be argued, however, that none of those approaches appear to give effect
to the basic statutory obligation of adjudicators to determine the application. If
presented with a matter, that is, in the view of the adjudicator, too complex, that
is largely an issue that can be attributed to either insufficient training or poor
practices by the appointing authority. Many experienced adjudicators deal with
complex jurisdictional issues, addressing the issues extensively and to the
satisfaction of the court. This may be assisted by receiving quality submissions
(more prevalent in high value matters) or by requesting further submissions from
the parties and possibly seeking an extension of time to be able to examine all
presented arguments and reach a reasoned conclusion.75
4. The impact of ambiguous legislation and inconsistent
case law
It has become evident, after more than a decade of the operation of the SOP
legislation in major jurisdictions, that the legislative intent of ensuring swift and
inexpensive resolution of payment disputes is yet to be attained consistently. The
adjudication process becomes more akin to curial proceedings. This is driven by
the typical game of many respondents seeking to frustrate adjudication process by
relying upon jurisdictional arguments (with the assistance of lawyers) rather than
arguing the merits of the underlying payment dispute.76 In Victoria, the recent
annual reports show that both claimants and respondents have retained solicitors
in at least 30 per cent of the adjudication cases.77 In addition to the legal
representatives, there is a bank of non-lawyer preparers who, as specialists in the
field may have more expertise in a certain jurisdiction than many law firms.
As a result, adjudicators become obliged to deal with two tasks (i.e. to consider
jurisdictional and merits issues) within the rigid timeframe provided by the
legislation, which was arguably intended to suffice for considering the merits only.
Also, it becomes a crucial requirement for adjudicators to be properly trained on
legal principles such as contract and administrative laws to better deal with complex
jurisdictional arguments. This requirement is faced with the fact that there is no
single SOP legislation that requires adjudicators to be law practitioners or legally
there is no payment dispute to adjudicate. See Building Commissioner, 2014–2015 Annual Report, Construction
Contracts Act 2004 (WA), p.6.
72 Wallace, A, Final report of the discussion paper — Payment dispute resolution in the Queensland building and
construction industry, 2013, p 245.
73 See Wallace, “Final report of the discussion paper—Payment dispute resolution in the Queensland building and
construction industry”, 2013, p.246.
74 See Lee Wee Lick Terence [2012] SGCA 63.
75 See Simcorp Developments and Constructions Pty Ltd v Gold Coast Titans (Property) Pty Ltd adjudication
application no.1057877_1453, 14 May 2010, (adjudicator: Andrew Wallace)
76 See Society of Construction Law Australia, Australian Legislative Reform Subcommittee, “Report on Security
of Payment and Adjudication in the Australian Construction Industry”, February 2014, p.67.
77 See the Victorian Building Authority, Security of Payment Adjudication Data, 2013–2014 and 2014–2015.
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trained to be eligible to practice. Thus, it is not surprising to see, for example, that
73 per cent of registered adjudicators in WA are not legally trained.78
It is submitted that even bright and experienced lawyers advising parties on
adjudication matters have become more uncertain nowadays than at any time
before regarding the likely approach that the court may take in dealing with any
untested or controversial area of the SOP legislation. This unpredictability means
that claimants relying upon a favourable adjudication determination may do so at
their peril. Claimants who, for example, exercise their statutory rights to suspend
works subsequent to the non-payment of adjudication decisions by respondents,
or claimants who have to defend the soundness of adjudication determinations in
their favour which have been challenged by way of lengthy judicial review, may
end up in a serious trap potentially endangering the financial survival of their
business.79 It remains of course also true, that several billion dollars have flowed
through the adjudication process, and it is very likely that many more businesses
would have collapsed without the legislative scheme.
The ambiguous SOP legislation has unnecessarily increased the traffic of
challenge applications before Supreme Courts. The case of Olympia80 is one of
many examples. In that case, the claimant lodged an adjudication application with
the appointing authority. Two days later, the respondent wrote to the appointing
authority highlighting that the work was carried out outside NSW and requesting
the nominated adjudicator to consider, prior to acceptance of the nomination,
whether he or she has the jurisdiction to determine the adjudication application.
The claimant replied that challenging jurisdiction is not possible as it was not
mentioned in the payment schedule and stated that the work was substantially
carried out in NSW. The adjudicator was eventually appointed. Before the receipt
of adjudication response, the adjudicator advised the parties through the appointing
authority on his findings that by referring to the unsolicited submission from the
respondent, the payment claim was invalid due to non-existence of a construction
contact requiring work in NSW. The claimant initiated proceedings seeking urgent
relief claiming, inter alia, that the adjudicator had jurisdiction to hear the matter
and the claimant was entitled to withdraw its application and serve a new
adjudication application because the first adjudicator failed to determine the issue
within the time limits. As a preliminary observation within the narratives of the
judgment, Ball J mentioned, obiter dicta, at [11] that the NSW Act does not prevent
respondents from raising grounds asserting that the adjudicator did not have
jurisdiction to make a determination.81 Ball J further held at [21] that the claimant
is entitled to make a new adjudication application, however, the court would not
permit it to do so unless satisfied that an adjudicator had jurisdiction to determine
the claim. The application was eventually dismissed upholding the adjudicator’s
decision that he had no jurisdiction.
The emerging uncertainties, leading to excessive judicial intervention, are likely
to deter many claimants from going to adjudication, favouring other traditional
78 See P. Yung, K. Rafferty, R.McCaffer and D. Thomson, “Statutory Adjudication in Western Australia:
Adjudicators’ Views”, (2015) 22(1) Engineering, Construction and Architectural Management 71.
79 This risk was well noted in Brodyn [2005] NSWCA 394 at [51], per Hodgson JA; Hickory [2009] VSC 156
[46]–[47], per Vickery J.
80 Olympia Group [2011] NSWSC 165.
81 This proposition was followed in Thiess [2012] QCA 276 at [78], per Philippides J and in Rail Corp [2012]
NSWSC 6 at [38], per McDougall J.
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avenues despite being more expensive and lengthy. As such, the SOP legislation
becomes not only less accessible to many vulnerable firms, but also less convenient
as engaging legal counsel, in order to advise on complex issues and increase the
chances of success, becomes a necessity.
In light of the above analysis, it becomes apparent that the SOP legislation in
each jurisdiction does not provide sufficient directions for most, if not all, of the
following ten controversial matters pending further legislative amendment,
regulations or ultimate court decisions.
1) The duty of an adjudicator to decide upon jurisdiction whether or
not raised by the parties82; and whether any resulting error in deciding
jurisdiction is deemed an error within jurisdiction rather than an error
going to jurisdiction.83
2) The adjudicator’s obligation to dismiss the application due to the
complexity of jurisdictional arguments.84
3) The adjudicator’s determination upon jurisdiction is an adjudicator’s
determination within the purpose of the Act.85
4) The entitlement of respondents to raise new jurisdictional arguments
in adjudication response.86
5) The limitations of respondents seeking judicial review if jurisdictional
objections are not raised in adjudication.87
6) The claimant’s right to provide a reply if new jurisdictional objections
are raised in the adjudication response.88
7) The adjudicator’s right to extend time limits to determine an
application if complex jurisdictional arguments are raised.89
8) The adjudicator’s entitlement of fees upon dismissal for lack of
jurisdiction,90 and the adjudicator’s duty to avoid unnecessary
expenses or costs in deciding upon jurisdiction.91
9) The adjudicator’s obligation to consider whether new jurisdictional
objections are raised by respondents in the apportionment of
adjudication fees.92
10) The adjudicator’s entitlement to fees if the determination is quashed
by court for the adjudicator’s lack of jurisdiction.93
82 Bezzina Developers P/L v Deemah Stone (Qld) P/L [2008] QCA 213 at [61]–[66], where the court found no
obligation to enquire and similarly where the parties do not put a matter in issue, it does not have to be decided. See
also, Kembla Coal and Coke v Select Civil [2004] NSWSC 628 at [37]; Lee Wee Lick Terence [2012] SGCA 63 at
[64].
83 Camporeale [2015] QSC 211 at [36], per Henry J.
84 See O’Donnell Griffin [2007] WASC 215 at [31].
85 See John Holland Pty Ltd v Schneider Electric Buildings Australia Pty Ltd [2010] QSC 159, per Applegarth J
at [10]–[19].
86 See John Holland v Road Traffic Authority [2007] NSWCA 19 at [48]–[49], per Hodgson JA; Thiess [2012]
QCA 276 at [78], per Philippides J; Rail Corp [2012] NSWSC 6 at [38], per McDougall J.
87 See Allied P&L [2009] EWHC 2890 at [32]; Project Consultancy Group v Trustees of The Gray Trust [1999]
HT/99/29 at [14].
88 See, e.g., the Qld Act s.24B; the Vic Act s.21 (2B).
89 See, e.g., the Qld Act s.25B.
90 See Alucity Architectural Product Supply Pty Ltd v Australian Solutions Centre;Alucity Architectural Product
Supply Pty Ltd v Paul J Hick [2016] NSWSC 608.
91 See, e.g., Building and construction Industry Security of Payment Act 2004 (Singapore) s.16(3)(b).
92 See, e.g., Qld Act s.35A(2)(g).
93 See PC Harrington [2013] 2 All E.R. 69; [2013] Bus. L.R. 970. In that case, fees were required to be repaid for
a total want of consideration.
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5. A proposed roadmap to regulate jurisdiction of
adjudicators
The Proposed Roadmap demonstrated in the next paragraph stands as an alternative
measure to another one detailed in a previous article led by the same author,94 in
which it was suggested that:
1) jurisdictional challenges be separated from the merits of the dispute,
so adjudicators can only deal with the real dispute as many
adjudicators lack the legal training and knowledge to adequately
deal with complex jurisdictional matters; and
2) any jurisdictional challenges should be dealt with in parallel by
establishing a legislative review mechanism via a quick, informal
and cost effective process by a competent tribunal which has the
jurisdiction to consider questions of law.
The proposed roadmap seeks to address the observed difficulties and deficiencies
in the operation of the SOP legislation with regard to the jurisdiction of adjudicators.
The roadmap starts from a well-established need for a better designed adjudication
scheme to reinstate the mission of the SOP legislation as originally intended. As
such, the roadmap identifies six key areas (or hold points) which address the ten
controversial matters identified before. The roadmap collates and reconciles the
best relevant practices from each jurisdiction. It stands, however, as a blunt
instrument where it is contended that further empirical research is now needed.
The six hold points are:
1) obligation of respondents to raise jurisdictional objections in the
adjudication response;
2) making the referral of the case after receipt of the adjudication
response;
3) appointment of a legally qualified senior adjudicator if the response
includes jurisdictional objections;
4) providing adjudicators with guidelines to deal with jurisdictional
objections;
5) empowering appointed adjudicators to extend time limits, allow for
claimant’s reply and engaging technical experts; and
6) making adjudicator’s eligible for fees upon dismissal of the case for
lack of jurisdiction, and the obligation to avoid unnecessary expenses.
The discussion below includes a brief rationale of each point.
5.1 Respondent’s obligation to raise jurisdictional objections
in the adjudication response
Since some respondents, who are statutorily entitled to lodge an adjudication
response, opt not to raise jurisdictional challenges before the adjudicator for tactical
reasons as addressed above, it must be made clear in the legislation that when a
respondent participates in the adjudication process, it implies that it accepts that
94 See S. Skaik, J. Coggins, and A. Mills, “Towards Diminishing Judicial Intervention in Statutory Adjudication:
A Pragmatic Proposal” (2016) 32 Const. L.J. 658–74.
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the adjudicator has jurisdiction to hear the matter and confers jurisdiction on the
adjudicator to determine the dispute95 and no appeal for challenging enforcement,
injunction, declaration or by way of certiorari would be entertained unless all
known or likely to be known jurisdictional objections have been raised in the
adjudication response.96 Moreover, respondents must identify on the face of the
response whether they have any jurisdictional objection to facilitate cost and time
effective nomination process by the appointing authority.
5.2 Making the referral of the adjudication case after receipt
of the adjudication response
The appointing authority must hold the referral of the application to an adjudicator
until the receipt of the adjudication response to be better informed of the nature
and complexity of raised arguments in order to marry each complex application
with a suitably qualified adjudicator. Having said that, the appointing authority,
whilst waiting for the lodgement of the response, must start short-listing and
contacting potential adjudicators including legally trained adjudicators. The
appointing authority must eventually refer the application to the most suitable
adjudicator, with a copy to both parties. The appointment must be made within
two business days after the end of the period within which the respondent may
lodge a response. The adjudicator’ time limit to make a determination must start
from the date of appointment, however, the adjudicator must notify the parties of
acceptance of the appointment. The adjudicator must have an express duty to
decline the referral or resign by notifying all parties due to the complexity of the
referred matter so the appointing authority can make another referral. The hold
point would only add a few days to the process but would ensure that the right
horse is picked up for the right course.
5.3 Appointment of a legally qualified senior adjudicator if the
response includes jurisdictional objections
If the adjudication response includes jurisdictional objections, the appointing
authority must only refer the adjudication application together with the response
to a legally qualified adjudicator.97 This approach will increase the confidence of
the parties in the adjudication outcome and diminish the need of judicial
intervention. The adjudicator must have appropriate legal qualifications and relevant
experience. Since these criteria may mean different things to different people, it
is suggested that the appointing authority must establish a proper grading system98
to classify adjudicators based on their qualifications, expertise and track record in
dealing with complex legal matters.
95 See Project Consultancy [1999] HT/99/29 at [14].
96 This proposition was followed by McDougall in Oppedisano v Micos Aluminium Systems [2012] NSWSC 53 at
[42]–[44].
97 See Red Ink Homes [2014] WASC 52 at [122] where it was implied that legal training can help achieve a better
outcome.
98 See, e.g., Queensland Building and Construction Commission, “Adjudicator Grading and Referral Policy”, 2015.
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5.4 Providing adjudicators with guidelines to deal with
jurisdictional objections
Until the time of writing, there are no guidelines or handbooks whatsoever, save
for the UK, that can assist adjudicators in dealing with jurisdictional objections in
each jurisdiction. The need for such guidelines stems from the fact that many
adjudicators, especially those practicing in more than one jurisdiction, may err in
determining their jurisdiction by wrongly applying the legislation of one jurisdiction
into another one.99 Interestingly, excellent Guidance Notes on jurisdictions have
been made available to the UK construction adjudicators since May 2011 in an
attempt to establish best practices to assist adjudicators in determining the threshold
jurisdiction and maintaining jurisdiction.100
Such guidelines become more necessary for adjudicators in cases where no
adjudication response was lodged as they must first decide whether or not they
have jurisdiction before making a determination of the adjudication application.
However, the guidelines as proposed in this hold point, must cater for the dynamic
nature of relevant case law, therefore, must be regularly updated to include any
legislative reform or further judicial interpretation of the legislation. The proposed
guidelines may be developed or at least endorsed by the governing authority in
each jurisdiction in order to stand as a reliable reference.
5.5 Empowering appointed adjudicators to extend time limits,
allow for claimant’s reply and engaging technical experts
If jurisdictional objections are raised, adjudicators must be entitled to extend the
time limit (say, by up to additionalfive business days) by requesting approval with
reasons from the appointing authority to limit abuse of process. The additional
time will help adjudicators to properly consider detailed jurisdictional objections
before proceeding with the determination of the merits of the payment dispute,
notwithstanding the fact that these activities are generally undertaken concurrently.
The adjudicator must also be empowered to allow the claimant at least two
business days to reply to an adjudication response if new jurisdictional issues are
raised to comply with procedural fairness requirements. In complex cases, the
adjudicator must be flexible enough to grant a further reasonable extension of time
to claimants to respond.101
On the other hand, technical issues may be very challenging to legal adjudicators,
such as using the correct formula in calculating due payments.102 Therefore,
adjudicators who are mainly selected for their legal expertise must also be
empowered to appoint technical experts, such as quantity surveyors and engineers,
to assist in complex technical matters that might be raised in addition to legal
99 See, e.g., Department of Construction and Infrastructure v Urban and Rural Contracting Pty Ltd [2012] NTSC
22.
100 Adjudication Society and Chartered Institute of Arbitrators, “Construction Adjudication Practice Guidance:
Jurisdiction of the UK construction adjudicator”, 3rd edn, January 2016.
101 This approach was implemented recently in Queensland under s.24B of its Act, which gives the claimant the
entitlement for 15 business days in which to lodge a reply to news reasons, which period can be extended up to an
additional 15 business days because of complexity, or volume, of new reasons.
102 See, e.g., Uniting Church in Australia Property Trust (Qld) v Davenport [2009] QSC 134. In that case, the
adjudicator, after releasing his original decision and following a request from the claimant, attempted to correct the
decision, using a completely different methodology of calculating prolongation cost.
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arguments. In WA, however, research involving interviews with 22 adjudicators
found that the experts have a neutral position regarding the necessity of experts.103
5.6 making adjudicator’s eligibility for fees upon dismissal of
the case for lack of jurisdiction and the obligation to avoid
unnecessary expenses or costs
To cater for some adjudicators’ practices assuming jurisdiction for commercial
interest as addressed before, adjudicators must always be entitled to reasonable
fees whether or not an application is eventually dismissed for lack of jurisdiction.104
Such entitlement must be made clear in the legislation; otherwise adjudicators may
be disinclined to accept appointments if there is a threat that their fees could be
waived. Having said that, during the decision making process, an adjudicator must
have an express duty to avoid unnecessary expenses and costs. This means that
adjudicators who are satisfied that they have no jurisdiction must make a
determination that they lack jurisdiction and dismiss the case immediately without
analysing it further. It is also suggested that if adjudicators think that the ground
of jurisdictional objection is weak, they must proceed with the substance of the
adjudication in order not to undermine the object of the Act.105
By adopting the entire roadmap, it is arguably fair to deprive adjudicators of
their fees if their determinations are quashed for lack of jurisdiction.106
6. Conclusion
Encouraging adjudicators who are not required to be legally trained to determine
questions relating to their jurisdiction is only the tip of the iceberg. This article
examined the problems, complexities and approaches in dealing with jurisdictional
objections in statutory adjudication. The article further emphasised the problem
of inconsistent case law and ambiguous legislative directions and their negative
impact upon the operation of the SOP legislation. Accordingly, a roadmap was
proposed with six identified hold points towards necessary reform in the SOP
legislation. The impact of the proposed measures is anticipated to not only provide
more transparency and efficiency in the operation of the SOP legislation but also
improve the quality of determinations and eventually reduce judicial intervention.
103 See Yung, Rafferty, McCaffer and Thomson, “Statutory Adjudication in Western Australia: Adjudicators’
Views”, (2015) 22(1) Engineering, Construction and Architectural Management 67.
104 See Alucity [2016] NSWSC 608.
105 See ABB Power Construction Ltd v Norwest Holst Engineering Ltd (2000) 2 T.C.L.R. 831; 77 Con. L.R. 20;
(2001) 17 Const. L.J. 246 .
106 See PC Harrington 2013] 2 All E.R. 69; [2013] Bus. L.R. 970 where it was held that fees were required to be
repaid for a total want of consideration.
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