12 Bridge Street Epping Pty Ltd atf 12 Bridge Street Epping Unit Trust v D.R. Design (NSW) Pty Ltd [2022] NSWSC 866

Andrew Hales  |  Karen Hanigan  |  Emily Miers

Key takeout

It’s safe to say that the powers afforded to an adjudicator under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) are strictly limited.  This case reaffirms the power of an adjudicator to submit to the parties a request for ‘further written submissions‘ as long as parties have first made ‘written submissions’.  An adjudicator does not have to wait until an adjudication response has been lodged before requesting further written submissions.

Facts

On 21 February 2020, the plaintiff (developer) and first defendant (architect) entered into a contract for a development in Epping. 

On 30 March 2022, the architect served on the developer a payment claim for $123,428.25.

On 13 April 2022, the developer served on the architect a payment schedule in the amount of $nil.

On 22 April 2022, the architect forwarded an adjudication application and submissions to Adjudicate Today.

On 28 April 2022, the adjudicator notified the parties of acceptance of their appointment.

On 5 May 2022, the developer emailed the adjudicator alleging it had not been served with the adjudication application.  On the same day the adjudicator emailed the parties stating ‘the parties are invited to make submissions as to the date and method of service of the Adjudication Application and the date and service of the Notification of my Acceptance‘.  The adjudicator stipulated a timeline requiring that submissions must be made by 1:30pm on 6 May 2022 and any responsive submissions must be made by 4:30pm on 6 May 2022.

On 5 and 6 May 2022, the architect and developer issued their submissions as requested by the adjudicator.  On 26 May 2022 the adjudicator made an adjudication determination that the developer pay the architect $106,847.  On 2 June 2022, the developer commenced proceedings challenging that adjudication determination.

This dispute concerned whether the adjudicator was permitted under the SOP Act to:

1. issue the directions in the 5 May 2022 correspondence to the parties;
   
2. truncate the time for the parties to make submissions; and
   
3. truncate the time for the developer to provide an adjudication response.  

Decision

The proceedings were dismissed, resulting in the validity of the adjudication determination being upheld.

Justice Stevenson held:

1. Under section 21(4)(a) of the SOP Act the adjudicator could request further written submissions when the adjudicator had received submissions from the parties. In that regard, his Honour held that the developer’s email of 5 May 2022 was characterised as a submission that the developer had not been served with an adjudication application. His Honour did not accept the developer’s argument that ‘further written submissions’ could only be requested once an adjudication response had been lodged.
   
2. The adjudicator could set deadlines for further submissions under section 21(4)(b) of the SOP Act.
   
3. The developer’s argument that its 6 May 2022 submission was an adjudication response, such that it was precluded from lodging any further adjudication response, was rejected. The developer’s 6 May 2022 submissions were in response to the adjudicator’s request pursuant to section 21(4) and did not exclude the developer from providing an adjudication response. It was the developer that further chose not to lodge an adjudication response at all.

His Honour noted there was no lack of procedural fairness as the adjudicator had responded ‘sensibly and timeously’.