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Supreme Court can review building adjudications

13/10/2010

The Building and Construction Industry Security of Payment Act 1999 provides a very abbreviated process to resolve disputes about building claims.

A contractor made a progress claim for the fitout of a speciality store in the Chatswood Chase shopping centre.  The claim sought payment by 13 January 2010. The principal did not serve a payment schedule.  The Act required the contractor to give notify its intention to apply for adjudication within the following 20 business days.   It did not do so until 11 February 2010, after the statutory time limit had expired. Nevertheless, it applied for adjudication.  The adjudicator decided that the contractor was entitled to its claim.  As Justice McDougall said  ‘On any view, the adjudicator’s finding [that the notice was timely] was plainly wrong’.

The NSW Supreme Court of Appeal overturned previous decisions that the Court  lacked power  to quash a determination for jurisdictional error.

The decision confirms the need for strict compliance with the processes set out in the statute. If time limits are missed, then it will be necessary to go back and start afresh with a new claim.   Principals will now check procedural compliance with the Act very carefully.   As Chief Justice Spigelman observed, “punctilious compliance with each specific time limit is required if a builder is to have the benefit of the scheme established by the Act.”

Read the decision in Chase Oyster Bar v Hamo Industries [2010] NSWCA 190
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