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.
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
With regards to the previously determined amount, Quirk DCJ
"... 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
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
"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
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
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
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”
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).