Category Archives: Adjudication

A New Security Lock for South Australia

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Schubert - Stephan Knoll

Stephan Knoll MP

Stephan Knoll’s Building and Construction Industry Security of Payment (Authorised Nominating Authorities) Amendment Bill got both its First and Second Readings in South Australian House of Assembly a few days ago. If passed, it will provide for South Australia to follow Queensland’s lead in abolishing the for-profit ANA system, instead providing that all appointments of adjudicators by made by the Commissioner for Small Business, as recommended last year by the Moss Review.

It is welcome that Stephan Knoll has paid attention to the Society of Construction Law Australia’s Report on the topic (in which I had a considerable had, as chairman of the Australian Legislative Reform Subcommittee). My colleagues at SoCLA (and I) put a lot of work into that Report, and it is gratifying to see politicians taking notice.

The present legislation could certainly do with some improvement; it is to be hoped that Continue reading →

Plenty of Room for Improvement in Security of Payment in New South Wales

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socla logoSoCLA has submitted its response to the NSW discussion paper on last year’s admendments.

Those amendments have not gone done well in the courts:

  • McDougall J in Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602 said that the  amendment to s 13(2)(c) – removing the requirement for payment claims to identify themselves as such – was “unwise”.
  • In BRB Modular Pty Ltd v AWX Constructions Pty Ltd & Ors [2015] QSC 218 the Supreme Court of Queensland had to consider a contractual provision to the same effect as the new NSW statutory requirement for supporting statements. It found that, on balance, such a requirement ran so counter to the objects of the legislation (those objects being the same in Queensland and NSW) as to fall foul of the anti-avoidance provisions.
  • These ill-considered experiments also fail to take into account the observation of Justice Peter Vickery that[2]:

We now have the luxury of more than a decade of experience derived from the “hard knocks” of litigation and the practice of adjudication. This is an excellent foundation to build upon. Most of the problems, both practical and legal, one way or another have been exposed. It is surely now time to capture the best from all jurisdictions and consolidate them into a coherent national framework.

SoCLA’s response (the drafting of which I led)  likewise urges that Continue reading →

Irish Ayes

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harpSome of you may not be familiar with the Iris Oifigiúil. And why should you be?

It is the Irish State Gazette, and has just published a list of the newly appointed Construction Contracts Adjudication Panel, good for the next 5 years. It suggests that Ireland might, without undue haste[1], be moving towards commencement of its Construction Contracts Act 2013. Interestingly, about 1/3 of the panel is based outside the Republic of Ireland – mostly England but a couple from Northern Ireland and one from Scotland[2].

Rather smart, I would say. It is tempting for small jurisdictions to be parochial, but experience from all sorts of disciples – music, politics, cuisine, medicine, sex, horticulture, literature, science and pretty much everything else one can think of – benefits from Continue reading →

Pay now, Argue Later

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buy now pay laterI coined the expression “Pay now, argue later” to describe the adjudication process in early 1996 during discussions with Lord Howie of Troon in the tea room at the House of Lords. Lord Howie was a Scottish engineer, picking up the recommendation in Sir Michael Latham’s Report to introduce an adjudication scheme into construction contracts, and very sensibly sought the input of TeCSA as to how this might best be done. I was advising him to stay clear of his initial idea of making the adjudicator’s decision final and binding, on the basis that if it was final and binding, it would be impossible to prevent the courts from placing all sorts of obstacles in the way of enforcement.  It was a play on the old hire purchase slogan: “Buy now, pay later”.  I said that if an adjudication loser was obliged to pay up, without prejudice to its right to then fight it out in the courts or arbitration to try to get it back, that would achieve the objective we were looking for, but minimising the risk of court interference. It would be rare, I predicted, that this right to “argue later” would be used very much in practice.  Happily, Continue reading →

Preparing and Answering Payment Claims

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LSSA2015I will be giving a talk in Adelaide for the Law Society of South Australia on Wednesday – 4 November 2015 – on the topic of Preparing and Answering Payment Claims under the Building and Construction Industry Security of Payment Act 2009 (SA).

This is not intended to be cutting-edge stuff, but rather a general introduction for general practitioners who may not be familiar with this tricky legislation. It has recently become all the more difficult for newcomers to Continue reading →

Now We are Six

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nowwearesixThe decision of the Supreme Court of the United Kingdom recently in Aspect Contracts (Asbestos) v Higgins Construction [2015] UKSC 38 might well provide a good reason for adjudication losers who paid up on an adjudication determination in late 2009, or where it is coming up for 6 years since a payment was made pursuant to an adjudication determination, to think about dusting off their files.

The way works is like this. All around the world, adjudication is intended as a “pay now, argue later” scheme. If the adjudicator finds for a claimant, then the respondent has to pay up, but without prejudice to the respondent’s right to reclaim that amount in subsequent litigation or arbitration. But what is the basis of that right to reclaim?

During the currency of most formal building contracts, there is a contractual answer to be found in the final account provisions. After the contract work has been completed, these final account provisions typically require a calculation to be made of the amount eventually due under the contract. All the amounts that have been paid up to that point to take into account, and the balance is paid – or repaid – as the case may be. If the contractor has been paid more than he is entitled to, then the express terms of the contract provide a route whereby the principal gets the excess back.

In the absence of a final account provision, the right of the principal to recover any overpayment is much more problematic. There are certain circumstances where the principal might have a right of recovery in restitution, i.e. for money had and received, particularly where the money has been paid pursuant to a relevant mistake. It might be possible, for example, for the principal to demonstrate a relevant mistake if the contractor has defrauded her by misrepresenting the work that he has done. Somewhat more rarely, the principal might be able to demonstrate that she has paid as a result of duress; again, that duress would enliven a right of recovery in restitution. Yet again, in the even more improbable case that the contract or has done no work at all, the right of recovery would be enlivened by a total failure of consideration. These categories are conveniently summarised at Continue reading →

The Apparent Growth of Bias

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sliwinskiIt has always been the case that actual or apparent bias by an adjudicator will render the adjudicator’s decision liable to be quashed on the grounds of natural justice. In the early days of adjudication, cases in which bias was as established were rather rare, but it seems that the their numbers are growing, as illustrated by the recent English case of Paice & Anor v MJ Harding (t/a MJ Harding Contractors) [2015] EWHC 661 (TCC). The case is interesting because it exemplifies how apparent bias can arise from the actions, not of the adjudicator himself, but of his support staff.

There was a complex history to this particular adjudication, which was the 4th adjudication between the parties arising out of a contract for the construction of 2 houses. The adjudicator was Robert Sliwinski, an experienced chartered surveyor. He had been the adjudicator in the 1st and 2nd adjudications, in both of which he had ordered the claimant owners to pay money to the defendant builder.

The apparent bias arose out of a couple of telephone conversations that took place between the claimant owners and Mr Sliwinski’s wife, who was also his office manager. Quite how Continue reading →

Winning Slow

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Sometimes the laslothw acts quickly, and sometimes excruciatingly slowly. I was asked by my chambers in London, Keating Chambers, the other day to approve a summary of the decision of the Supreme Court in Northern Territory in Department of Construction and Infrastructure v Urban and Rural Contracting Pty Ltd [2012] NTSC 22. I was counsel for the contractor who had applied for and got an adjudicator’s determination in its favour, and I won on the day, and in the long run. In the meantime, the reported decision would suggest that I had lost.

Here is how it all happened. Continue reading →

SA to join Queensland?

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Australia SA and QIt looks like South Australia may shortly be joining Queensland in the abolition of the ANA system for appointing adjudicators.

A review was recently commissioned from Alan Moss, who is a former District and Youth Court judge, and this has now been published.The main recommendation of the Review is that the Minister should remove the authorisation of all of the existing ANAs, and instead appoint the relevant government officer, who is the Commissioner for Small Business, as the sole ANA. In this way, it is proposed to deal with the widely perceived institutional bias in the ANA system without the need for amending legislation.

This review is very welcome, the ANAs in South Australia having Continue reading →