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  • Jacob Shillito

Can an adjudicator consider material produced after the date of a payment schedule?

This issue came before Ball J in Miller v LMG Building Pty Ltd [2023] NSWSC 995, where the plaintiff, Ms Suzanne Miller (Ms Miller) sought to have an adjudication determination made by the second defendant (the Adjudicator) quashed on the basis that the Adjudicator had fallen into jurisdictional error by failing to consider material produced after the date of a payment schedule.


Facts

The first defendant, LMG Building Pty Ltd (LMG), made a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) which was served on Ms Miller. Ms Miller then served a payment schedule stating that the amount she proposed to pay in respect of the payment claim was “$NIL”. The payment schedule was accompanied by two expert reports that identified the relevant defects and set out the work necessary to complete the contracted-for work.


LMG then lodged an adjudication application. Ms Miller provided her adjudication response which included a supplementary expert report setting out the costs of rectifying each defect that was identified in one of the initial expert reports that accompanied the payment schedule. The adjudication response also included a statutory declaration from Mr Grice, who had acted as superintendent in relation to the contract. The statutory declaration gave an explanation for the overpayment that Ms Miller had identified in her payment schedule. In reaching his determination, the Adjudicator refused to consider the supplementary report or Mr Grice’s statutory declaration (the material) as the material had been produced after the date of the payment schedule.


Decision

Bell J ultimately decided that the Adjudicator had fallen into jurisdictional error by failing to consider the material. Section 22 of the Act requires an adjudicator to consider both the payment schedule and all submissions (including relevant documentation) that have been “duly made” by the respondent in support of the payment schedule. Submissions will not be considered duly made if they are made outside the time period specified by the Act or if they raise new reasons for refusing payment that were not included in the payment schedule.


His Honour found that there is nothing in the Act that prevents a respondent from including, as part of their adjudication response, documents prepared after the date of the payment schedule (including expert reports), provided that such documentation does not raise a reason for refusing payment that was not included in the payment schedule. The material produced by Ms Miller in her adjudication response did not introduce any new reasons for refusing the claim, but simply gave additional information in relation to the reasons already given by Ms Miller in her payment schedule.


To sum up, as long as the submissions made by the respondent are “duly made”, an adjudicator must consider them, even if the material is produced after the date of a payment schedule. An adjudicator who refuses to consider submissions that have been duly made fails to perform their required task under the Act and therefore makes a jurisdictional error.

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