Jako Industries Pty Ltd v Perkins WA Pty Ltd [2026] WASC 158

Tom French | Shevaun Stringer | Naoisa McNelis

Key takeouts

The threshold for setting aside an expert determination remains high. Disagreement with methodology or outcome cannot be recast as a process failure or gross negligence. The party challenging the decision must identify an actual departure from the agreed process.

A contractual clause that the expert ‘will not act as an arbitrator’, reinforced by a deeming provision in the applicable rules, is determinative. The relevant inquiry on an application to the Court is whether the expert followed the contractually agreed process, not whether individual steps resemble arbitration.

An expert is not required to independently remeasure or revalue work unless the contract expressly mandates it. Preferring one party’s evidence, and explaining why, is a legitimate exercise of expertise.

Parties should raise procedural objections during the expert determination process, not after an unfavourable result. A failure to object, combined with a failure to adduce independent expert evidence when given the opportunity, will be very difficult to overcome in any subsequent Court application.

Background

Jako Industries Pty Ltd (Jako) and Perkins (WA) Pty Ltd (Perkins) were parties to a subcontract for mechanical services works (subcontract). The subcontract provided that unresolved disputes could be referred for expert determination under the Resolution Institute Expert Determination Rules (Rules).

The parties agreed that the issue-for-construction Bill of Quantities superseded the issue-for-pricing Bill of Quantities. The dispute concerned the correct remeasurement of the as-installed works and the applicable rates. Jako sought increases totalling approximately $3.96 million; Perkins contended that Jako had been overpaid by $825,387. On Jako’s case, the reassessment of the Bill of Quantities left it with an alleged shortfall of approximately $1.34 million. The matter was referred to expert determination, and the parties agree the dispute would be determined on the papers.

The expert determined that Perkins owed Jako a further $208,054 plus interest, which was substantially less than Jako claimed. The expert resolved disputed quantities by assessing whose measurements were more likely correct, generally preferring Perkins’ quantities because they were supported by an independent expert report. Jako was granted an extension and permission to submit a responsive expert report but did not adduce any independent expert evidence in support of its position. Jako sought a declaration that the expert determination was of no force and effect, arguing the expert acted as an arbitrator (not an expert) and was grossly negligent. Its core complaints were that he did not independently remeasure the works or assess the rates, considered Jako bore the onus of proof, and determined the matter on the papers without cross-examination. Jako did not raise any procedural objection during the expert determination process.

Decision

Forrester J refused the application.

The expert did not act as an arbitrator

The clause ‘the Expert will not act as an arbitrator’, read with r 5(2) of the Rules, excluded arbitration legislation and confirmed the process was an expert determination. The deeming provision in r 5(2)(a) was designed precisely to recognise that, even where there was overlap between an expert determination process and acting in an arbitral manner, the parties intended that the process be regarded as an expert determination and did not require the expert to act in a judicial manner.

No part of the subcontract required independent remeasurement. Several factors were inconsistent with such a requirement:

• the parties’ failure to specify it;
• the allowance for expert reports; and
• the provision for an expeditious and cost-effective process.

Preferring a party’s evidence did not mean the expert failed to use his expertise. His assessment of whose quantities were ‘more likely to be correct’ demonstrated professional judgment. He was not required to preface each opinion with formulaic language. His use of ‘agree’ conveyed he had formed his own view and concurred. As to rates, the Court found the expert did conduct an independent assessment. While he generally preferred Perkins’ rates, he rejected them on several occasions and gave detailed reasons for his conclusions. His approach to the onus of proof was orthodox and consistent with the Rules.

No denial of procedural fairness

The expert was not acting in a judicial manner and was not obliged to afford procedural fairness in the arbitral sense. The parties had agreed that the dispute would proceed on the papers. Jako could not later complain about the consequences of that agreement. Jako adduced no evidence that it was denied a reasonable opportunity to present expert evidence; it offered no explanation for why it did not submit independent expert evidence with its initial submission, nor any evidence that the time granted was insufficient.

The Court noted (without needing to decide the point) that Perkins had raised r 12 of the Rules, which deems a party to have waived its right to object to the process if it participates without raising a timely objection.

Negligence claim dismissed

Having found the expert acted within the contractually agreed process, Forrester J held he could not be grossly negligent in preferring Perkins’ quantities. Jako’s complaints were, in substance, a repackaging of its rejected argument that the expert was not entitled to prefer Perkins’ quantities. In circumstances where the Court found the expert did apply his skill, knowledge and expertise, gross negligence on that basis could not be established. As to rates, the expert’s interpretation of the relevant clauses was not erroneous, and in any event was stated as an additional rather than primary reason for his determination.