31 October 2014 Poke the adjudicator at your peril

By Swaab Attorneys

In Brief

In years gone by, poking at an adjudicator's decision was a popular past-time for the construction lawyer. That is, when an adjudicator made a determination that the client didn't like (often the paying party), you would be instructed to challenge the validity of the determination in court.
These days, however, adjudicator poking has gone out of fashion due to the courts tendency to enforce the determination (and rightly so). Once in a while, however, some brave soul will have a go in order to avoid the intended consequence of that determination (i.e. payment).
In the recent case of Eastland Truss & Timber Pty Ltd v Matthew John Byrnes (trading as Qualibuilt Constructions), the Supreme Court considered whether a poke at the adjudicator's determination was valid.  You can probably guess what happened next. 

The Facts

Eastland (as contractor) entered into a construction contract with Qualibuilt (as subcontractor) for the supply and installation of a number of timber frames, timber trusses and timber floor systems.
Although there had been previous payment claims and payment schedules served under the Security of Payments Act, the relevant payment claim was Qualibuilt's April 2014 claim for $59,919.94. In response to that claim, Eastland submitted its payment schedule stating that the scheduled amount for payment was $0, zilch, nothing, nada.
Eastland's payment schedule stated that the scheduled amount was zero because Qualibuilt had not provided a number of documents (e.g. insurance certificates and the like) and Qualibuilt was indebted to Eastland for back charges to the tune of $93,345.20. The parties headed to adjudication.
The adjudicator concluded that Qualibuilt's payment claim complied with the requirements of the Act and there did not appear to be a contractual basis for Eastland to recover alleged back charges. Not happy with this determination, Eastland took a brave pill or two and headed to court.

The arguments

Eastland claimed the adjudicator had merely adopted Qualibuilt's claim, had failed to comply with his obligation to undertake a proper valuation of the work performed and had failed to properly value the cost of rectification of defective works.
Qualibuilt said the adjudicator had reviewed the material available to him and analysed each document to the best of his ability in making his determination that Eastland should pay Qualibuilt the job lot.
The decision

The court concluded that the adjudicator had regard to the documents provided to him, which was evident in his reasoning. The court was of the view that the adjudicator had reviewed the amounts in the invoices and it was far from clear that Eastland's set-off charges had been notified to Qualibuilt, or that Qualibuilt had agreed to bear those costs.
In reaching this conclusion, the court determined that the process upon which the adjudicator had embarked was consistent with his obligations under the Act. That is, the adjudicator identified the construction work within the contract and he valued that work.
The court was therefore satisfied that there had been no jurisdictional error on the part of the adjudicator.
The lesson

Poking at an adjudicator's decision should only be done after careful consideration and in limited circumstances otherwise you might find yourself on the receiving end of a poke from a Judge, together with a big legal bill!

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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