Australia: Security of payment adjudications: The importance of an adjudicator providing cogent reasoning for a determination

Last Updated: 22 December 2016
Article by Ben Robertson

A recent decision by his Honour Justice McDougall emphasises that where an Adjudicator in an adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) ("SOPA") doesn't provide a reasoned analysis supporting a valuation of construction works, the determination may be declared void for a jurisdictional error.

Although not ultimately decided there was an interesting discourse by his Honour on whether if a determination is quashed for jurisdictional error it should be remitted back to the Adjudicator. The indications from his Honour are that the Court may not remit such matters back to an Adjudicator, which may give parties appealing Adjudications some pause for thought before embarking upon an appeal.

Richard Crookes Construction Pty Ltd v CES Projects (Aust) Pty Ltd (No. 2)

In the matter of Richard Crookes Construction Pty Ltd v CES Projects (Aust) Pty Ltd (No. 2) [2016] NSWSC 1229 (2 September 2016), Richard Crookes succeeded in having an adjudication determination which was adverse to it declared void.


Richard Crookes were engaged to construct a residential apartment in Newcastle and in turn subcontracted CES Projects (Aust) to perform fit out works. Richard Crookes issued a payment schedule of negative $235,900 in response to a payment claim from CES Projects (Aust) of $878,600 (exclusive of GST).

The parties found themselves in a SOPA Adjudication during which the Adjudicator didn't accept the valuation of the works put forward by Richard Crookes. The Adjudicator accepted that there were subcontractors invoices of an amount "well over $500,000" and they went on to conclude that those invoices were sufficient proof that the bulk of the adjudication claim equating to $794,600 was made out.


McDougall J found that the Adjudicator had made a jurisdictional error in failing to provide any reasoned analysis as to how he arrived at the determination amount and in doing so failed in his statutory duty to value contract works which were the subject of the adjudication application.

Distilling The Essential Functions of an Adjudicator

McDougall J referred to the summary of what was required of an Adjudicator as elucidated by Vickery J in SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd [2015] VSC 631. Although that was a Victorian case there were sufficient similarities between the Victorian SOPA legislation and the NSW SOPA legislation so as to make his Honour's observations directly applicable to an analysis of the NSW act.

So what are the essential functions of an Adjudicator flowing from Vickery J's observations? Broadly, they can be broken down into four points.

  1. To determine and apply what the adjudicator considers to be the true construction of the Act in the light of the current case law.
  2. To determine and apply what the adjudicator considers to be the true construction of the construction contract.
  3. At a minimum to made the following critical findings –
    • A determination as to whether the construction work the subject of the claim has been performed (or whether the relevant goods and services have been supplied); and
    • The value of the work performed (or the value of the goods and services supplied) having regard to the contract terms, contract price, rates or prices, the estimated cost of rectifying defective works
  1. >
  2. To make critical findings on the whole of the evidence presented (and not having decided that the respondent's submissions and material should be disregarded simply adopting the amount claimed by the claimant).

Quashing the Determination And The Issue of Remitting Matter Back To The Adjudicator

Without having filed a cross-summons and cross-claim list statement the solicitor for the subcontractor attempted to persuade McDougall J that if the Court were to grant the relief sought that the matter should be remitted back to the Adjudicator for further consideration.

His Honour was not convinced that it was incumbent upon him to decide that issue in the absence of a cross-summons and cross-claim list statement.

Nevertheless his Honour provided insightful commentary on the issue which highlights that the Court may not be minded to remit a similar matter for consideration by an Adjudicator where the Court has quashed an Adjudicator's determination on the basis of a jurisdictional error. His Honour looked at three recent decisions in Victoria and NSW where adjudications were remitted to an Adjudicator for further consideration after determinations had been quashed, however, common to all were that a non-jurisdictional error had been made. McDougall J made an observation that as a general principle where a matter is quashed because an inferior court or tribunal lacked jurisdiction there is no point in remitting the matter because the outcome has been determined by the quashing order.

Ultimately, McDougall J did not consider that the matter had been properly argued before him and raised issues which had not been fully explored such as the extent to which remitting the matter to the Adjudicator was consistent with, permitted by, or effective for the purposes of the SOPA.


In summary Adjudicators that do not provide reasoned analysis for how they reach a finding and merely accept a claimant's position without a rational assessment of value face their determination being declared to be void for jurisdictional error.

Prior to embarking on an appeal, especially if a claimant is bringing an appeal, parties should give consideration to whether a cogent argument can be put for remitting a matter back to an Adjudicator for further consideration in the event that a determination is quashed. The discussion by McDougall J in this matter indicates that parties may face an uphill battle in persuading the Court that such an order can or should be made.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Ben Robertson
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.