Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd

Perform (NSW) Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning an adjudication under the *Building and Construction Industry Security of Payment Act 1999* (NSW). The dispute arose from a payment claim made by Perform against Mev-Aus Pty Ltd, which Mev-Aus responded to with a payment schedule indicating a nil amount payable. Perform sought to have the adjudication decision, which found in favour of Mev-Aus, set aside.

The central legal issues before the Court of Appeal were whether the adjudicator had failed to comply with the basic and essential requirements of a valid adjudication. Specifically, the court considered whether Mev-Aus's payment schedule sufficiently indicated its reasons for valuing Perform's claim at nil, and whether the adjudicator had erred in his approach to backcharge claims and in his consideration of submissions made by the parties. The court also examined whether the adjudicator had failed to exercise his powers bona fide and whether there had been a denial of natural justice.

The Court of Appeal reasoned that a payment schedule could indicate reasons for a nil valuation by referring to a previous payment schedule. It held that what is indicated in a payment schedule is a matter for the adjudicator to determine, and that the adjudicator's view on this point did not render the adjudication void. The court found that the adjudicator had properly considered the submissions regarding backcharge claims, including Perform's argument that such claims could not be relied upon as a set-off, and that it was open to the adjudicator to pay regard to these submissions. Consequently, the court concluded that there was no denial of natural justice and no substance to the complaint that the adjudicator had failed bona fide to exercise his powers.

The Court of Appeal allowed the appeal in part, setting aside the primary judge's order that Perform pay Mev-Aus's costs of the proceedings, including the costs of a cross-claim. In lieu thereof, the court ordered that Perform pay Mev-Aus's costs of the summons, with no order as to the costs of the cross-claim, meaning each party would bear its own costs for that aspect. The appeal was otherwise dismissed, with Perform ordered to pay 95 per cent of Mev-Aus's costs and the costs of the second respondent.