LKB Group Pty Ltd v Niclin Constructions Pty Ltd

LKB Group Pty Ltd, the principal, filed an application for judicial review against Niclin Constructions Pty Ltd, the contractor, and others, challenging the amended adjudicated amount of $569,867.86 determined by an adjudicator in a construction dispute. The Federal Court of Australia was tasked with determining the validity of the amended adjudicated amount and the apportionment of adjudicator's fees.

The primary legal issues addressed by the court involved whether the amended adjudicated amount was affected by jurisdictional error and, if so, the extent of such error. Additionally, the court considered whether the principal should bear the full cost of the adjudicator's fees and expenses or if the contractor should contribute to these costs if the amended adjudicated amount was found to be flawed.

The court found that the amended adjudicated amount included sums for variations that had already been approved and paid by the principal, which were not part of the initial payment claim. Furthermore, the adjudicator had indicated in his reasons that one variation amount would be deleted. The court also noted that the adjudicator included an amount for the repayment of liquidated damages, which the principal had already set off against the contractor. The court held that there was no contractual basis for including the repayment of liquidated damages in the amended adjudicated amount, thereby constituting a jurisdictional error. Consequently, the amended adjudicated amount was declared invalid to the extent of $164,932.04, but it remained binding on the parties otherwise. Regarding the adjudicator's fees and expenses, the court ruled that if the amended adjudicated amount was found to be flawed, the contractor should be ordered to pay 50 per cent of the fees and expenses.

The court's final orders included declaring that the amended adjudicator's decision was affected by jurisdictional error to the extent specified, that the amended adjudicated amount was invalid to the extent of $164,932.04, and directing the parties to submit written submissions on costs within seven days.