Section 22(2)(c) of the Building and Construction Industry Security of Payments Act 2009 (SA) permits an adjudicator to consider, among other things, the payment claim and all submissions that have been “duly made” by the claimant. What is the position if the adjudicator considers other material that has been provided to him by the claimant?
The issue arose last week in the Supreme Court of Queensland in J Hutchinson v Cada Formwork [2014] QSC 63. The equivalent provision in Queensland is section 26(2) of the Building and Construction Industry Payments Act 2004 (Qld), where the formula is submissions “properly made”. On the facts, the material in question was an email with attachments, and the court was satisfied that the email was provided to the adjudicator but not seen by those responsible for the adjudication on behalf of the respondent. It could not be said that the email was irrelevant to the determination. Accordingly, Peter Lyons J found that there was a breach of natural justice, such that the adjudication determination was of no effect.

[49] It seems to me that, for the purposes of s 26(2) of the BCIP Act, a properly made submission is one made in a manner provided for in that Act. The only provision relevant for present purposes is found in s 21(3)(f), to the effect that submissions relevant to the adjudication application may be contained in the application; read with s 21(3)(b), which provides that the adjudication application is to be made to an authorised nominating authority. It is apparent from s 26(2) that a submission may include relevant documentation. On a literal reading of these provisions, however, the 10 June email and accompanying site instructions did not constitute, or form part of, a “properly made” submission.
[63] Where an adjudicator considers something which is not a properly made submission of a claimant, and to which a respondent has not had an opportunity to respond, then it seems to me that the scope and object of the statutory provisions will generally have the consequence that the determination is invalid. However, this may depend upon the significance of the material thus considered. It seems to me that the approach taken under the rules of natural justice to the consideration of evidence about which one party has not had an opportunity to comment would provide an appropriate guide. Here, the site instruction and the email which described its significance, were obviously matters of some importance. Hutchinson would have provided material in response. Accordingly, I would hold that the breach of s 26(2) invalidates the third respondent’s adjudication determination.

Is there any difference between the formulae “properly made” (Queensland) and “duly made” (NSW and SA)? There is nothing in the judgment to suggest so.

This does not mean, of course, that adjudicator could not or should consider additional material – rather than that the adjudicator must, in these circumstances, use the express power under section 21(4)(a) to request further submissions, and to give the other party an opportunity to comment on those submissions. Some ANAs apparently train adjudicators not to use this power, but such training is plainly misguided. The case provides a powerful indicator that adjudicator should be prepared to use the further submissions power where appropriate.

The need to use this power to request further submissions is particularly likely to arise where a claimant includes material in his adjudication application submissions that was not in his payment claim, such that the respondent did not deal with it in the payment schedule. The decision of Blue J in Built Environs v Tali [2003] SASC 84 last year provides an example of a case where failure by the adjudicator to call for further submissions was fatal to the determination.