The Supreme Court of Victoria has recently revisited its position regarding challenges to determinations made by an adjudicator under the Building and Construction Security of Payment Act 2002 (Vic) (Act).
As many of our building and construction clients are aware, it is notoriously difficult to overturn an adjudicator’s determination on the basis that the adjudicator made an error of fact (as opposed to an error of law).
The Victorian courts’ reluctance to allow an adjudicator’s determination to be challenged stems from the decision of the Honourable Justice Vickery in Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture [2009] VSC 426 (Grocon), who found that the Act gives adjudicators the ability to make decisions in relation to their jurisdiction and if the decision is incorrect, then it cannot be overturned on appeal to a court of law.
KCL Law (formerly called Kliger Partners) was involved in the landmark Grocon decision which has been followed by Victorian courts since 2009, until now.
In a decision handed down last week by the Supreme Court Victoria (Sugar Australia Pty Ltd v Southern Ocean Pty Ltd) (Sugar), the Honourable Justice Vickery revisited the legal principles established in Grocon. His Honour came to the conclusion that the Act does not give an adjudicator the power to finally determine the validity of an adjudication application and if there is to be any challenge to the jurisdiction of the adjudicator, then it can be finally determined on the basis of the facts found by the Supreme Court on appeal.
His Honour emphasised that his ruling does not prevent an adjudicator from making a determination about their jurisdiction, but the determination is open to judicial review in the Supreme Court if it is challenged.
The Court’s decision in Sugar brings the Victorian Supreme Court’s position in line with the views adopted by the High Court of Australia (Kirk v Industrial Relations Commission (2010) 239 CLR 531) and similarly by the Supreme Court of Appeal of New South Wales (Chase Oyster Bar v Hamo Industries [2010] NSWCA 190).
The decision in Sugar is also significant in that it widens the door on the Supreme Court’s power to review the determinations made by adjudicators under the Act.
Importantly, Sugar paves a pathway for the Victorian courts to bring into question any findings of fact made by an adjudicator under the Act.
More information
For more about how developments in building and construction law affect your rights, please contact Darren Cain, Principal Lawyer and Head of Construction and Infrastructure, on (03) 8600 8835 or dcain@kcllaw.com.au.
Note: This update is a guide only and is not intended to constitute legal advice.