Australia: To review or not to review: Adjudications and the Construction Contracts Act 2004

In Western Australia, adjudications for payment disputes arising under construction contracts are governed by the Construction Contracts Act 2004 (WA) ("the Act").

If an application for adjudication under section 31(2)(a) of the Act does not satisfy the requirements of the Act, the adjudicator must dismiss it without making a determination on the merits but, if none of the circumstances for dismissal apply, the adjudicator must proceed to make a determination under section 31(2)(b).

Section 46 of the Act allows a person who is aggrieved by a decision made under section 31(2)(a) to apply to the State Administrative Tribunal ("the Tribunal") for a review of the decision.

In the recent decision ofPerrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217, one of the questions that the Court of Appeal had to determine was whether the Tribunal has jurisdiction under section 46(1) of the Act to review a decision not to dismiss an application under section 31(2)(a) of the Act. 

Perrinepod Pty Ltd had applied for a review of a decision of an adjudicator under the Act on the basis that the matter was too complex under section 31(2)(a)(iv).  The adjudicator declined to dismiss the application and proceeded to make the determination on the merits under section 31(2)(b).  The Tribunal dismissed the application for review, following its earlier decision in Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134 that the right of review was limited to a decision of an adjudicator to dismiss an application without making a determination on the merits. Perrinepod Pty Ltd appealed from the decision of the Tribunal. 

The Court of Appeal considered the inconsistent authorities of O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 and Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134. 

Beech J in O'Donnell Griffin stated that section 46(1) must be taken to exclude the availability of appeals to the Supreme Court for errors concerning the existence of the jurisdictional prerequisite facts in section 31(2)(a), and that the questions in section 31(2)(a) are properly to be determined by the adjudicator, and if necessary, on appeal to the Tribunal rather than by applying for judicial review by the Supreme Court. 

However, the Tribunal in Match Projects considered that Beech J's observations on the proper construction on section 46 and the availability of an appeal to the Supreme Court were not binding, and that the only type of decision reviewable by the Tribunal under section 46(1) is a decision to dismiss an application for review under section 31(2)(a).

The Court concluded that the decision in Match Projects was correct, in that a decision by an adjudicator not to dismiss an adjudication application (i.e. a decision to hear and determine the matter) is not reviewable by the Tribunal.

However, the Court concluded that if the adjudicator had proceeded "to determine an application under section 31(2)(b) which ought to have been dismissed under section 31(2)(a), the adjudicator would be acting unlawfully and without power", and in such a circumstance, the Supreme Court would be available to restrain or quash the determination.

Murphy JA stated that "a right of review to the Tribunal where an application is dismissed is conducive to the statutory purpose of 'keeping the money flowing'", but that "no evident statutory purpose is served by expediting a review of a 'decision' 'not to dismiss', with a view to rendering inapplicable the adjudication process facilitated by the Act".

In summary, the Court of Appeal decided that a party cannot apply for Tribunal review of an adjudicator's decision to go ahead and determine a matter, but can instead appeal to the Supreme Court to quash the determination.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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