On Wednesday the Supreme Court of New South Wales handed down its decision in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770 which confirmed the availability of a further ground of challenge for aggrieved parties to seek quashing of adverse adjudication determinations.

What was the issue?

The issue before the Court was whether an adjudication determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), in circumstances where the adjudicator has made an error of law on the face of the record, is amenable to judicial review (and if such error is found to exist, an order that the determination be quashed).

It had previously been assumed that such avenue was not available on the basis of statements made in the seminal case Brodyn Pty Ltd t/as Time Cost and Quality v Davenport [2004] NSWCA 394 that the scheme of the Act appeared strongly against the availability of judicial review on the basis of non-jurisdictional error of law (i.e error of law on the face of the record).

The Court in Probuild however found that the statements in Brodyn were strictly obiter dicta and the question remained open as to the ability to challenge an adjudication determination that contains an error of law on the face of the record.

Relying upon the post-Brodyn decision of the High Court of Austrlia in Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531, and taking into account the provisions of the Act and the Supreme Court Act (under which a Court has the ability to grant relief for error of law on the face of the record), the Court concluded that it is open to a party to challenge an adjudication determination which contains an error of law on the face of the record

Who is affected?

Claimants, respondents and adjudicators alike under the Security of Payment Act now have to contend with another avenue of challenge available to quash adjudication determinations. This decision will undoubtedly lead to an increase in the number of judicial review applications being made seeking to have adjudication determinations quashed.

The decision brings the position in New South Wales as to the availability of error of law on the face of the record as an avenue of challenge into line with Victoria, where its availability was first confirmed in 2009 by Justice Vickery in the decision of Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd [2009] VSC 156.

Since the decision in Schiavello, it has been further clarified in Victoria that the ability to challenge an adjudication determination on the basis of error of law on the face of the record is only available prior to judgment being entered by the filing of an adjudication certificate in court and as a result, parties have been successful in obtaining injunctions to prevent the filing of certificates to preserve the right to challenge for error of law on the face of the record. It remains to be seen whether the same developments will occur in New South Wales, but given the similarity in legislation and developments between the two jurisdictions, such result seems likely.