Builtcom Construction Pty Ltd v VSD Investments Pty Ltd atf the VSD Investments Trust; VSD Investments Pty Ltd atf the VSD Investments Trust v Builtcom Construction Pty Ltd

[2025] NSWSC 250

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Builtcom Construction Pty Ltd v VSD Investments Pty Ltd atf The VSD Investments Trust; VSD Investments Pty Ltd atf The VSD Investments Trust v Builtcom Construction Pty Ltd [2025] NSWSC 250

Hearing dates:

12-13 March 2025; further submissions on 14 March 2025, 2, 3, 7 and 9 April 2025

Date of orders:

11 April 2025

Decision date:

11 April 2025

Jurisdiction:

Equity - Commercial List

Before:

Peden J

Decision:

At [111]

Catchwords:

BUILDING AND CONSTRUCTION — Adjudication — Judicial review — Whether adjudicator’s determination affected by jurisdictional error on the basis that he erroneously found that certain submissions were not “duly made” or failed to consider submissions about set-off — Whether orders ought to be made in the nature of mandamus compelling adjudicator to determine parts of adjudication application which remain undetermined because of jurisdictional error

BUILDING AND CONSTRUCTION — Adjudication — Declaration — Whether declaration about validity of new adjudication application ought to be made

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999 (NSW) ss 13, 14, 17, 20, 22, 26, 32A

Cases Cited:

A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2024] NSWCA 7

Ali v Minister for Home Affairs (2020) 278 FCR 627

Cardinal Project Services Pty Ltd v Hanave Pty Ltd (2011) 81 NSWLR 716

CC (Builders) Aust Pty Ltd v Milestone Civil Pty Ltd [2019] NSWSC 1251

Ceerose v A-Civil Aus Pty Ltd (2023) 112 NSWLR 225

Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229

Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190

EnerMech Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (2024) 115 NSWLR 56

Hanson Construction Materials Pty Ltd v Decmil Australia Pty Ltd [2024] VSC 361

Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty Ltd [2005] NSWSC 1129

John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258

John Holland Pty Ltd v Roads & Traffic Authority of NSW [2007] NSWCA 19

Kirk v Industrial Court of New South Wales (2010) 239 CLR 531

Leighton v Arogen [2012] NSWSC 1323

LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12

Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49

Miller v LMG Building Pty Ltd [2023] NSWSC 995

Minister for Commerce v Contrax Plumbing [2004] NSWSC 823

Parkview Constructions Pty Ltd v Sydney Civil Excavations Pty Ltd [2009] NSWSC 61

Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd [2009] NSWCA 157

Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1

Procon Developments (Australia) Pty Ltd v Hi-Cal Bricklaying [2025] QSC 67

R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389

State Water Corporation v Civil Team Engineering Pty Ltd [2013] NSWSC 1879

Trysams Pty Ltd v Club Constructions (NSW) Pty Ltd [2008] NSWSC 399

Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Builtcom Constructions Pty Ltd (plaintiff in 2025/00046823; first defendant in 2025/00048213)
VSD Investments Pty Ltd atf The VSD Investments Trust (first defendant in 2025/00046823; plaintiff in 2025/00048213)
Chris Thompson (second defendant in 2025/00046823 and 2025/00048213)

Representation:

Counsel:
M Christie SC and D Hume (Builtcom Constructions)
G A Sirtes SC and M J Smith (VSD Investments)

Solicitors:
Fortis Law (Builtcom Constructions)
HWL Ebsworth (VSD Investments)

File Number(s):

2025/00046823
2025/00048213

Publication restriction:

Nil

JUDGMENT

1. Builtcom Constructions Pty Ltd and VSD Investments Pty Ltd were parties to a construction contract dated 27 October 2022. Under that contract, Builtcom was to carry out work to build a 30-story mixed residential-commercial development in Burwood, New South Wales.

2. On 25 October 2024, VSD terminated the contract for convenience.

3. Builtcom and VSD are in dispute about an adjudicator’s determination of Builtcom’s final payment claim for work purportedly performed under the parties’ contract in the exercise of power conferred by the Building and Construction IndustrySecurity of Payment Act 1999 (NSW) (SOP Act).

4. That adjudication determination, dated 3 February 2025, found that VSD was required to pay Builtcom the sum of $8,467,232.13.

5. Builtcom alleged that the adjudicator rejected a number of items in its payment claim by not having regard to its submissions (Builtcom’s contested submissions) which were “duly made”. The adjudicator concluded that “new” material provided in Builtcom’s submissions went beyond the scope of the items in the payment claim and determined those items at $0.

6. While there were multiple items that were treated this way, the parties agreed that it was unnecessary for me to consider them individually, because the adjudicator approached them all in the same way. An example of the way the adjudicator decided these items was:

… it is irrefutable that the new documents, which were neither included, referenced or otherwise mentioned in the payment claim, were only advanced in the adjudication application. I am firmly of the view that had the new documents relied upon and included in the adjudication application been present in the payment claim, [VSD] would most likely have changed its valuation or reasoning in the payment schedule.

Further, … [Builtcom] included a single figure in its payment claim and did not provide sufficient details in its payment claim to enable [VSD] to accept or reject or properly assess each claim as the missing details were only included in the adjudication application. … I am of the view that the … claims … should each be valued at $Nil and value each as such.

7. Further, the adjudicator concluded that “the payment claim was not explained or substantiated, [and] there was a complete absence of any supporting documents”.

8. The determination was made, having regard to the payment claim and VSD’s schedule, which included VSD’s complaints about multiple items, such as “no supporting documents hav[ing] been provided to enable VSD to understand and verify the claim.”

9. VSD made set off claims in relation to alleged items of defects, that had been “substantiated by thorough site inspections and site survey by specialist contractors at the site following the date of handover”. Further, there were amounts claimed which were said to be overpayments by VSD.

10. In relation to VSD’s set off claims, the adjudicator determined:

I am unable to accept [VSD’s] arguments for the following reasons:

a. Section 20(2B) of the Act precludes me from considering the supporting documents in relation to site inspections and site survey by specialist contractors at the site following the Date of handover [when VSD terminated].

b. I agree with [Builtcom] that the set off claims as they appear in the payment schedule are “global claims” in nature. There is no particularization or ability to analyse the value or calculation of the individual claims.

c. [VSD] has not provided effective notices pursuant to the [contract] of the purported defects.

d. If there are genuine defects [Builtcom] has not been afforded the opportunity to attend to the rectification of its works.

e. Prima facie, [VSD] has repeated the errors of [Builtcom] in relation to [Builtcom’s] claims for its termination etc costs.

Accordingly, I find the set off claims are best described as general damages claims for which I lack jurisdiction and consequently I am obliged to value them at nil for the purpose of this adjudication determination [referencing EnerMech Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (2024) 115 NSWLR 56].

11. VSD did not suggest that the adjudicator’s reference to EnerMech and its effect of precluding claims for damages was erroneous. However, VSD claimed that the adjudicator erred by:

1. Failing to consider the set-off claim material, being submissions which were “duly made” for the purposes of s 22(2)(c) SOP Act, because he misunderstood s 20(2B), which did not preclude consideration of its submissions; and

2. Not considering the overpayment set off claims at all, which was “material” to his decision.

12. It was common ground between Builtcom and VSD that if jurisdictional error is established, the Court has power under s 32A SOP Act to sever the part of the adjudicator’s determination affected by jurisdictional error and to make an order upholding the untainted part.

13. However, Builtcom and VSD are also in dispute about the appropriate relief. In particular, Builtcom submitted that the Court has the power, and should exercise that power, to “remit” any tainted part of the determination back to the adjudicator, whereas VSD contended that partial remittal is not available.

14. VSD did not seek any relief for the part of the adjudicator’s determination, which it contended is vitiated by jurisdictional error beyond a declaration to that effect.

15. The issues are:

1. Did the adjudicator fall into jurisdictional error by finding that Builtcom’s contested submissions were not “duly made”?

2. Did the adjudicator fall into jurisdictional error by failing to consider VSD’s set-off claims or its submissions?

3. If the adjudicator’s decision is affected by jurisdictional error, what relief (if any) should be granted? Does this Court have the power to “remit” the matter to the adjudicator? If there is such power, ought it be exercised in this case?

4. Is the new adjudication application lodged by Builtcom on 10 February 2025 a valid adjudication application for the purposes of the SOP Act?

Builtcom’s contested submissions

16. The material to which an adjudicator must refer is specified in s 22(2) SOP Act, which provides (emphasis added):

In determining an adjudication application, the adjudicator is to consider the following matters only— …

(c) the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim,

(d) the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule …

17. Builtcom claimed the adjudicator erred in considering that Builtcom’s contested submissions were not “duly made”. In particular, Builtcom submitted that the adjudicator’s opinion was vitiated because it was “misinformed” and “based on an error of law”. For these reasons, the adjudicator’s determination was said to be affected by jurisdictional error.

18. The issue is whether the adjudicator erred as alleged, and if so, whether the Court ought consequently quash that part of the adjudicator’s determination.

19. It is well-established that the question of whether a submission is “duly made” is not a matter for objective determination by the Court: Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd [2009] NSWCA 157 at [65] (Giles JA, McColl and Young JJA agreeing), discussing John Holland Pty Ltd v Roads & Traffic Authority of NSW [2007] NSWCA 19 at [57] (Hodgson JA, Beazley JA agreeing). Rather, it is an issue for the adjudicator to determine: Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305 at [23] (Kirk JA, Leeming and Payne JJA agreeing); MartinusRailPty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 (Martinus) at [65], [228], [274] (Payne JA, Gleeson JA and Griffiths AJA agreeing).

20. Builtcom referred to CC (Builders) Aust Pty Ltd v Milestone Civil Pty Ltd [2019] NSWSC 1251 (Milestone) at [29], where Rein J held that (emphasis added):

… whilst decisions on whether a submission is duly made is a matter for the adjudicator not the Court to determine, a decision that a submission was not duly made which is not reasonable or which is without foundation will not be immune from correction by the Court.

21. Builtcom also referred to State Water Corporation v Civil Team Engineering Pty Ltd [2013] NSWSC 1879 (Civil Team) at [65] (Sackar J).

22. Both Civil Team and Milestone suggest an erroneous finding by an adjudicator that a submission is not “duly made” may be susceptible to judicial intervention. However, any such intervention requires the existence of a jurisdictional error. As Leeming JA (White JA agreeing) held in A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2024] NSWCA 7 at [2], “the adjudicator’s determination may be replete with errors of law on its face, but even so it remains immune from judicial review until and unless jurisdictional error be established”.

23. The consequence is that an erroneous finding by an adjudicator that a submission is not “duly made” can lead to judicial intervention if, and only if, that finding was affected by jurisdictional error (if that can ever be the case). That is made clear by Payne JA (Ward ACJ and Basten AJA agreeing) in Ceerose v A-Civil Aus Pty Ltd (2023) 112 NSWLR 225 (Ceerose v A-Civil) at [52], that:

Because the adjudicator can err on questions of law and fact, mistakes as to what may be relevant and what may fall within the obligation for consideration [under eg s 22 SOP Act] will only be reviewable where the error is of the kind which is apt to invalidate the determination.

24. The Court of Appeal also observed that an “error in identifying a submission as having been ’duly made’ is not jurisdictional”: at [31]. Therefore, an adjudicator’s erroneous finding that a submission is “duly made” is unreviewable, given how the SOP Act “evinces a clear legislative intention to exclude the jurisdiction of the Supreme Court to make an order in the nature of certiorari to quash an adjudicator’s determination for non-jurisdictional error of law on the face of the record”: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1 (Probuild) at [35] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

25. It would be an odd result if the converse were not also true. An erroneous finding that submissions were not “duly made” must also be a non-jurisdictional error of law, which, by itself, does not allow for the adjudicator’s determination to be quashed. This is supported by “the purpose of the legislative scheme established by the SOP Act [which is] best served by restricting the scope of intervention by the courts”: Martinus at [57].

26. That conclusion is sufficient to dispose of Builtcom’s claim. However, given the extensive submissions made by Builtcom, below I consider the approach that should be taken as a matter of first principles in assessing whether the adjudicator made a jurisdictional error when finding that Builtcom’s contested submissions were not “duly made”.

Determining jurisdictional error

27. The principles governing jurisdictional error were authoritatively summarised by the High Court in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12 (LPDT) at [2]-[7] (Gageler CJ, Gordon, Edelman, Steward, Gleeson, Jagot and Beech-Jones JJ).

28. Following the approach taken in LPDT at [4], the question whether the adjudicator’s decision was affected by jurisdictional error is to be determined by asking:

1. “whether an error has occurred (that is, whether there has been a breach of an express or implied condition of the statutory conferral of decision-making authority)”; and

2. “whether any such error is jurisdictional (that is, whether the error has resulted in the decision made lacking legal force).”

29. In substance, Builtcom’s argument was that an implied condition of the adjudicator’s power to determine an adjudication application was that he must apply the correct legal test in identifying whether submissions were “duly made” or not. In Builtcom’s contention, the adjudicator failed do that, and his error was said to be jurisdictional.

30. I do not consider Builtcom has succeeded in establishing jurisdictional error for the following reasons.

Breach of the implied condition by applying the alleged “Cardno test”?

31. Assuming in Builtcom’s favour, that there is an implied condition to apply the correct legal test, did the adjudicator fail to do so in determining Builtcom’s submissions were not “duly made”, such that the implied condition was breached?

32. Builtcom contended that the answer to this question is “yes”. In particular, Builtcom submitted that the adjudicator erred by applying what he called the “Cardno test” in finding that Builtcom’s contested submissions were not “duly made”. In reaching his conclusion, the adjudicator did refer to a “practical” application of Einstein J’s decision in John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258 (Cardno). Builtcom said that was an error because there is no Cardno test, or alternatively, if there is a Cardno test, it is not as described by the adjudicator.

33. In my view, it is a distraction to focus on whether there is a “Cardno test” in the abstract. Rather, the focus must be on the substance of the adjudicator’s reasoning (rather than the labels used by the adjudicator) in reaching the conclusion that Builtcom’s contested submissions were not “duly made”. The Court’s role is to examine whether those reasons show that the adjudicator applied the wrong legal test, in which case there would be a breach of the implied condition identified above.

34. The adjudicator’s expressed (but perhaps not total) reasoning was that Builtcom’s contested submissions made in its adjudication application were not “duly made”, because they went beyond the scope and ambit of the payment claim, as extracted above. However, that does not mean that the adjudicator made a jurisdictional error.

35. Builtcom submitted that the adjudicator did err because the adjudicator failed to assess whether consideration of Builtcom’s contested submissions would deny VSD procedural fairness; only then could the impugned submission not be “duly made”.

36. Below I outline what is required for a “duly made” submission, by reference to the SOP Act and authorities.

SOP Act and authorities

37. As is well known, the typical steps that are taken by the parties to invoke the adjudication process under the SOP Act are as follows.

38. First, the applicant serves a payment claim “on the person who, under the construction contract concerned, is or may be liable to make the payment”: s 13(1) SOP Act. In relation to the payment claim, s 13(2) SOP Act provides:

A payment claim—

(a) must identify the construction work (or related goods and services) to which the progress payment relates, and

(b) must indicate the amount of the progress payment that the claimant claims to be due (the “claimed amount”), and

(c) must state that it is made under this Act.

39. Secondly, the respondent “repli[es] to the claim by providing a payment schedule to the claimant”: ss 14(1)-(2) SOP Act.

40. Thirdly, the applicant makes an adjudication application: s 17(1) SOP Act.

41. Finally, the respondent lodges “with the adjudicator a response to the claimant’s adjudication application”: s 20(1) SOP Act. In relation to the adjudication response, s 20(2B) SOP Act prohibits the inclusion of “any reasons for withholding payment unless those reasons have already been included in the payment schedule provided to the claimant”.

42. Then the adjudicator must comply with s 22(2) SOP Act when determining the application, including considering “duly made” submissions.

43. The authorities about submissions being “duly made” share a single concern, namely:

1. If the applicant includes submissions in an adjudication application that go beyond what was raised in the payment claim, the respondent may be denied procedural fairness or natural justice.

2. That is because the respondent cannot properly respond to the applicant’s “new points” in circumstances where s 20(2B) SOP Act prevents her from including in her adjudication response “reasons for withholding payment” that were not included in her payment schedule.

See Cardno; Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty Ltd [2005] NSWSC 1129 at [129] (Brereton J); Parkview Constructions Pty Ltd v Sydney Civil Excavations Pty Ltd [2009] NSWSC 61 at [22] (Brereton J); Leighton v Arogen [2012] NSWSC 1323 at [82] (McDougall J).

44. Read together, the decisions deal with that concern by setting out a general rule: where submissions included in an applicant’s adjudication application go beyond the scope or ambit of his payment claim (as ascertained by the adjudicator: see Martinus at [60], [80]), those submissions are not “duly made” within the meaning of s 22(2)(c) SOP Act.

45. However, that general rule is not without exception. For example, as McDougall J acknowledged in Minister for Commerce v Contrax Plumbing [2004] NSWSC 823 at [50]-[51], [57] and [60]-[61] (affirmed in [2005] NSWCA 142), if a respondent raises an issue in their payment schedule which was not touched on by the applicant in their payment claim, the applicant can deal with this issue in their adjudication application. That is so even though the issue is beyond the ambit or scope of the applicant’s payment claim.

46. The reason why this is acceptable is because the respondent is not denied procedural fairness. Having raised the new issue in her payment schedule, she is not subsequently prevented by s 20(2B) SOP Act from discussing that issue in her adjudication response.

47. The scope and ambit “test” is merely a heuristic that an adjudicator may comfortably apply in most cases to ensure that the respondent is afforded natural justice. Departures from that general rule are tolerated when the departure itself furthers natural justice, which is the very rationale of the rule.

48. There is consequently no occasion for this Court to consider whether any “strict Cardno test” is “plainly wrong”, as Builtcom submitted.

Conclusion

49. Here, the adjudicator expressly applied the general rule when considering whether Builtcom’s contested submissions were “duly made”: they were not “duly made” because they went beyond the scope and ambit of Builtcom’s payment claim.

50. Although the adjudicator did not express in his reasons why any exception to the general rule did not apply, he was not required to do so. Reasons are not “necessarily, or even usually, a comprehensive statement of all aspects of a decision-maker’s thinking”: Martinus at [67].

51. Further, even if the adjudicator breached the implied condition described above by applying the “wrong legal test” when determining whether Builtcom’s contested submissions were “duly made”, this was not a jurisdictional error for the reasons given above.

Subjective jurisdictional fact review approach

52. Builtcom sought to invoke the principles governing subjective jurisdictional fact review to establish that the adjudicator’s opinion about Builtcom’s contested submissions being not “duly made” was vitiated. In particular, Builtcom contended that “this Court has struck down adjudication determinations on the basis that they were affected by an adjudicator’s satisfaction as to whether a submission was duly made, that being a satisfaction which was not formed lawfully”.

53. Builtcom relied on Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229 (Climatech). In that decision, Basten JA observed at [47] that:

It does not follow that the formation of a relevant opinion by an adjudicator with respect to compliance with s 13(2) will in all circumstances be beyond review. The principle stated by Latham CJ in R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1994) 69 CLR 407 at 432, as applied by Gummow J in Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [133], was to the following effect:

If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational or not bona fide.

… an essential element in the formulation of such an opinion is that [it] must be undertaken in good faith, but that is not a sufficient condition of validity.

54. Basten JA’s remarks concerned s 13(2) SOP Act. Basten JA held that s 13(2) sets out “mandatory requirements with respect to the making of payment claims”, of which the adjudicator must be satisfied, in order for the adjudicator’s determination to be validly made: Climatech at [43]-[46]. His Honour’s remarks at [47] relate to how an adjudicator’s state of satisfaction about those facts may be reviewable.

55. Contrary to Builtcom’s submission, for the reasons that follow, I do not consider that Basten JA’s remarks at [47] about s 13(2) SOP Act translate to the present context, where scrutiny is being placed on the adjudicator’s opinion that Builtcom’s contested submissions were not “duly made”.

56. Basten JA’s remarks outline the principles of subjective jurisdictional fact review. A subjective jurisdictional fact is a “state of mind on which the operation or exercise of a provision or power is conditioned”: Ali v Minister for Home Affairs (2020) 278 FCR 627 (Ali) at [42] (Collier, Reeves and Derrington JJ).

57. Basten JA held that ss 13(2)(a)-(c) SOP Act are subjective jurisdictional facts, which must be made out in order to enliven the adjudicator’s power to make a determination. Consequently, his Honour held that the principles governing subjective jurisdictional fact review are readily applicable to scrutinise whether the adjudicator had properly formed the opinion that the facts in ss 13(2)(a)-(c) existed.

58. In contrast, the adjudicator’s opinion that a submission is “duly made”, or is not “duly made”, is not a pre-condition to the exercise of any power conferred by the SOP Act. Formation of that opinion is no more than a step taken by the adjudicator when determining what materials she must consider in order to comply with her statutory duty under s 22(2) SOP Act.

59. I consequently reject Builtcom’s suggestion that the formation of a state of satisfaction that certain submissions are “duly made” or not “duly made” is a subjective jurisdictional fact.

60. Even if this is wrong, for the same reasons as those set out above, Builtcom has not established that the adjudicator made an error of law in reaching a state of satisfaction that Builtcom’s contested submissions were not “duly made”. It follows that Builtcom has failed to demonstrate that the adjudicator’s determination was affected by jurisdictional error.

Failure to consider Builtcom’s contested submissions?

61. Builtcom also relied on Miller v LMG Building Pty Ltd [2023] NSWSC 995, asserting it provided an example of where “the determination was struck down because the adjudicator misconstrued the Act in forming a view that a submission was not ‘duly made’”.

62. Ball J (as his Honour then was) considered at [20]-[26] that (emphasis added):

[I]t was a jurisdictional error for the Adjudicator to refuse to consider any material produced after the date of the payment schedule …

The Adjudicator appears to have taken the view that reliance on material created after the payment schedule necessarily amounts to reliance on new reasons. That is not correct. …

An adjudicator who refuses to consider submissions (including relevant documentation) that have been duly made fails to perform the task required of the adjudicator under the Act and therefore makes a jurisdictional error.

63. As evident from this quote, Miller was a case where the Court found that the adjudicator did not enquire into whether submissions were duly made because of a misconception of their relevance based on the timing of their delivery. As a result, the submissions in question were not considered. Ball J found that the adjudicator made a jurisdictional error as he had not considered whether the submissions were duly made or not.

64. Here, Builtcom did not plead that the adjudicator fell into jurisdictional error by failing to consider Builtcom’s contested submissions. Its pleaded case was that the adjudicator did not “lawfully determine whether submissions were ‘duly made’” within the meaning of s 22(2)(c) SOP Act. However, as noted above, the adjudicator did engage in a consideration of whether the submissions were “duly made” by reference to the scope and ambit of the payment claim. Miller can therefore be distinguished.

65. Below I explain why I do not accept that the adjudicator failed to consider Builtcom’s contested submissions or fell into jurisdictional error.

Breach of s 22(2) SOP Act?

66. There are few situations where a party will demonstrate a breach of s 22(2) SOP Act by virtue of some failure by the adjudicator to consider a matter required by that section, such a “duly made” submission. As Payne JA (Ward ACJ and Basten AJA agreeing) held in Ceerose v A-Civil at [69]:

[T]here are likely to be few cases in which an applicant for judicial review can establish a breach of the duty to consider the matters set out in s 22(2). That is not to say that there may not be circumstances in which the inference of omission to consider is demonstrated. Thus, failure to refer to a submission on a centrally important matter, clearly articulated and based on uncontested facts, may demonstrate a failure to consider at all. Such is likely to be a rare case.

67. The Court of Appeal also observed that “the failure to identify a particular claim or response in reasons will not of itself demonstrate that the adjudicator failed to consider it”: at [62]; see also [63]-[68].

68. After judgment in the current proceedings was reserved, the Court of Appeal handed down judgment in Martinus. That decision is significant in clarifying when there will be a failure to consider a matter identified in s 22 SOP Act. The key propositions that emerge from the judgment of Payne JA (Gleeson JA and Griffiths AJA agreeing) are as follows:

1. Judicial review and not merits review: When conducting judicial review of an adjudication determination made under the SOP Act, this Court must be cautious not to “slip impermissibly into merits review”. When dealing with “a complaint of a failure by an adjudicator to consider the matters to which s 22(2) refers”, it is crucial that the Court “does not impermissibly impose [its] opinion about the correct outcome as the determinant of the adjudicator’s jurisdiction”: at [60].

2. Absence of reference to submissions in reasons does not itself establish a failure to consider: Because reasons are “not necessarily, or even usually, a comprehensive state of all aspects of a decision-maker’s thinking”, the lack of any “reference to a particular submission or contention” does not necessarily mean “that the material was not considered”. For example, it may be “equally likely that an adjudicator who does not refer in reasons to a particular matter mistook the facts or misunderstood the contractual provision or the legal principle to be applied”. In that situation, “a complaint of failure to consider will not be proven” and jurisdictional error will not be established. The “duty to consider a submission is different from a duty to deal with it correctly, whether in law or in fact”: at [67], [69].

3. Emphasis and weight given to submissions a matter for the adjudicator: An adjudicator is “entitled to spend more time on some items within a claim than on others”, particularly in light of how the SOP Act imposes tight turnaround times on the adjudicator to determine an adjudication application: at [68]. “An attempt by a Court to assign relative ‘weight’ to submissions made to an adjudicator runs the risk of applying an intensity of review of decisions made by adjudicators under the SOP Act inconsistent with the decisions of this Court”: at [93].

69. I consider that the adjudicator’s treatment of Builtcom’s contested submissions was not one of those “few cases” or “rare case[s]” where there was a breach of s 22(2): Ceerose v A-Civil at [69]. As VSD submitted, it is clear from the adjudicator’s reasons that he considered the contested submissions when he assessed whether they went “outside the scope and information provided by [Builtcom] in its payment claim”. He concluded that they did and so decided to place no weight on them. That was a course available to the adjudicator to take.

70. There was consequently no failure by the adjudicator to consider Builtcom’s contested submissions and therefore, no breach of s 22(2) SOP Act.

Jurisdictional error?

71. If this conclusion is wrong, there is a question as to whether the adjudicator’s breach of s 22(2) SOP Act amounted to jurisdictional error.

72. In Ceerose v A-Civil, the Court of Appeal observed at [50] that (emphasis added):

Failure to determine the three matters set out in s 22(1) [SOP Act], if required to do so to resolve a particular claim, would likely constitute jurisdictional error. Compliance with s 22(2) is less readily so characterised.

73. That observation was repeated by the Court of Appeal in substantially identical terms in Martinus at [72]. The Court went on to suggest that a failure to comply with s 22(2) is properly viewed as “failure to comply with a mandatory statutory obligation”: at [72].

74. Not every breach of a statutory obligation which conditions a power will render an exercise of that power invalid. As the High Court held in LPDT at [4], legislation “which contains an express or implied condition of a conferral of decision-making authority is not always to be interpreted as denying legal force and effect to every decision that might be made in breach of that condition”.

75. For the following reasons, I do not consider that if the adjudicator failed to consider Builtcom’s contested submissions, that would invalidate the adjudicator’s determination.

76. First, the “clear policy of the SOP Act is to ‘pay now, fight later’”: Martinus at [8]. That purpose is best served by reducing the scope for judicial intervention: Martinus at [57].

77. Secondly, even if the adjudicator’s failure to consider can be said to have resulted “in a progress payment that is inadequate or excessive, the dispute may be resolved through civil proceedings under the construction contract”. In that way, the consequences of the adjudicator’s erroneous determination are not “irrevocably entrench[ed]”: Probuild at [51].

78. Thirdly, although Ceerose v A-Civil does not foreclose the possibility that a breach of s 22(2) SOP Act occasioned by a failure to consider a submission might amount to jurisdictional error, the Court of Appeal suggested that a court would be slow to reach that conclusion. It would be surprising if every single failure to consider a “duly made” submission would render the adjudicator’s determination a nullity, especially given the pressures placed on an adjudicator to carry out what is a “time sensitive and document heavy” adjudication process: Martinus at [57].

79. Here, even if the adjudicator did fail to consider Builtcom’s contested submissions, it is clear from the reasons that he must have had some regard to them to conclude that they went “outside the scope and information provided by [Builtcom] in its payment claim”. In these circumstances, it is difficult to see how the SOP Act could be interpreted as denying legal force to the adjudicator’s determination here.

80. Taken together, these considerations suggest that the adjudicator’s alleged breach of s 22(2) SOP Act would not amount to jurisdictional error.

81. It is consequently unnecessary to consider whether any breach of s 22(2) SOP Act by the adjudicator was material: see eg LPDT at [6].

Conclusion

82. Builtcom has not succeeded in establishing jurisdictional error.

83. If that conclusion was wrong, it may well have been appropriate to set aside that part affected by jurisdictional error pursuant to s 32A SOP Act.

84. However, I would not have “remitted” any affected part to the adjudicator, because the adjudication application was not before the Court for de novo determination. Instead, the question would have been whether this Court, exercising its constitutionally entrenched supervisory role, should make orders in the nature of mandamus compelling the adjudicator to determine according to law those aspects of his adjudication determination which were affected by jurisdictional error: see Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 (Kirk) at [98]-[100] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); see also Trysams Pty Ltd v Club Constructions (NSW) Pty Ltd [2008] NSWSC 399 at [89] (McDougall J); Cardinal Project Services Pty Ltd v Hanave Pty Ltd (2011) 81 NSWLR 716 at [11] (Basten JA); cf Procon Developments (Australia) Pty Ltd v Hi-Cal Bricklaying [2025] QSC 67 at [42]-[45] (Bowskill CJ); Hanson Construction Materials Pty Ltd v Decmil Australia Pty Ltd [2024] VSC 361 at [58]-[74] (Stynes J) .

85. It is likely that I would have refused to make such a discretionary order because a “more convenient and satisfactory remedy exists”: R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389 at 400 (Latham CJ, Rich, Dixon, McTiernan and Webb JJ). That remedy is the final relief that the parties can obtain after “the common law rights of both parties [are] determined in the normal manner”: Probuild at [44], [53].

VSD’s set-off claims

86. As noted above, VSD included in its payment schedule and adjudication response various set offs for “a number of overpayments previously made to Builtcom, payments made to Builtcom that were not paid downstream to subcontractors, and defects in the work that was performed by Builtcom”. These set offs were addressed in 72 paragraphs of the adjudication response, 225 paragraphs of a supporting statutory declaration, and a tabled annexure. The tabled annexure only provided further detail concerning defect set offs, not the overpayments.

Adjudicator’s reasons

87. The adjudicator listed all the set off claims in a table and referred to Builtcom’s “detailed and comprehensive analysis of scheduled setoffs”, together with a summary of VSD’s reasons in its payment schedule. The adjudicator detailed the various arguments of the parties concerning the proper construction of the contract in relation to VSD’s entitlement to set off money otherwise due to Builtcom.

88. Only in relation to set off claims for defects did the adjudicator provide reasons concerning them being “not particularized” such that they “can only be considered as global claims, or claims for damage”.

89. The adjudicator was alive to the operation of the contract relied upon by VSD allowing VSD to “set off, deduct or withhold from moneys otherwise due … any genuine bona fide claim to money which [VSD] has ... whether for damages or otherwise … whether under or in connection with this Contract or relating to the work, whether for damages (including liquidated damages) or otherwise”.

90. The adjudicator recorded Builtcom’s argument about the set off claims:

[Builtcom] refers to Enermech v Acciona where the Barsten AJA [sic] states at para 64 that, a progress payment cannot claim amounts which might be recoverable under the general law by way of damages, restitution, or by way of an account.

91. The adjudicator stated, with reference to the defect set offs, that VSD’s submissions were not accepted.

92. The adjudicator then concluded:

Accordingly, I find the set off claims are best described as general damages claims for which I lack jurisdiction and consequently I am obliged [to] value them at nil for the purpose of this adjudication determination.

93. VSD complained that the adjudicator:

1. Failed to consider and value the defect set off claims contrary to s 22(2) SOP Act on the erroneous basis that the adjudication response submissions were not “duly made” as they provided detail not given in VSD’s payment schedule; and

2. Failed to consider the overpayment set off claims at all, assuming he had no jurisdiction.

94. I reject VSD’s complaints for the following reasons.

Failure to consider submissions “duly made” about defect set off claims

95. Above I set out the circumstances (as explained by the Court of Appeal in Ceerose v A-Civil and Martinus) concerning when there will be a failure to consider a matter in s 22(2) SOP Act, such that there is a breach of the mandatory statutory obligation imposed by that section.

95. For similar reasons to those identified in relation to Builtcom’s argument, I am not satisfied that VSD has demonstrated that this is a “rare case” where there was a failure by the adjudicator to consider a “duly made” submission in breach of s 22(2). This is particularly so because there were not uncontested facts: see Ceerosev A-Civil at [69]. VSD conceded in submissions:

… an adjudicator may, legitimately, have not specifically referred to a submission or a claim because the submission or claim was lacking in substance, went to a non-issue, was trivial (having regard to the issues that were required to be resolved) or was underpinned by a factual assertion that had been rejected.

97. Neither did VSD submit that the adjudicator was not aware of the defect set offs.

98. However, VSD submitted that the adjudicator erred in concluding that he was prevented from considering VSD’s submissions, such as site reports and surveys, that supported the defect set offs, on the basis that those submissions were not “duly made”, because they had not been provided in VSD’s schedule.

99. I reject that submission.

100. The adjudicator did not state he rejected VSD’s claim only because of the conclusion about a failure to comply with s 20(2B). Instead, other reasons were given, including because of the adjudicator’s construction of the contract in relation to the timing of an entitlement to claims for defects. Therefore, I reject VSD’s submission that the adjudicator “proceeded on an a priori (but erroneous) assumption that the Defects Set-Off Supporting Material could not considered at all, and as a result – the inference must be – [he] failed to consider them at all.” Instead, it appears that the adjudicator considered the scope and ambit of the set off claims in the context of the other material.

101. Further, although VSD may have an argument later that the adjudicator misunderstood the nature of VSD’s contractual entitlement to set off money as “general damages claims”, that cannot be challenged here. As Basten AJA (Meagher JA and Griffiths AJA agreeing) observed in EnerMech Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (2024) 115 NSWLR 56 at [79]:

The effect of s 25(4)(a)(ii) is to confirm that the adjudicator’s understanding of the construction contract, even if legally erroneous, cannot be challenged on a claim to enforce an adjudication certificate; nor, without more, as held in Probuild Constructions, can it be so challenged on judicial review.

Failure to consider overpayment set off claims?

102. I do not accept it can be concluded that the adjudicator failed to consider VSD’s overpayment set off claims. The adjudicator recorded the relevant provisions of the contract, which were said by VSD to support those particular claims.

103. Merely because the adjudicator wrote more about the defect set off claims does not mean he ignored the overpayment claims: see Martinus at [93]. Further, those claims were based on the construction of the contract, in relation to which the adjudicator could err without it amounting to a jurisdictional error.

104. The conclusion reached by the adjudicator that “the set off claims are best described as general damages claims” appears to be intended to apply not only to the defect set off claims, but also the overpayment claims, that were referable to the contractual provision quoted by the adjudicator.

105. Therefore, it has not been demonstrated that the adjudicator failed to consider VSD’s claims.

Validity of new adjudication application

106. On 10 February 2025, Builtcom lodged a new adjudication application with the Australian Building and Construction Dispute Resolution Service. Builtcom purported to withdraw its previous adjudication application pursuant to s 26 SOP Act and sought to make a new application under s 17 SOP Act “on the assumption that the [adjudicator’s determination] is void”.

107. VSD sought the following orders in its further amended summons in the VSD proceedings:

12A. A declaration that the First Defendant’s adjudication application lodged with the Third Defendant on 10 February 2025 is not a valid adjudication application under the [SOP Act].

12B. A declaration that any adjudication determination given in respect of the First Defendant’s adjudication application lodged with the Third Defendant on 10 February 2025 is void.

12C. An order permanently restraining the First Defendant from enforcing any determination given in respect of the First Defendant’s adjudication application lodged with the Third Defendant on 10 February 2025.

108. Following Builtcom’s indication that it no longer sought the quashing of the entirety of the adjudicator’s determination, the Court sought further submissions on the issue of relief. VSD maintained its claim for the relief set out in proposed orders 12A, 12B and 12C.

109. In circumstances where I have found that the adjudicator’s determination was not affected by jurisdictional error, it is unnecessary to determine the validity of the new adjudication application and to make any declaration as to its effect. That is because the SOP Act “when read as a whole manifests an intention to preclude reagitation of the same issues” which have been “determined by an earlier adjudication”. In that context, the principles “akin to res adjudicata” are applicable: Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190 at [67]-[68] (Macfarlan JA, Handley AJA agreeing); see also at [2] (Allsop P).

110. Further, since there is no evidence suggesting that the adjudicator intends to determine the new adjudication application, I do not consider it appropriate to declare void any hypothetical determination that might be made. Nor do I consider it appropriate to make an order restraining Builtcom from enforcing any such hypothetical determination.

Orders

111. The Court make the following orders:

1. Dismiss the summons in proceeding 2025/00046823.

2. Dismiss the further amended summons in proceeding 2025/00048213.

3. Parties to bear their own costs in proceedings 2025/00046823 and 2025/00048213.

4. Grant liberty to the parties to apply for an alternative costs order within seven days of today’s date, setting out the application and any evidence and submissions of no more than 3 pages upon which they rely.

5. Should such an application be made for an alternative costs order, the responding party is to provide evidence and submissions of no more than 3 pages opposing any alternative costs order within seven days of receiving the first application.

6. The Court will determine any such alternative costs application on the papers, if appropriate.

Amendments

07 May 2025 - Deleted "that" in [31]

Decision last updated: 07 May 2025