The NSW Supreme Court in Castle Constructions Pty Ltd v Napoli Excavations and Civil Pty Ltd recently considered the builder’s application (Castle) to have an adjudication determination under the NSW SOP Act in favour of the civil subcontractor (Napoli) for approximately $48K declared void due to failure by the Adjudicator to consider submissions duly made by the builder that the subject payment claim dated 30 September 2022 (30 September claim) was invalid.
It was not in dispute between the parties that the subcontract was terminated in May 2022. The builder in its Adjudication Response submitted that by operation of the s13(1C) of the NSW SOP Act only one payment claim under the Act can be validly submitted after termination. The 30 September claim was made in respect of work performed in May 2022, which work had been validly claimed by the subcontractor post-termination on 24 June 2022 and was improperly re-agitated in subsequent payment claims, including the 30 September claim.
The Adjudicator in his determination made no reference to the May 2022 termination of the subcontract or the re-agitation of the claim by the subcontractor after 24 June 2022, and the Court inferred the Adjudicator entirely overlooked the builder’s submission about one valid claim after termination. The Court found that if the builder’s submission concerning the proper operation of s13(1C) had been considered by the Adjudicator “he may well have come to a different conclusion” finding a material failure by the Adjudicator to properly exercise his statutory duty under the Act, and as a result the Adjudicator’s determination was declared void.
Matters going to the validity of payment claims and jurisdiction of the Adjudicator to make a decision about a payment claim must be expressly stated and appear front and centre in payment schedules and adjudication responses to minimise the prospect that these important submissions are overlooked.
