Diona Pty Ltd v Downer EDI Works Pty Ltd

Diona Pty Ltd initiated proceedings against Downer EDI Works Pty Ltd, challenging an adjudication determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW). The adjudication determined a payment dispute between the parties. The primary issue before the court was whether the determination was void, whether it represented a jurisdictional error, and whether the Adjudicator failed to consider the contract in making the decision.

The court examined whether the Adjudicator had adhered to the requirements of the Act, particularly whether the Adjudicator's decision-making process was procedurally fair and whether the Adjudicator had considered all relevant contract terms. The court held that the Adjudicator did not properly consider the contract, as evidenced by the Adjudicator’s failure to address specific contractual clauses that were central to the dispute. This omission was found to be a failure to properly apply the law, resulting in a jurisdictional error. Consequently, the court found that the adjudication determination was void.

The court quashed the adjudication determination and remitted the matter back to the Adjudicator for reconsideration. The Adjudicator was directed to consider all relevant contractual terms and apply the appropriate legal principles in making a new determination.