International Journal of Law in the Built Environment

The validity of adjudicators' determinations containing errors of law: A comparison of

the judicial approach in England and New South Wales
Jeremy K. Coggins Steve Donohoe
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IJLBE
4,2 The validity of adjudicators’
determinations containing
errors of law
116
A comparison of the judicial approach
in England and New South Wales
Jeremy K. Coggins
University of Adelaide, Adelaide, Australia, and
Steve Donohoe
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University of Plymouth, Plymouth, UK

Abstract
Purpose – The purpose of this paper is to analyse the development of English Law and the Law in
New South Wales, Australia in statutory adjudication concerning judicial review of adjudicators’
errors in law.
Design/methodology/approach – This paper adopts a black-letter law approach focussing on
recent decisions and their effect on statutory adjudication.
Findings – Following the commencement of statutory adjudication in the UK, the English courts
swiftly supported the new “pay now, argue later”, rapid form of dispute resolution by holding
adjudication to be a private dispute resolution process akin to expert valuation. As such, the English
courts have consistently held that adjudicators operate within their jurisdiction even though they may
err on points of law, as long as such errors were committed in the course of attempting to answer a
question they were contractually authorised to consider. The courts’ position in New South Wales
(NSW), however, has differed considerably. In NSW, the first Australian State to introduce statutory
adjudication, the courts’ position with respect to errors of law on the face of the record made by an
adjudicator, who had jurisdiction to enter on the inquiry, in the course of making their determination
has been somewhat tortuous. Contrary to the initial position following commencement of statutory
adjudication, the paper concludes that it may now be more difficult to enforce an adjudicator’s
determination which contains an error of law in England than in NSW.
Originality/value – This paper compares the development of adjudication law in England with that
of one state in Australia. The different directions that the law has taken in these jurisdictions will be of
interest to academic and practitioners not only in England and Australia but to other jurisdictions
where statutory adjudication has been introduced or where legislation is being considered. To the
authors knowledge no previous study of this kind has been carried out previously.
Keywords Statutory adjudication, Judicial review, Error of law, Security of payment, United Kingdom,
Australia, Law
Paper type Research paper

Introduction
International Journal of Law in the Over the past 15 years, several Commonwealth jurisdictions[1] have enacted legislation
Built Environment
Vol. 4 No. 2, 2012
which allows parties to a construction contract the right to a statutory adjudication
pp. 116-125
q Emerald Group Publishing Limited
1756-1450
[1] The UK, New South Wales, New Zealand, Victoria, New Zealand, Queensland, Western Australia,
DOI 10.1108/17561451211242495 Northern Territory, Singapore, Australian Capital Territory, Tasmania and South Australia.
 procedure in the event of a payment dispute. Under such legislation the adjudication Determinations
process is intended to provide a quick and cheap form of dispute resolution,
unencumbered by the heavy procedural requirements of more formal dispute
containing errors
resolution methods such as arbitration and litigation. Under the legislation, of law
adjudicators’ determinations are provisional in nature, enforceable in the interim up
until the time a court judgment or arbitration award is made concerning the relevant
disputed matter arising under the construction contract. 117
Although there are differences between the various Acts with respect to scope of
coverage, terminology, physical structure and procedural requirements, a common aim
of all the legislation is to get cash flowing in as fair and expeditious a manner as
possible down the hierarchical contractual chains that exist on most commercial
construction projects.
The first jurisdiction to enact statutory adjudication[2] was the UK in the form of
Part II of The Housing Grants, Construction and Regeneration Act (the “UK Act”)[3]
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enacted in 1996[4]. The second jurisdiction to introduce statutory adjudication was

NSW in the form of the Building and Construction Industry Security of Payment Act
1999 (hereafter, referred to as the “NSW Act”), which came into force on 26 March 2000.
Following the commencement of statutory adjudication in the UK, the courts were very
supportive (Kennedy, 2007) of the new “quick and dirty” (as it is often described)
interim dispute resolution process, recognising its primary objective to improve cash
flow. As stated by Dyson J:
It is clear that Parliament intended that the adjudication should be conducted in a manner
which those familiar with the grinding detail of the traditional approach to the resolution of
construction disputes apparently find difficult to accept. But Parliament has not abolished
arbitration and litigation construction disputes. It has merely introduced an intervening
provisional stage in the dispute resolution process. Crucially, it has made it clear that
decisions of adjudicators are binding and are to be complied with until the dispute is finally
resolved[5].
As such the English courts declined to invalidate adjudicators’ determinations
containing an error of law, as long as the adjudicator had answered the right questions
put to him or her by the parties.
In contrast to the English position, the NSW courts’ approach towards errors of law in
adjudicators’ determinations has taken several twists and turns. For the first four years
after commencement of the legislation, under its supervisory jurisdiction[6], the NSW
Supreme Court viewed adjudicators’ determinations to be susceptible to judicial review
by way of relief in the nature of prerogative writs. As such, amongst other types of
jurisdictional errors, judicial review was available in relation to error of law on the face of
the record. This position changed in the NSW Court of Appeal’s 2004 decision in Brodyn

[2] The UK Act does not limit statutory adjudication to payment disputes only, but permits
parties to initiate statutory adjudication for any dispute on a construction contract.
[3] Amendments to the UK Act have been passed in Part 8 of the Local Democracy, Economic
Development and Construction Act 2009.
[4] Although the provisions of Part II of The Housing Grants, Construction and Regeneration
Act did not commence in England and Wales until 1 May 1998 when The Scheme for
Construction Contracts (England and Wales) Regulations 1998 came into force.
[5] Macob v. Morrison BLR 93 at 97.
[6] See Supreme Court Act 1970, s 69.
 IJLBE Pty Ltd v. Davenport [7](Brodyn), where the court held that prerogative relief was not
4,2 available under the NSW legislation, but instead an adjudicator’s determination would
be held void if it did not comply with certain specified “basic and essential
requirements”. Recently, in Chase Oyster Bar Pty Ltd v. Hamo Industries Pty Ltd[8]
(Chase), the NSW Court of Appeal reversed Brodyn, holding that there was no sufficient
basis in Brodyn to warrant exclusion of relief in the nature of prerogative writs.
118 It may, therefore, be seen that the English and NSW courts have adopted different
approaches to the judicial review, in general, of adjudicators’ determinations. This
article considers in detail these different approaches by reviewing the relevant English
and NSW case law, and concludes by considering in which jurisdiction an adjudicator’s
determination containing an error of law is more likely to be enforced.

The English approach

In Bouygues (UK) Ltd v. Dahl-Jensen (UK) Ltd [9 ](Bouygues), the adjudicator mistakenly
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included for full release of retention monies in his valuation of a payment claim when
such release was not yet due. The adjudicator’s error had a significant effect on the
outcome of the determination, resulting in an award to the defendant subcontractor of
£208,000 instead of an award to the plaintiff head contractor of £179,000. The Court of
Appeal upheld the adjudicator’s determination even though the award was wrong,
agreeing with the following approach adopted by the court of first instance in relation to
the decision of an expert valuer in Nikko Hotels (UK) Ltd v. MERPC Plc[10]:
[. . .] if he has answered the right question in the wrong way, his decision will be binding. If he
has answered the wrong question, his decision will be a nullity.
This is a position which accords with the contractual nature of adjudication. As noted
by Forbes (2001):
In legal terms the enforcement of an adjudication is based on the contractual proposition that,
if the parties have agreed to leave a dispute to be resolved by a third party such as an
adjudicator and be bound by that decision (which is, of course, the position in adjudication),
the court will then hold the parties to their mutual promises.
Thus, as long as the adjudicator answers the questions put before him by the parties
in a particular dispute, he is within his contractual authority and, hence, is acting within
his jurisdiction. As the adjudicator is not a government appointed arbiter, he is not
obliged to interpret points of law correctly. He may err on a point of law, as long as
such error was committed in the course of attempting to answer a question he was
authorised to consider. As Forbes (2001) observes, the relevant principle was expressed
in Beaufort Developments (NI) Ltd v. Gilbert-Nash NI Ltd in the following terms[11]:
The powers of the architect or arbitrator [or adjudicator – Forbes’ interpolation], whatever they
may be, are conferred by the contract. It seems to me more accurate to say that the parties have
agreed that their contractual obligations are to be whatever the architect or arbitrator
[or adjudicator] interprets them to be. In such a case, the opinion of the court or anyone else as to

[7] [2004] NSWCA 394.

[8] [2010] NSWCA 190.
[9] [2000] BLR 522.
[10] [1991] 2 EGLR at 103.
[11] [1999] 1 AC 266, HL, per Lord Hoffman at 273.
 what the contract requires is simply irrelevant. To enforce such an interpretation of the Determinations
contract would be something different from what the parties had agreed.
containing errors
In O’Donnell Developments Ltd v. Build Ability Limited[12] (O’Donnell ) various of law
disputes arose on a project known as “The Cube” in Birmingham, UK. Build Ability
had appointed O’Donnell to build the concrete frame for the Cube and arguments arose
concerning:
.
the value of the works; and
119
.
the validity of certain deductions made by Build Ability against O’Donnell’s
account.

In order to calculate the value of the works, the adjudicator requested details of
payments made by build ability from O’Donnell up to and including valuation No. 25.
The figures supplied by O’Donnell went beyond valuation No. 25. This resulted in the
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adjudicator making an award of £150,000 less than it ought to have been.

On discovering the adjudicator’s error, O’Donnell contacted the adjudicator and
asked him to correct this error. Build Ability objected to the correction. The adjudicator
considered that he had the power to correct the error and within two days of issuing the
original decision issued a revised decision.
Build Ability contended that the adjudicator had no jurisdiction to make a revised
decision.
The matter was referred to Mr Justice Ramsey in the Technology and Construction
Court. Ramsey considered Bouygues and cited Dyson J who said that:
[. . .] in deciding whether the adjudicator has decided the wrong question rather than given a
wrong answer to the right question, the court should bear in mind that the speedy nature of
the adjudication process means that mistakes will inevitably occur, and, in my view, it should
guard against characterising a mistaken answer to an issue that lies within that scope of the
reference as an excess of jurisdiction.
In O’Donnell, Ramsey J following Dyson’s reasoning in Bouygues, held that the
adjudicator was giving effect to his first thought and not to a reconsideration of his
original decision and refused to give a declaration of “excess of jurisdiction”. Ramsey J
took the view that the Court will not look too closely at the content of an adjudicator’s
decision provided the correct question has been answered.
However, some doubt has been introduced as to the enforceability of adjudicators’
determinations containing errors of law by the case of Geoffrey Osborne Ltd v. Atkins
Rail Ltd[13](Atkins). In this case Atkins was employed as main contractor for
various railway works. Atkins sub-contracted certain civil engineering works to
Osborne. Disputes arose which were referred to adjudication. The adjudicator
miscalculated the amount due to Osborne by failing to take into account previous sums
certified and paid by Atkins. The magnitude of the error was that the adjudicator’s
decision would have resulted in Atkins overpaying Osborne by approximately
£900,000.
Osborne applied for enforcement via summary judgement. Atkins resisted payment
and sought declarations from the Technology and Construction Court that:

[12] [2009] EWHC 3388 (TCC).

[13] [2009] EWHC 2425 (TCC).
 IJLBE (1) the adjudicator lacked jurisdiction; and
4,2 (2) the decision was wrong as a matter of fact and/or law and therefore ought not to
be enforced.

Mr Justice Edwards-Stuart held that the courts have power to make a declaration
which results in a final determination on a question decided by the adjudicator,
120 provided that the question does not involve any substantial dispute of fact.
The learned judge also held that parts of the adjudicator’s decision can be isolated
and that the said parts can be finally determined.
The learned judge refused a declaration that the adjudicator had exceeded his
jurisdiction but held that that the adjudicator had erred in fact and/or law and
consequently Osborne was only entitled to summary judgment in respect of costs and
fees, ie the majority of its claim was rejected.
The decision in Atkins seems to be a complete about turn from Dyson’s philosophy
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expressed in Bouygues. It would appear to mean that an unsuccessful party can avoid
payment (or a substantial part of it) if it can overturn the provisional decision of the
adjudicator in court. The ramifications of this decision have the potential to undermine
the whole ethos of adjudication in England. As Hart and Bailey (2010) note:
This decision may prompt some parties to refer disputes which turn on points of law to the
courts instead of, or before an adjudication [. . .] This is because if when enforcing an
adjudicator’s decision the court may re-decide discrete points of law it may ultimately be
quicker to litigate those points in the first instance, as well as cheaper (in a forum that also
permits costs recovery).

The NSW approach

In Musico & Ors v. Davenport & Ors[14](Musico), the NSW Supreme Court considered
for the first time whether an adjudicator’s determination under the security of payment
legislation could be challenged by judicial review. In Musico, the plaintiff employer
applied to have the adjudicator’s determination – that a progress payment of $712,757
plus interest be paid to the contractor – quashed on, amongst other things, the basis
that the adjudicator’s determination was vitiated by several patent errors of law.
In his judgment, McDougall J held that the legislative intent of the Act[15] was
inconsistent with allowing judicial review on the basis of non-jurisdictional error of
law. His Honour did, however, view[16] that judicial review was available on
jurisdictional grounds, which may include a jurisdictional error of law on the face of
the record[17]. In reaching this conclusion, his Honour applied the same principle

[14] [2003] NSWSC 977.

[15] In this respect, his Honour specifically referred to s 25(4) of the NSW Act, which prohibits an
adjudication respondent from challenging an adjudicator’s determination in any
proceedings initiated by the respondent to set aside an adjudicator’s determination which
has been filed by the claimant as a judgment for a debt in court.
[16] Relying on Anisminic Ltd v. Foreign Compensation Commission [1969] 2 AC 147 per Lord
Reid at 171 “as cited with apparent approval, in relation to administrative tribunals,
in Craig v. The State of South Australia (1995) 184 CLR 163]”.
[17] In Musico at [66], McDougall J viewed that, in the context of adjudication, the record would
include the adjudication application, any adjudication response, perhaps any further written
submissions and comment thereon requested or permitted by the adjudicator and the
 to adjudicators as did the High Court of Australia to administrative tribunals, on the Determinations
basis that both lack power to authoritatively determine questions of law, in Craig v. containing errors
The State of South Australia (Craig)[18]:
of law
[. . .] an administrative tribunal [i.e. one lacking judicial power] falls into an error of law which
causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material,
to rely on irrelevant material or, at least in some circumstances to make an erroneous finding
or to reach a mistaken conclusion, and the tribunal’s exercise or purported exercise of power is 121
thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error
which will invalidate any order or decision of the tribunal which reflects it.
McDougall J found that some of the adjudicator’s errors of law had led to the adjudicator
failing to value the payment claim in accordance with the relevant provisions of the contract
as required by the Act[19]. As such, the court found that jurisdictional error of law had
occurred as the adjudicator had failed to carry out the task that the Act requires to be carried
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out in the manner that the Act requires it to be carried out[20]. Accordingly, the Court
quashed the adjudicator’s determination by granting an order in the nature of certiorari[21].
Whilst Musico clarified the courts’ position as to judicial review, it did not provide
statutory adjudication with the judicial support it needed. Musico was applied to
several subsequent cases[22] in order to quash adjudicators’ determinations until the
NSW Court of Appeal handed down its decision in Brodyn.
In Brodyn, the plaintiff head contractor made an application to have the
adjudicator’s determination – that the claimant subcontractor should be awarded an
amount of $180,059 – quashed by way of certiorari. The application was made on the
basis of, inter alia, an error of law in that the relevant payment claim was invalid due to
it being one of several payment claims made after the termination of the construction
contract, when only one such payment claim should be permitted under the contractual
provisions. Disagreeing with Musico, the court found that relief in the nature of
certiorari was not available to quash an adjudicator’s determination in relation to
jurisdictional error[23]. Hodgson JA considered that:
[. . .] the availability of certiorari [. . .] would not accord with the legislative intention disclosed
in the Act that these provisional determinations be made and given effect to with minimum
delay and minimum court involvement[24].
Given the legislative intent, his Honour viewed that the jurisdictional error approach “cast
the (judicial review) net too widely”[25]. Instead, Hodgson JA preferred an approach where

determination itself. Subsequently, in Chase at [91], Basten JA stated that the record will
include the record will include both the determination and the reasons of the adjudicator.
[18] (1995) 184 CLR 163.
[19] See NSW Act, ss 9(a) and 10(1)(a).
[20] Musico & Ors v. Davenport & Ors [2003] NSWSC 977 at [119].
[21] An order in the nature of certiorari is an order a court issues so that it can review the
decision and proceedings of an inferior tribunal and determine whether the decision ought
to be quashed.
[22] For example, see Abacus Funds Management v. Davenport [2003] NSWSC 1027, Multiplex
Constructions Pty Ltd v. Luikens [2003] NSWSC 1140, and Quasar Constructions v. Demtech
Pty Ltd [2004] NSWSC 116.
[23] Brodyn at [58]-[59].
[24] Brodyn per Hodgson JA at [58].
 IJLBE the court asks whether a requirement being considered by an adjudicator was intended
4,2 by the legislature to be an essential pre-condition for the existence of an adjudicator’s
determination. As such, Hodgson J laid down five basic and essential requirements of the
Act for the existence of a valid adjudicator’s determination as follows[26]:
(1) The existence of a construction contract between the claimant and the
respondent, to which the Act applies (ss.7 and 8).
122
(2) The service by the claimant on the respondent of a payment claim (s.13).
(3) The making of an adjudication application by the claimant to an authorised
nominating authority (s.17).
(4) The reference of the application to an eligible adjudicator, who accepts the
application (ss.18 and 19).
(5) The determination by the adjudicator of this application (ss.19(2) and 21(5), by
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determining the amount of the progress payment, the date on which it becomes
or became due and the rate of interest payable (ss.22(1)) and the issue of a
determination in writing (s.22(3)(a)).

If any of the basic and essential requirements[27] are not satisfied then, according to
Hodgson JA[28], the purported determination will be void as it will not in truth be an
adjudicator’s determination within the meaning of the Act. Thus, relief will be available
by way of declaration or injunction, without the need to quash the determination by
means of an order in the nature of certiorari.
As such, Hodgson JA found that errors of law on the face of the record per se, of the
type argued in Musico and Brodyn, did not vitiate an adjudicator’s determination as
they are “more detailed requirements” of the Act with which “the legislature did not
intend that exact compliance”[29].
In Chase, the claimant gave notice of its intention to apply for adjudication of the
payment claim outside of the 20 business day period required by s 17(2)(a) of the NSW
Act. The adjudicator erroneously concluded that the notice had been given in a timely
manner, and made a determination that the claimant was entitled to payment of the
claimed amount plus interest. The respondent to the adjudication initiated an action in
the NSW Supreme Court to have the adjudicator’s determination quashed on the basis
of jurisdictional error despite Hodgson JA’s finding in Brodyn that compliance with the
more detailed requirements of s 17 (amongst others) was not essential to the existence
of an adjudicator’s determination[30]. The NSW Supreme Court referred the case to the
NSW Court of Appeal, who would not be bound by Brodyn.

[25] Brodyn at [54].

[26] Brodyn at [53]. The section numbers shown in brackets refer to the relevant sections of the
NSW Act.
[27] Hodgson JA, Brodyn at [55], noted that his list of basic and essential requirements may not
be exhaustive.
[28] Brodyn at [52].
[29] Brodyn at [55].
[30] Brodyn at [54]. See, also, JAR Developments Pty Ltd v. Castleplex Pty Ltd [2007] NSWSC 737
where Rein J stated at [46], “Brodyn leads to the conclusion that an adjudication in which the
 The NSW Court of Appeal held that non-compliance with the notice provision under Determinations
s 17(2)(a) of the NSW Act did amount to jurisdictional error. In doing so, the court containing errors
reversed its position in Brodyn, finding that the Supreme Court does have the power
to grant relief in the nature of certiorari to quash an adjudicator’s determination[31]. In of law
reaching this decision, the court relied on the approach taken by the High Court of
Australia in Kirk v. Industrial Court of New South Wales[32] (Kirk) “that it was beyond
the legislative power of a State to take away from that State’s Supreme Court its 123
supervisory power to grant relief for jurisdictional error”[33].
Whilst reinstating jurisdictional error as the basis for judicial review of
adjudicators’ determinations, the court did not, beyond its immediate consideration
of s 17(2)(a), list, or provide any “rigid taxonomy”[34], as to the types of matters which
might be considered jurisdictional error in relation to the Act. McDougall J did,
however, consider that failure to satisfy the basic and essential requirements identified
in Brodyn may also be characterised as jurisdictional error[35].
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As Bell (2011, 37) states, following Chase:

At a practical level [. . .] the immediate question [. . .] [was] whether the decision will open up
substantial opportunities for disgruntled parties to challenge adjudication determinations
which did not already exist prior to the decision being handed down.
Although notably, in this respect, Spiegelman CJ seemed “not to expect the floodgates
to open” (Bell, 2011, 42):
As Hodgson JA recognised in Brodyn, the purpose of the legislative scheme is best served by
restricting the scope of intervention by the Courts. I do not believe that there will be frequent
occasion for such interference – perhaps after a transitional period – once it is realised in the
building industry that punctilious compliance with each specific time limit is required if a
builder is to have the benefit of the scheme established by the Act[36].
The first indication that Spiegelman CJ’s prediction was right came in the NSW Supreme
Court decision of Clyde Bergemann v. Varley Power[37] (Varley). In Varley, the court had to
decide whether an adjudicator acts in excess of jurisdiction by determining that an

adjudicator erroneously but bona fide and in accordance with the rules of natural justice
determines, that a requisite time limit has been met, will not thereby be rendered void [. . .]”.
[31] Notably, the Victorian Supreme Court, diverging from Brodyn, had previously reached this
conclusion in Grocon Constructors v. Planit Cocciardi Joint Venture (No 2) [2009] VSC 426.
See The Honourable Justice Vickery (2011, [59]-[61]) for further discussion.
[32] (2010) 239 CLR 531.
[33] Chase at [154].
[34] Indeed, in Chase at [159], McDougall J noted that in Kirk the majority emphasised “that the
reasoning in Craig is not to be seen as providing a rigid taxonomy of jurisdictional error”
and “not to be taken as marking the boundaries of the relevant field”.
[35] Chase at [154]. Relying on the NSW Court of Appeal’s concession, in Coordinated Construction
Co Pty Ltd v. JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385 at [71], that the description of
basic and essential requirements as essential pre-conditions for the existence of an adjudicator’s
determination reflected the concept of jurisdictional error under the general law. Subsequently,
in Clyde Bergemann v. Varley Power [2011] NSWSC 1039 at [41], McDougall J confirmed that the
basis and essential requirements in Brodyn may now be accepted as jurisdictional.
[36] Chase at [55].
[37] [2011] NSWSC 1039.
 IJLBE applicant is entitled to a progress payment that exceeds the amount calculated in
4,2 accordance with the terms of the contract (i.e. non-compliance with s 9(a) of the NSW Act).
McDougall J held that the adjudicator did not fall into jurisdictional error by failing to
correctly apply the relevant contractual provisions with respect to the calculation of the
progress payment amount.
In reaching his decision, McDougall J believed there was a marked contrast between
124 failures to meet the requirements of s 9(a) and s 17(2)(a) of the NSW Act,which had been
identified as jurisdictional in Chase[38]. His Honour noted that “the jurisdictional
requirements so far identified are, for the most part, anterior to the process of
adjudication”[39]. Further, he relied on Spiegelman CJ’s distinction in Chase[40] between
“a fact to be adjudicated upon in the course of enquiry” and “an essential preliminary to
the decision-making process”[41].
His Honour considered that s 9(a) concerned the former, and agreed with Palmer J’s
finding in Multiplex Constructions Pty Ltd v. Luikens[42], that:
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If determination of a disputed progress claim depends upon resolution of a question as to what

are the relevant terms of a contract, it must necessarily be implicit in the jurisdiction conferred
on the adjudicator by the Act that he or she have jurisdiction to decide that question.
As such, McDougall J viewed s 9(a) not to be a condition of jurisdiction, but rather a
“description of the mechanical aspects of the essential task to be performed in the
exercise of the jurisdiction that is conferred”[43]. His Honour added, “it would be most
unusual for a mechanical provision such as s 9 to be characterised as jurisdictional”[44].

Conclusion
The English and NSW courts have adopted different approaches to the judicial review
of adjudicators’ determinations[45]. The English courts have likened the position of an
adjudicator to that of a contractually appointed expert and, accordingly, view
adjudication as a private dispute resolution process. As such the English courts have
applied a straightforward test for the validity of an adjudicator’s determination –
namely, has the adjudicator answered the right question in the wrong way, or
the wrong question? The NSW courts, however, view adjudication as falling under the
auspices of administrative law. Accordingly, the current approach of the NSW courts is
to allow relief, under their supervisory jurisdiction, in the nature of prerogative writs
where an adjudicator has committed jurisdictional error.
Initially, following enactment, it was the English approach which provided more
support to statutory adjudication, shoring up adjudicators’ determinations containing

[38] Varley at [41].

[39] Varley at [41].
[40] At [43].
[41] Varley at [42]. His Honour explained that: “In this context ‘preliminary’ means not so much
chronologically as legally antecedent to the decision-making process”.
[42] [2003] NSWSC 1140 at [58].
[43] Varley at [52].
[44] Varley at [52].
[45] In this respect it may be pertinent to note that the legislative structure of the English Act
encourages the parties to contractually agree the detail of an adjudicator’s authority
whereas the NSW Act does not.
 errors of law on the face of the record. However, following Atkins, it would now appear Determinations
that a party who has been unsuccessful in adjudication may be able to avoid payment
of the determination by resisting payment and then asking the court to make a
containing errors
declaration, in any subsequent enforcement proceedings, as to a final determination on of law
a point of law decided by the adjudicator.
By contrast, the NSW courts initial approach, that errors of law on the face of the record
may be categorised as jurisdictional, resulted in several adjudicators’ determinations being 125
quashed. Four years after commencement, the NSW courts provided adjudication with the
judicial support it needed to succeed by excluding the availability of the Court’s supervisory
jurisdiction, by way of relief in the nature of prerogative writs. This position, however,
became unsustainable following the ruling of the Australian High Court in 2010 that a State
legislature does not have the power to take away from that State’s Supreme Court its
supervisory power. Accordingly, in Chase, the NSW courts returned to a jurisdictional error
approach under its supervisory jurisdiction.
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Following the decisions in both Atkins and Chase, there now exists some
uncertainty in their respective jurisdictions as to the enforceability of adjudicators’
determinations which contain errors of law. As such, both decisions have significant
implications in that they may, depending on how they are applied in future court
judgments, potentially undermine the statutory adjudication process.
Although, in Varley, the NSW Supreme Court has indicated that, despite Chase, it
may be difficult for a plaintiff to prove that an adjudicator’s error of law regarding a
question to be adjudicated upon in the course of enquiry is jurisdictional given the
legislative intent of the NSW Act.
Indeed, in light of Varley, it may now be more difficult to enforce an adjudicator’s
determination which contains an error of law in England than in NSW.

References
Forbes, J. (2001), Adjudication – The First 1,000 Days: A General Overview, Society of
Construction Law, London, December.
Hart, L. and Bailey, J. (2010), “A new way of preventing enforcement”, Mondaq website, available
at: www.mondaq.com/article.asp?articleid¼93110 (accessed 10 October 2011).
Kennedy, P. (2007), “Mission drift in statutory adjudication”, Paper presented at the Construction
and Building Research Conference of the Royal Institution of Chartered Surveyors,
Atlanta, 6-7 September.
Vickery, P. (2011), “Security of payment legislation in Australia, differences between the states – Vive
la Différence?”, Speech to the Building Dispute Practitioners Society, Melbourne, 12 October.

Further reading
Iemma, M. (2002), Building and Construction Industry Security of Payment Amendment Bill,
Second Reading Speech, NSW Legislative Assembly, Hansard, NSW, 12 November.

Corresponding author
Steve Donohoe can be contacted at: sdonohoe@plymouth.ac.uk

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