Challenge to Adjudicator’s Determination – Payment Claims

Challenge to Adjudicator’s Determination – Payment Claims

Southern Cross Electrical Engineering v Steve Magill Earthmoving [2018] NSWSC 1027


Southern Cross Electrical Engineering (the Plaintiff) and Steve Magill Earthmoving (the Defendant) entered into a Subcontract whereby the Defendant would perform excavation and trenching works (the Works). The Subcontract was a construction contract for the purposes of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act).
The adjudicator provided his determination, finding that there was $400,158 inclusive of GST owing to the Defendant.

In reaching his determination, the adjudicator dealt with the factual dispute between the parties and assessed the relevant evidence and held:
At [70] ‘Based upon the information provided to me, the respondent has not convinced me that no variation was agreed or that the claimant has over-claimed for the work that is the subject of the respondent’s challenge. I determine that the amount sought by the claimant in its payment claim for this issue is validated, that is, 6,948 linear metres for the HV item including the extra width lengths, and 27,163 linear metres including the extra width lengths. Together this amounts to $716,331 based on $21 per linear metre’.

The Plaintiff filed a summons, seeking a declaration that the determination is void on the basis that the adjudicator erred in expecting the Plaintiff to disprove the variations and that the determination was unreasonable.


i. Whether the adjudicators determination is void by the adjudicator ‘wrongly imposing an onus on the Plaintiff to prove (to his satisfaction) that there had been no ‘variation or change to the scope of works’ required under the subcontract; and

ii. Whether the adjudicators determination was so unreasonable that it did not comply with the requirements for validity under the Security of Payment Act.


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