A determination by an adjudicator that he has no jurisdiction is a 'determination' for which the adjudicator is entitled to his fees.
The commercial impact of this decision is that only one payment claim can be made for each reference date. Subsequent claims for the same reference date will be invalid. If you have sought adjudication of an invalid payment claim then you will be liable for the costs of the application as well as the fees of the authorised nominating authority and the adjudicator.
Read on for the rest of the analysis by Sandy Godfrey.
Alucity Architectural Produce Supply Pty Limited (Sub-contractor) made a payment claim to Empire Windows Pty Limited (Contractor)—who was not a party to this case—under a building contract. The claim was disputed and then resolved by adjudication. The Sub-contractor then made a second payment claim to the Contractor.
The Contractor responded to the second payment claim with a payment schedule asserting that it was invalid under section 13(5) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) as having been made for the same reference date as the earlier claim. The Sub-contractor submitted an adjudication application (Application), which Paul J Hick (Adjudicator) accepted. The Adjudicator determined that there was no available reference date and accepted that the payment claim was invalid. As there was no valid payment claim the adjudicator determined that he had no jurisdiction to determine the claim.
The Sub-contractor paid the fees of the Adjudicator as well as the service fees of Australian Solutions Centre Pty Ltd (Authority). The Sub-contractor then commenced proceedings to recover the fees asserting that as the Adjudicator had found that he had no jurisdiction, he therefore had not made a determination, so was not entitled to the fees.
At the hearing, the Sub-contractor abandoned claims for misrepresentation, misleading or deceptive conduct and deceit.
Hammerschlag J dismissed the remaining claims, rejecting all of the Sub-contractor's submissions as without merit or foundation and in one instance as 'eccentric', instead finding that:
- the Adjudicator was entitled to his fee as he had given appropriate consideration to the Application before determining that it was invalid under the Act; and
- the Authority was entitled to its fee as it had dealt with the Application correctly according to the Act.
His Honour recorded his disapproval of 'groundless proceedings such as these', out of concern that adjudicators might otherwise be disinclined to accept appointments.