High Court Rules on ability to take an Adjudicator’s Determination of a Payment Dispute on Judicial Review

The High Court of Australia issued an important decision for construction industry participants. The main question under consideration was the extent to which an Adjudicator’s determination can be overturned by judicial review (by a Supreme Court) where it contains an error. The short answer is that it depends on the type of error.

In Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4, the High Court confirmed that an Adjudicator's determination made under the NSW legislation cannot be overturned by the Supreme Court in circumstances where an Adjudicator makes an error of law other than an error that relates to the Adjudicator's jurisdiction under the NSW legislation. 

Where the error made by an Adjudicator is an error in connection with the exercise of the Adjudicator's power to determine a payment dispute (a jurisdictional error) the Supreme Court will recognise the error under judicial review. The aggrieved party can apply for judicial review and try and convince the Supreme Court of the Adjudicator's error in exercising her/his power.

If the Adjudicator has correctly established her/his power (jurisdiction) to determine a payment dispute and then makes a determination that contains an error unrelated to his/her jurisdictional power, then that decision is wrong in law. However, notwithstanding this error, the Adjudicator's determination is still binding and cannot be set aside by judicial review. 

The aggrieved party may however commence dispute resolution proceedings and have such an error rectified, but not by the judicial review process.

Disclaimer: This short summary does not constitute legal advice and for more information on Adjudications pursuant to the Construction Contracts Act, call NECA Legal (WA) Pty Ltd on (08) 6241 6129 or email  necalegalwa@necawa.asn.au.