Australia, June 16 -- New South Wales Land and Environment Court issued text of the following judgement May 16:

1. LEEMING JA: I agree with the orders proposed by Mitchelmore JA, and with her Honour's reasons. I also agree with McHugh JA's judgment. What follows presupposes familiarity with the background and issues arising on the appeal, cross-appeal and notice of contention.

2. First, it is important to bear steadily in mind that this litigation concerns only the validity of an adjudicator's determination in favour of BPB in the amount of $277,007.16. The Building and Construction Industry Security of Payment Act 1999 (NSW) (Security of Payment Act) entitles BPB to enforce that certificate as if it were a judgment, but subject to the vital exception that it is without prejudice to the parties' rights under the contract: s 32. Nothing that the adjudicator found, or the Supreme Court determines by way of judicial review, or this Court determines on further appeal, can resolve the underlying contractual dispute between the parties.

3. Secondly, the limitations upon the extent to which judicial review is available reflect the fact that the regime merely establishes a prompt interim resolution of payment disputes, without prejudice to the parties' rights at law. Review is limited to jurisdictional error; mere error of law on the face of the record is insufficient: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4.

4. Thirdly, an adjudicator is unquestionably authorised to determine and apply his or her view of conflicting submissions as to the construction of the contract. Errors of contractual construction will not of themselves amount to jurisdictional error: Probuild Constructions at [79]-[80]; Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd [2018] NSWCA 339 at [16]; Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [144].

5. Fourthly, an adjudicator is also unquestionably authorised to determine and apply his or her view as to a dispute concerning service of a payment claim. But the adjudicator's determination of whether a payment claim has been served is vitally different from his or her determination of a question of contractual construction. The service by the claimant on the respondent of a payment claim was the second of five "basic and essential requirements of the Act" identified by Hodgson JA in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 at [53]. In Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52 at [44], the High Court confirmed that:

service of a payment claim under s 13(1) of the Act is an essential precondition to taking subsequent steps in the procedure set out in Pt 3 of the Act. There is accordingly no dispute that, unless a payment claim answering that description is served, there can be no adjudication application and hence no adjudication within the jurisdiction conferred by s 22 of the Act. That shared understanding of the relationship between s 13(1) and s 22 is undoubtedly correct.

6. The primary judge very properly recognised this. On that basis, his Honour reviewed the finding of fact that there had been valid service, concluding that the adjudicator had erred on this point and that in fact BPB's payment claim had only been served on 11 June 2024, only two days before it made its adjudication application, rather than on 24 April 2024 as BPB had contended and as the adjudicator had found. His Honour was entitled and obliged to redetermine whether and when the payment claim had been served, because service went to the adjudicator's jurisdiction and was an aspect of the appellants' challenge to the certificate.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/196d1a2c2ce13627b4796c2d)

Disclaimer: Curated by HT Syndication.