Yesterday, the NSW Court of Appeal (in Martinus Rail v Qube Services) again confirmed that you must get your schedule / certificate right, as there will be minimal court intervention with the decision of an adjudicator. In summary:
- CDI acted for Martinus Rail in an adjudication against Qube Services for work carried out at the Moorebank Intermodal Terminal Project. The project was being carried out by a Commonwealth government business enterprise named National Intermodal.
- Martinus was successful at adjudication, and Qube applied to the NSW Supreme Court to declare parts of the adjudication decision void. Both parties appealed the Supreme Court decision.
- The NSW Court of Appeal made a number of important statements about procedures under the Building and Construction Industry Security of Payment Act NSW (SOPA) in upholding the adjudicator’s decision:
a. The policy of the SOP Act is to ensure that a contractor who carries out construction work for a principal, receives progress payments for carrying out that work. The risk that the contractor might not be able to refund moneys ultimately found to be due to the principal after a successful determination of the merits of the claim under the contract, is a risk which is assigned to the principal. The clear policy of the SOP Act is to “pay now, fight later” to ensure cash flow to contractors, even if the contract has been terminated.
b. The SOP Act creates an entitlement that is to be determined informally, summarily, and quickly and so the Court will not readily overturn an adjudicators decision. This is so even where the quantum of the claim is in the hundreds of $ millions of dollars and even where the adjudicator obtains an extension of time.
c. It is for the adjudicator to determine the content and scope of the Payment Claim and the Payment Schedule. This includes the scope and content of the dispute between the parties and to determine the relationship between the detail contained in the Adjudication Response, alongside the reason for non-payment provided in the Payment Schedule.
d. The adjudicator’s decision is valid even if they misconstrued the contract, the law, or the evidence.
e. It was a matter for the adjudicator to construe a Payment Schedule and, having construed it, to form a view as to what (if any) valid reasons for withholding payment were given. If the adjudicator was of the view that no valid reasons for withholding payment were given in the Payment Schedule, the adjudicator was obliged to decline to consider any further submissions on the issue contained in the Adjudication.
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