The Court of Appeal has overturned the first instance decision
in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd
 NSWSC 770 and reaffirmed the widely accepted position in NSW
(prior to the first Probuild decision) that adjudication
determinations are not amenable to review for non-jurisdictional
errors of law on the face of the record.
The decision in Shade Systems Pty Ltd v Probuild Constructions
(Aust) Pty Ltd (No 2)  NSWCA 379 means that it will be
significantly more difficult for a dissatisfied party to
successfully challenge an adjudication determination, because only
jurisdictional errors of law will render a determination void.
Non-jurisdictional errors of law, no matter how significant, will
not invalidate an adjudication determination.
The practical difficulty with this distinction is that the
divide between what constitutes a jurisdictional error and a
non-jurisdictional error can often be uncertain.
What was the problem affecting adjudication
determinations under the SOP Act?
The primary question considered by the Court of Appeal was how
section 69 of the Supreme Court Act 1970 (NSW) interacted with the
Building and Construction Security of Payment Act 1999 (NSW)
(SOP Act), and in particular whether the SOP Act
should be understood to preclude the Supreme Court's
supervisory jurisdiction (as enshrined in section 69(3) of the
Supreme Court Act) to quash the ultimate determinations of a court
or tribunal in any proceedings if that determination has been made
on the basis of an error of law that appears on the face of the
Prior to 2010, the commonly accepted position in NSW was that
the SOP Act precluded judicial review except where the adjudication
determination failed to comply with an "basic and essential
requirement" of the SOP Act. This was the position stated in
the Court of Appeal's decision in 2004 in Brodyn Pty Ltd v
However, insofar as Brodyn meant that the SOP Act precluded
judicial review for jurisdictional errors of law,
that was overruled in 2010 by the Court of Appeal in Chase Oyster
Bar v Hamo. Since then, there has been some debate about whether
the SOP Act precluded judicial review for
non-jurisdictional errors of law as well. At first
instance the trial judge in Probuild concluded that adjudication
determinations were amenable to judicial review for
non-jurisdictional errors of law.
The Court of Appeal affirms Brodyn and the need for
jurisdictional errors of law
On appeal, the Court of Appeal reconsidered the reasoning in
Brodyn and various other decisions which followed it, and
ultimately affirmed the decision in Brodyn insofar as it related to
non-jurisdictional errors of law. In particular, the Court of
that the express purpose of the SOP Act (as stated in section
3) is to ensure that any person who undertakes to carry out
construction work is entitled to receive progress payments
regardless of whether the contract provides for progress
the SOP Act provides a self-contained scheme for resolving
disputes with respect to payment claims which the parties cannot
contract out of; and
that Brodyn has been consistently followed in a numerous cases
in NSW and in other States,
all of which could be undermined if the Court were to now
A lessee will need to demonstrate that the genuine interests of the lessor will be protected if relief is granted.
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