The WA Supreme Court has once again struck down
adjudicators' determinations of payment disputes under the
Construction Contracts Act 2004. In doing so, the Court
has sought to clarify the proper role of an adjudicator and the
scope of his or her powers.
The decision highlights the continuing need for training and
development of adjudicators in WA. HHG is proud to be one of the
few law firms in WA to offer such services to the construction
The decision also highlights the importance of the High Court
appeal in Southern Han Breakfast Point Pty Ltd v Lewence
Construction Pty Ltd and Ors  HcaTrans 173 (28 July
2016). If upheld, that appeal may well open up and simplify
challenges to adjudication determinations made in error by making
it unnecessary to show that an adjudication error is
'jurisdictional' before the Court will have the power to
set it aside: see [HHG Construction Law Theories Part 9: High Court to Clarify
The decision in Samsung C&T Corporation v Loots
 WASC 330 runs over more than 150 pages. However, its main
effect may be briefly summarised as follows:
An adjudicator had no power under the Construction
Contracts Act 2004 ('Act') to make the award he did,
of $32.4 million to Duro. That award had resulted from a reversal
of a set-off in an earlier progress certificate. At paragraph 
Justice Beech found that this earlier reversal:
'was not referable to, or connected to any part of, the
claim for payment for work done made in [the relevant] progress
In other words, this reversal was not actually a payment
dispute, as defined in the Ac. It was therefore not capable of
being adjudicated under the Act.
Further, by failing even to consider Samsung's submissions
(that is, legal arguments) as to why the adjudicator had no power
to make this $32.4 million award, the adjudicator denied Samsung
procedural fairness (basically, the right to be heard).
At paragraph , Justice Beech held that the adjudicator
must confine his or her attention when determining an application
under the Act, to the payment dispute in question. The adjudicator
must not look beyond that particular payment dispute to earlier
claims, set-offs, counterclaims, etc. between the same
Finally, Justice Beech found that all but one of the
adjudication determinations included work that came outside the
scope of 'construction work' as defined in the Act.
However, His Honour felt that this did not amount to a
jurisdictional error, provided that some part of the work included
in the adjudication did come within the definition of
'construction work'. Therefore, although this also
constituted an error in four of the five adjudications under
consideration, Justice Beech declined to strike down any of them
for this reason.
In summary, then, two of the five determinations challenged in
front of Justice Beech were set aside: essentially on the basis
each adjudicator's reference to matters extraneous to, and
not forming part of, the payment disputes before that adjudicaton
each adjudicator's refusal to consider submissions in
regard to the relevant payment claim.
Two more of the five determinations would also have been set
aside, if his Honour had considered it fatal to include certain
work as part of the adjudication award which in each case exceeded
the definition of 'construction work' under the Act.
We see this as another in a line of cases across Australia which
sharpen the focus on the benefits and purposes of adjudication,
which is ultimately to provide greater commercial certainty to
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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