Building and construction - adjudication determinations – application for declaration that adjudicator's determination is void – whether adjudicator failed to comply with statutory obligation imposed by section 21(3) of the Building and Construction Industry Security of Payments Act 1999 (NSW) – whether determination void where as at the date by which determination was to be made not all matters in dispute had been decided
Cornerstone Danks Street (plaintiff) engaged Parkview Constructions (first defendant) to design and construct a mixed-use development. A dispute arose between the parties in relation to a discrepancy between the payment claim issued by the first defendant and the payment schedule provided by the plaintiff. Subsequently, the first defendant made an application to the ANA (second defendant) for adjudication of the payment claim. The second defendant referred the matter to an adjudicator (third defendant) who was required to determine the application by 29 April 2014.
The third defendant requested an extension of time of 10 business days until 13 May 2014, which was granted. On 13 May 2014, the third defendant requested a further extension of time. The plaintiff consented to the further extension but the first defendant was not prepared to do so. On 14 May 2014, the first defendant wrote to the second defendant to withdraw its application for adjudication.
On 19 May 2014, the third defendant sent to the second defendant its determination, which included, among other things, the adjudicated amount for which the first defendant claimed payment. In response the plaintiff disputed that the determination was a valid exercise of the adjudicator's powers on the basis that:
- the third defendant had failed to comply with his obligation to determine the application within the time agreed by the parties under section 21(3) of the Building and Construction Industry Security of Payment Act 1999 (NSW);
- by proceeding without the grant of an extension of time, the third defendant had acted outside the scope of his powers; and
- the third defendant had denied the plaintiff natural justice.
The court considered each section of the determination and observed that the third defendant could not have determined the amount of the progress payment prior to 13 May 2014 as he had yet to complete the task of working through a number of issues: whether the first defendant was entitled to profit and overheads, a claim for variation and the value of deletions to the scope of works. The court held that in fact what had been decided as at 13 May 2014 was the 'great bulk' but not all of the disputed matters.
The court decided that, because the third defendant had not completed its task by 13 May 2014, it had failed to determine the application by that date. The application having been withdrawn by the first defendant on 14 May 2014, it was not open to the third defendant to complete its task and finalize the determination.
The plaintiff was successful in the relief sought and the alternative arguments were not considered.