The NSW Court of Appeal recently considered an expert determination clause in a GC21 Contract between a builder and the NSW Department of Education, to determine whether an expert determination made under the Contract was final and binding. At issue was the proper interpretation of the subject clause, and an exclusion clause which provided that the expert determination was not final and binding where the determination amount exceeded $500K.
The builder commenced Court proceedings concerning matters the subject of the determination on the basis the threshold value was exceeded and the determination not final and binding. The Department then applied for summary dismissal of that proceeding on the basis the threshold amount was not exceeded after set-off of amounts paid to the builder under the SOP Act. The Department succeeded at first instance. However on appeal, the NSW Court of Appeal applied a literal reading of the clause and determined payments to the builder under SOP Act are properly disregarded from calculation of the determination amount and held the threshold amount was exceeded and the determination was not final and binding, and matters the subject of the determination could be litigated. The alternative interpretation given to the clause by the Court below was held to be improper and uncommercial.
