Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4

Tom French | Shevaun Stringer | Naoisa Mcnelis

Key takeout

An adjudicator’s failure to address material set-off claims raised in payment schedules and adjudication responses (even if poorly formatted or articulated) can constitute jurisdictional error leading to the affected part of the determination being set aside.

Parties issuing payment claims or schedules should clearly present all claims, deductions and set-offs in plain language. This reduces the risk of adjudicator error or oversight when determining payment claims under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOP Act).

An adjudicator is not required to trawl through hundreds of pages of material to discern what points might be raised. It is incumbent upon the parties to clearly indicate the issues and matters they contend the adjudicator needs to consider.

Facts

On 24 October 2023, Cooper & Oxley Group Pty Ltd (C&O) engaged Caledonia Contracting Pty Ltd (Caledonia)as a subcontractor for the Hamersley Golf Course redevelopment. Following disputes regarding performance, C&O terminated the subcontract on 9 July 2024. Caledonia subsequently issued a progress claim. C&O assessed the claim at a negative amount, which included set-offs for back charges, defect remediation, and outstanding debt from an earlier progress claim.

Caledonia applied for adjudication under the SOP Act and the adjudicator determined that C&O was required to pay Caledonia $131,935.76 (including GST). C&O commenced judicial review proceedings in the Supreme Court alleging jurisdictional error on 2 grounds:

• Ground 1 alleged the adjudicator failed to consider relevant material facts regarding termination and rights of set-off.

• Ground 2 alleged the adjudicator failed to have proper regard to C&O’s entitlement to set-off for back charges, outstanding debt due, and defect remediation.

Decision

Ground 1 – Rejected

Lemonis J held that the subcontract’s termination did not change how the adjudicator was required to assess the progress claim. Notwithstanding termination, the adjudicator still needed to consider previous payments and set-offs.

Ground 2 – Partially upheld

The court found jurisdictional error in relation to back charges and the outstanding debt claim. The Court rejected Ground 2 insofar as it related to defect remediation, concluding the adjudicator had engaged with and rejected that claim on the merits.

1. Back charges

C&O’s payment schedule contained a separate section headed “Back Charges” listing 6 items,

The spreadsheet lacked a net total column and formatting was imperfect. However, C&O’s adjudication submissions and statutory declaration made clear that these charges were intended to be set off.

The adjudicator’s determination made no reference to back charges in the summary table and the adjudicator made no findings regarding the claimed back charges. Whilst Lemonis J acknowledged it was understandable the adjudicator did not appreciate C&O sought to set off the back charges given the spreadsheet formatting, the court was satisfied the payment schedule clearly indicated C&O sought to set off the back charges.

The failure to address this material matter constituted jurisdictional error.

2. Outstanding debt from progress claim

C&O’s payment schedule clearly identified an outstanding debt due from a previous progress claim.  The adjudicator’s own determination heading acknowledged this set-off, yet the adjudicator stated they could not find the reason for the deduction.

Lemonis J found this did constitute jurisdictional error on the basis that:

• the reason for the deduction was clearly expressed in the payment schedule and supporting documents; and

• it could be inferred that the adjudicator failed to consider whether the progress claim supported that deduction.

3. Defect remediation

Lemonis J found that the adjudicator properly considered the defect remediation claim but rejected it on the merits and therefore the determination could not be void for jurisdictional error.