In our update of 26 October 2023 we referred to the NSW Court of Appeal decision in Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215 that decided that a payment schedule needs to clearly articulate all reasons for non-payment, as the Adjudicator is only required to consider contractual or other reasons that are clearly raised in the schedule and that it will be difficult to argue breach of natural justice on the basis that an Adjudicator has failed to consider one of the parties’ submissions.
In a decision of the NSW Supreme Court last Friday, Stevenson J, in Rogers Construction Group Pty Ltd v Mirage Interiors & Construction Pty Ltd [2024] NSWSC 1344 said:
- An adjudicator under the Act must accord the parties procedural fairness when exercising his or her powers of adjudication. Practically, this will often require that a party be provided with an opportunity to review and make submissions on information to be considered by the Adjudicator that may adversely affect the person’s interests in relation to the decision.
- However, by reason of the structure and scheme of the Act, the “…content of the requisite procedural fairness is reduced” and will only result in invalidity of an adjudication determination if there is a “…significant departure from what would ordinarily be the requirements of procedural fairness for a person exercising a statutory power, and where the departure could be characterised as leading to substantial practical injustice in all the circumstances”.
- This approach reflects the fact that the Act provides for a “rough and ready” process not intended readily to be held invalid on judicial review.
- There will rarely be a basis for quashing an adjudication determination for want of procedural fairness.
Key Takeaway
In NSW, at least, it is becoming harder and harder to overturn an adjudicator’s decision, especially if the reasons for non-payment in the schedule are rejected by the Adjudicator.
This is designed to ensure that cash flow is maintained in the construction industry, but it can be frustrating for parties who feel that the adjudicator’s decision was unfair.
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