Australia: An End To Adjudicator Shopping

Last Updated: 29 July 2009
Article by Sean O'Sullivan

Dualcorp v Remo Constructions [2009] NSWCA 69

Initial Adjudication

Dualcorp, a sub-contractor, entered into a construction contract with Remo Constructions, the contractor, to carry out excavation and piling work at a building site at Five Dock, Sydney.

The works were substantially completed by November 2007 and in January 2008, Dualcorp served on Remo Constructions a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), which payment claim consisted of four invoices.

Remo Constructions responded with a payment schedule disputing the bulk of the claim. Dualcorp referred the matter to adjudication under the Act and the adjudicator subsequently determined that a minor portion of the amount claimed was payable under the Act. Dualcorp subsequently registered the determination in the District Court as a judgment debt as provided for under the Act.

Subsequent Proceedings

Dissatisfied with the amount determined in the adjudication, Dualcorp made a further payment claim in March 2008, which claim included two new invoices and the same four invoices that were the subject of the January 2008 payment claim. Remo Constructions failed to issue a payment schedule in response to the March 2008 payment claim and Dualcorp then applied for summary judgment in the District Court in accordance with section 15 of the Act.

NSW District Court Decision

In the District Court, Judge Quirk declined to enter judgment in favour of Dualcorp in the full amount claimed by it and found that it would be an abuse of process for the Court to grant judgment under the Act in relation to the four invoices because these invoices had been the subject of the earlier determination under the Act.

With regards to the previously determined amount, Quirk DCJ stated:

"... the issues as between the parties in respect of those four invoices were dealt with by the adjudicator under the Act and I accept that to seek to have those same invoices in respect of the same work re-agitated is barred because of principles akin to res judicata at least or constitutes an abuse of process..."

Dualcorp appealed the decision.

NSW Court Of Appeal Decision

However in the Court of Appeal, Macfarlan JA largely agreed with the decision of Quirk DCJ and said:

"I consider that the Act when read as a whole manifests an intention to preclude reagitation of the same issues. Thus, if questions of entitlement have been resolved by an adjudication determination, those findings may not in my view be reopened upon by a subsequent adjudication."

"It would in my view be quite contrary to the scheme of the Act to permit claimants simply to resubmit the already adjudicated claims if they were dissatisfied with the adjudication."

"The view that the claimant once disappointed by an adjudicator can seek a different determination from another, or indeed from a succession of others, until a favourable decision is reached would in my view conflict with the policy of the Act to render adjudicators' determinations final on issues which they resolved..."

What This Means For You

The judgment confirms a determination under the Act as being quasi-judicial in nature, which determination will largely bind subsequent adjudicators on issues of both law and fact when valuing subsequent payment claims. Whilst the Act operates only in relation to payments to be made on account and therefore does not in any way impact on a party's contractual rights, this decision will limit a claimant from seeking remedies under the Act through the courts in circumstances where the issues have previously been dealt with by an adjudicator under the Act.

For Respondents. This judgment will provide significant comfort as it curtails the ability of a claimant to make repeated applications under the Act for the same issues in an effort to obtain the most favourable result.

For Claimants. This judgment is significant in that it will mean that you will likely get only one opportunity to have a disputed issue determined under the Act and it is therefore critical that any adjudication applications (or court applications) are properly prepared and include all substantiating information.

Disclosure: Moray & Agnew acted for Remo Constructions in the adjudication proceedings and also in successfully defending the District Court proceedings bought by Dualcorp.

This article was prepared by Sean O'Sullivan, Partner, with the valued assistance of Robert Milne, Solicitor, both from Moray & Agnew's Newcastle office.

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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