Security of payment laws can be effective for getting construction contractors paid quickly for the work that they do.
But sometimes it is necessary to challenge an adjudicator's decision. Appeal rights are very limited in the legislation.
Since these laws were introduced around Australia in the late 1990s, it has generally been accepted that an adjudicator's decision cannot be challenged in a court just because of a misunderstanding of the law. In order to be challenged, the adjudicator had to have made a decision that they had no power to make at all.
One NSW Judge has cast doubt on this generally accepted view, though. According to Justice Emmett in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770, the Supreme Courts have inherent powers to review the decisions of statutory decision makers (including adjudicators) and it would require clear words in security of payment legislation to take those powers away.
Such clear words simply do not appear in NSW security of payment legislation, according to this NSW Supreme Court decision.
The decision, and any appeal decision that follows, may open the way for increased challenges against determinations of construction payment disputes by adjudicators in WA as well. At least, in our view, there is nothing in the security of payment provisions of our Construction Contracts Act that expresses any more clearly, an intention to take away the Court's review powers, than there is in the NSW equivalent.
Unless and until the WA Supreme Court expresses its agreement with this view, however, the scope of judicial review in WA will remain uncertain. And it would take a large payment claim to justify running a test case of this kind in WA. But the first step has now been taken in the journey towards greater judicial intervention in the adjudication of construction payment disputes.
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.
