The High Court of Australia in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd  HCA 4 has held that an adjudication determination under the Building and Construction Industry Security of Payment Act 1999 NSW (‘Act’) may not be overturned by the NSW Supreme Court on the basis that it contains an error of law, otherwise known as a “non-jurisdictional” error (which essentially means an error of fact by the adjudicator and not an error of procedure or process).
The NSW Supreme Court had controversially sought to remit an adjudicator’s determination to the adjudicator for “non-jurisdictional error” in that he had misinterpreted a liquidated damages clause within a construction contract. Probuild contended that the jurisdiction of the Courts could not be ousted by the operation of the Act. Probuild argued that the Courts should have a supervisory role and any intention to exclude such a role must be clearly expressed under the Act.
The High Court held that the issue is one of statutory construction. That is, the context and intent of the Act must be given as much consideration as the relevant express words. In reaching its decision that the Act does evince an intention to exclude review for “non-jurisdictional error” the High Court noted the expeditious nature of the Act and the informal procedures it permits in its attempt to facilitate reformed payment behaviours, and is as such “not conducive to lengthy consideration by an adjudicator of detailed submissions on all questions of law”.
The decision clarifies a long-running debate on the issue of “non-jurisdictional error”, and in doing so, maintains the established view that adjudication determinations should not be reviewed or overturned by the Courts due to assertions of erroneous contract interpretation or mistakes in the application of legal principles. Instead, it is now accepted that the “brutally fast” nature of the processes under the Act anticipate that such errors may be made by adjudicators.
The decision is a win for those supporters of the original objectives of the Act.