Alliance Contracting Pty Ltd v James

Alliance Contracting Pty Ltd was the applicant in proceedings before the Supreme Court of Western Australia, seeking to challenge an adjudication decision made under the Construction Contracts Act 2004 (WA). The respondent, James, had been involved in the adjudication process. The dispute centred on whether certain parts of the adjudication decision should be declared invalid due to jurisdictional errors made by the adjudicator. The applicant argued that the adjudicator had erred by considering a counterclaim by the contractor as part of the payment dispute and by failing to give effect to the decision that a balance was payable in favour of the applicant.

The court was required to determine whether the adjudication decision should be declared invalid in part or in whole due to the alleged jurisdictional errors. The applicant argued that only the part of the adjudication concerning the counterclaim should be declared invalid, while the rest of the decision should remain legally effective. The court needed to consider whether it was appropriate to sever the adjudication decision into parts and declare only certain parts to be invalid, or whether the entire decision should be quashed if any part was found to be affected by jurisdictional error.

The court held that once a court determines that an adjudication decision is affected by jurisdictional error, the entire decision cannot give rise to legal consequences. The court rejected the applicant's argument that only part of the adjudication should be declared invalid, finding that it was not open to grant the relief sought by the applicant. The court concluded that if the adjudicator had made the jurisdictional error alleged by the applicant, the adjudication was liable to be quashed in its entirety. Therefore, the court dismissed the application for relief in respect of the adjudication decision.

The court ordered that the application be dismissed and made orders for the exchange of affidavits and submissions on the question of costs, with that question to be dealt with on the papers. The court's decision was based on the principle that if any part of an adjudication decision is affected by jurisdictional error, the entire decision is liable to be quashed. The applicant's attempt to preserve the whole of the adjudication, except for the adjudicator's conclusion that he had no power to award a sum in favour of the applicant, was not successful.