In this case the NSW Supreme Court considered whether the
superintendent can issue a payment schedule, as the agent of
the principal, under the NSW Building and Construction
Industry Security of Payment Act (SOP
Act). The court's stance reinforces the
consistency of its overall approach to addressing issues under
the SOP Act.
Key issues under the spotlight
Bucklands Convalescent Hospital (principal)
and Taylor Projects Group (contractor) entered
into a construction contract based on AS4000-1997
(contract) for the performance of certain
Under the contract, the superintendent was responsible for
issuing progress certificates in response to progress claims
submitted to the superintendent by the contractor. The
principal was obliged under the same clause to make payments to
the contractor in accordance with the progress certificates.
The contractor submitted the relevant progress claim to the
superintendent while sending a copy to the principal. The
superintendent produced and delivered, within the appropriate
timeframe, what it believed to be, a payment schedule stating
that no monies were owed to the defendant.
The contractor gave notice to the principal (under s17(2) of
the SOP Act) that the contractor had not received a payment
schedule or payment in relation to the payment claim and
intended to proceed to adjudication. Subsequently the
contractor argued that as the superintendent didn't
have authority to produce the disputed payment schedule, the
contractor had not received a payment schedule in accordance
with the SOP Act. The contractor applied for adjudication,
contending that the document prepared by the superintendent, in
response to the payment claim was not a payment schedule.
The principal sought to nullify the contractor's
adjudication application in court, by arguing that an essential
requirement of the SOP Act had not been satisfied before the
contractor could make an adjudication application and therefore
the adjudicator had no jurisdiction to hear the complaint. Both
parties accepted the key issue before the court was whether
there had been a failure by the principal to provide a payment
The court's decision
The Supreme Court found that the question as to whether the
superintendent was authorised to issue the payment schedule on
behalf of the principal was a matter for the adjudicator to
determine based on the facts of what the
superintendent's exercising function was under the
As a matter of law, the court could not see why a person who
is a superintendent and who has certifying functions under a
contract cannot be appointed as agent to respond to a payment
claim, under the SOP Act.
This case is consistent with the earlier decisions that the
courts will be reluctant to intervene in the adjudication
process under the SOP Act. This is unless the adjudicator
either fails to comply with a basic requirement of the SOP Act
in making its determination, or fails to apply the principles
of natural justice, or makes a genuine attempt to determine the
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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