5950

Q&As and counting

July 2018

Security of payments - issue proceedings after adjudication

July 2018
Other
Victoria

Asked

If a respondent provides a payment schedule under the Security of Payments Act which includes an offset for liquidated damages payable by the builder for failure to complete the work on time, and the adjudicator determines or makes an assessment that the respondent is not entitled to the liquidated damages, is the respondent able to issue proceedings to recover the liquidated damages at VCAT or a Court or is the adjudicators decision final?

Answered

Thank you for the question.

See the recent High Court decision in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd[2018] HCA 4.

In determining the construction of the NSW Act, the High Court looked at several issues, one of which was that under the (NSW) Act, the ability to enforce rights and obligations under the original construction contract is not barred by the adjudication determination. The absence of appeal rights in respect of the adjudication determination (an adjudication determination can only be overturned if it can be established that the adjudicator did not have the jurisdiction to make the determination in the first place) doesn’t prevent a claim under the construction contract. In other words, each party's contractual rights are preserved and can be enforced at a later time.

Regards

Mentor

Other
Victoria