ABACUS V DAVENPORT & ORS [2003] NSWSC 1027
Supreme Court of New South Wales – 14 November 2003
FACTS
Abacus engaged Renascent to carry out refurbishment of Abacus’ premises at 109 Pitt Street, Sydney. Renascent served on Abacus a Payment Claim under the Building and Construction Industry Security of Payment Act 1999 (‘the Act’) for $1,750,844.48. Abacus responded with a Payment Schedule under the Act and was accompanied with a progress certificate from the Architect approving $372,038.32. Abacus proposed to pay that approved amount.
Renascent was dissatisfied with the response and Mr. Davenport nominated and accepted as the Adjudicator.
Mr. Davenport determined that Renascent was entitled to $819,796.32 made up of the approved amount, variations, on-site costs and backcharges.
Abacus then sought relief to quash Mr. Davenport’s determination on the grounds that Mr. Davenport had committed errors of law on the face of the record. Abacus submitted that Mr. Davenport was bound by the terms of progress certificate issued by the architect and that Mr. Davenport had determined “a delay claim that was never made”. Abacus also sought an order to restrain Renascent from obtaining an adjudication certificate. Abacus relied upon Musico v Davenport [2003] NSWSC 977 to asset that relief does in fact lie in principle. Renascent submitted that there was no jurisdictional error and that if there was errors of law they were errors within jurisdiction.
ISSUES
In principle, does relief lie to quash the determination of an adjudicator under the Act?
If yes, on what grounds will that relief lie?
If yes, are any grounds for relief made out on the facts of the case?
FINDING
Relief in the nature of relief would in principle lie against the determination of an adjudicator under the Act for jurisdictional error (including refusal to exercise jurisdiction, acting in excess of jurisdiction, that is, jurisdictional error of law on the face of the record) and denial of natural justice. The Court held that the submissions contained within the Adjudication Applicationand Adjudication Response should be taken to form part of the record.
The Court held on the facts of the case the Adjudicator had not committed jurisdictional error on the face of the record, and if he did err it was within jurisdiction. The Court rejected Abacus’ argument that an Adjudicator under the Act is bound by the terms of the progress certificate issued, commenting that if Abacus were correct then an Adjudicator could not make a determination that was inconsistent with a certificate that was manifestly wrong, or that had been issued in bad faith or as the result of fraudulent collusion to the disadvantage of the builder.
QUOTE
McDougall J at paragraph 32 held:
“For the reasons that I gave in Musico at paras [46] to [54], an adjudicator under the Act is entitled, in the course of making his or her determination, to make mistakes of law as long as those mistakes do not cause the adjudicator either to exercise a jurisdiction that he or she does not possess, or to decline to exercise jurisdiction that he or she does possess.”
IMPACT
Due to the speedy and informal nature of the Act, Adjudicators may make mistakes in their determinations.
However, the Courts may uphold these mistakes so long as the Adjudicator does not exceed his or her powers or deny a party natural justice.
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Jim Doyle
Tel.: 1800 888 783
jdoyle@doylesconstructionlawyers.com
www.doylesconstructionlawyers.com