Category Archives: Adjudication

An irony

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shamrockThere is a strange irony that it seems to be much easier to pass bad law than good law, at any rate in the area of construction adjudication.

In New South Wales, the recent amendments – which look like a bad train wreck, passed in a heartbeat. In Queensland, the welcome reforms  following the Mitchell Report have been put on hold. The Society of Construction Law Australia’s Report on Security of Payment and Adjudication in Australia has been widely welcomed, but it would require some considerable optimism to believe that the recommended changes will be implemented with any great rapidity.

On the other side of the world, a really well-drafted Act was passed last year in Ireland, but a commencement date has yet to be set. Senator Feargal Quinn, who was responsible for the Act, has Continue reading →

Rough Justice is Ready

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My article Rough Justice is Ready was published in the July edition of the South Australian Law Society’s Gazette.

Rough Justice is ReadySecurity of Payment – Rough Justice is Ready

By Robert Fenwick Elliott, Howard Zelling Chambers

It is notorious that litigating building disputes is typically far too expensive and far too slow. Arbitration is usually no better. If the State’s courts follow through with current proposals to create a specialist building and construction list, some improvement is likely, but even so, litigation in the courts is not an effective way for contractors and subcontractors to deal with the perennial problem of non­payment or late payment.

In recent years, the common law world has seen a revolution in this area, with 14 jurisdictions around the world now having legislated for a statutory adjudication scheme. South Australia was a late arrival, the Building and Construction Industry Security of Payment Act 2009 applying to contracts entered into from December 2011. The Act follows what is known as the East Coast Model, and in broad terms, the essentials are Continue reading →

Bridging the Gap between Theory and Reality…

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SOCLASept14… is a title which might fit all sorts of things. This time, it is for a Society of Construction Law Australia event in Sydney on 24th September.  I will be on a panel discussing

1.   Whether the recent amendments to the NSW Building and Construction Industry Security of Payment Act are likely to achieve the stated outcomes – to reduce insolvency in the building and construction industry in NSW;

and also

2.     The proposed amendments to the Queensland Act which proposes three key areas of reform – Continue reading →

Payment Disclaims

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I posted a while ago about the recent changes to Security of Payment Legislation in NSW in The Road to Hell.  The changes came into effect for the purposes of contracts entered into from 21st April this year.  One of the changes is to remove the requirement that payment claims state that they are made under the Act; potentially, any document which identifies some work done and puts a price to it might be a payment claim.

That is bad news for head contractors, not least because it is now a criminal offence for them to make a payment claim that is not accompanied by “supporting statement” saying what amounts have been paid, and what claimed amounts have not been paid, to subcontractors (there is a prescribed form for this in the new Regulation).

Despite a determined effort by the new amendments to muddy the waters as between statutory entitlements and contractual entitlements, I wonder how many NSW head contractors will be adding wording like this to their contractual applications for interim payment:

This is not a payment claim under section 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW), and no sum is hereby claimed to be due pursuant to section 8 of that Act.

By expressly disclaiming in this way, a head contractor will presumably be free to get on with life as normal Continue reading →

Postponed by the Post Office Box

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I noted a few months ago that service by Dropbox was unreliable under the Security of Payment legislation[1].

The Supreme Court in Queensland has just reached a similar conclusion in relation to Post Office boxes. In CMF Projects Pty Ltd v Masic Pty Ltd [2014] QSC 209 the adjudicator has declined to consider the Adjudication Response because he reckoned it was out of time. That timing turned on the question of whether the notice of acceptance of the appointment had been effectively served by the ANA posting it by Express Post to the respondent’s Post Office box.

The issue was complicated by the adjudicator not having himself served the acceptance notice at all. Section 23 of the Continue reading →

Security of Payment — a Practical Guide to Sabotage

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Major Ian Fenwick behind enemy lines in France

Major Ian Fenwick behind enemy lines in France

There is much to be said for the view that, in the long run, the most effective way to procure construction work is to use standard forms, and to take a reasonable approach to the allocation of contractual risks, avoiding excessively onerous provisions.  Thus, the notably successful strategy of The Olympic Delivery Authority in London was to use the NEC contract, and the World Bank now mandate the use of review boards which provide a prompt and reasonable way of preventing construction issues escalating into full blown disputes.  Experience shows that testosterone-fuelled drafting might be good for the income of construction lawyers, but does little to advance the interests of those procuring construction projects.

In any event, much of the typical onerous drafting that one sees today is entirely ineffective in jurisdictions subject to the East Coast Model of Security of Payment legislation, which drives a coach and horses through the contractual regimes.  In the face of that legislation, owners and head contractors are often thrown back onto mere bullying, threatening contractors and subcontractors that they will be blacklisted if they make use of the legislation.  Interestingly, however, contracts very rarely take any useful steps to emasculate the effect of the Security of Payment legislation, even where there is scope to do so.  Perhaps this is because the legislation itself is such an anathema to the contract draftpersons that they cannot bring themselves to read it, and work out how to best circumvent it.  With this in mind, these thoughts are offered as to how the Act might be addressed.  References are to Continue reading →

Working on the Weekend

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socalwwgroupJust back from the Society of Construction Law working weekend in Victor Harbor.

The group mug shot looks strangely old fashioned – as if it was taken in the 1970’s. It was taken by Matthew Bell, who said he might in due course photoshop  himself into the photo somehow or the other. I wonder if he will give himself flared trousers and an Afghan coat?

Notwithstanding this impression, the weekend was excellent. This format – of a relatively small group with time to talk of important stuff in our business – is a welcome change from the big “set piece” events.

My own principal contribution was Continue reading →

One bad apple

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bad-appleHere is an interesting take on a jurisdictional point, from the Northern Territory.

Broadly, the view that the courts have typically taken on judicial reviews of adjudicators’ decisions is that if the decision is defective in any one respect, the whole decision is quashed. In other words, one bad apple ruins the whole barrel.

But what if the adjudication concerns more than one dispute? In the Northern Territory, section 34 allows adjudication of multiple disputes, subject to consent:

(3)     An appointed adjudicator may:

        (a)     with the Registrar’s consent, extend the time for making a determination under section 33(1); or

        (b)     with the consent of the parties, adjudicate simultaneously 2 or more payment disputes between the parties; or

        (c)     with the consent of all the parties concerned, adjudicate the payment dispute simultaneously with another payment dispute.

In M & P Builders v Norblast [2014] NTSC 25, Continue reading →

Tuesday in Sydney

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Tomorrow (13th May 2014) I will be talking for the RICS in Sydney. TRICS May 2014he topic is Security of Payment – Moving towards Impartiality.

Justice McDougall will be talking first, and I was slightly dismayed to read an advance copy of his paper, since he has said pretty much everything there is to be said about the current law of Australia on this topic.

So I will take a different tack, Continue reading →