In our earlier update concerning the decisions in Southern Han1 and Shade Systems2 we noted the NSW Court of Appeal decision in Shade Systems was under appeal to the High Court.
The High Court has now granted an application for special leave to appeal Shade Systems, together with the decision of the Full Court of the Supreme Court of South Australia in Maxcon Constructions Pty Ltd v Vadasz (No 2)3.
The key issue on these appeals is whether the absence of an express privative clause4 in the security of payment legislation in NSW and South Australia detracts from the longstanding view that judicial review of adjudication determinations is not available for non-jurisdictional error of law is excluded.
In Maxcon, the Full Court of the Supreme Court of South Australia, while indicating that it did not find the reasoning in Shade Systems in favour of the implied exclusion persuasive, found that it was not so ‘plainly wrong’5 that it was not bound to follow it.
Given the longstanding view that judicial review for error of law on the face of the record is excluded, a High Court decision to the contrary could open the floodgates to judicial review applications and impact the flow of payments down the contracting chain. This in turn would seem likely to result in intervention by state parliaments to include express privative clauses.