Kwik Flo Pty Ltd v SE Ware Street Dev Pty Ltd [2026] NSWCA 9

Andrew Hales  |  Selena Zhang

Key takeout

An adjudicator’s ruling that it lacks jurisdiction is a ‘determination’ under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) and a second adjudication application re-agitating the same jurisdictional issue will be an abuse of process, even where supplementary evidence is filed.

• Defendants to claims under section 37 of the DBPA ought to consider bringing cross-claims against wrongdoers to redistribute liability owed by those persons to an owner.

Facts

In around March 2022, Kwik Flo Pty Ltd (Kwik Flo) and SE Ware Street Dev Pty Ltd (SE Ware) entered into an oral agreement to develop land in Fairfield. The agreement was never put into writing and the parties subsequently disagreed on its terms.

Kwik Flo alleged that it agreed to finance a mixed-use development and take all necessary steps to obtain a construction certificate with SE Ware paying 30% of Kwik Flo’s costs and that, as payment, it would receive the proceeds from the sale of all lots apart from a few specified lots. Kwik Flo also alleged that there was an implied term that if the project did not complete, SE Ware would pay its costs and a reasonable margin. Although Kwik Flo carried out some work, no construction certificate was obtained and the land remained undeveloped.

First adjudication

Kwik Flo lodged an adjudication application under the SOP Act having served on SE Ware a payment claim for $3 million. SE Ware responded, arguing that the SOP Act did not apply because the agreement fell within the exclusion in section 7(2)(c) as the consideration was not calculated by reference to the value of the work carried out.

The first adjudicator accepted SE Ware’s version of the agreement, placing the contract within the section 7(2)(c) exclusion, and concluded that he had no jurisdiction to make a determination.

Second adjudication

Kwik Flo purported to withdraw its application and made a new application to a different authorised nominating authority, claiming that the first adjudicator had not made a ‘determination’ for the purposes of the SOP Act.

Kwik Flo filed supplementary statutory declarations in support of its second application.

The second adjudicator awarded Kwik Flo $1.2 million, finding that the arrangement between the parties meant consideration was based on the value of the work carried out and so was not captured by the section 7(2)(c) exclusion.

Primary judgment

SE Ware commenced proceedings in the NSW Supreme Court to restrain Kwik Flo from enforcing the second determination on the grounds that it was an abuse of process.

Peden J held that the first determination was a ‘determination’ for the purposes of the SOP Act and that the second application was accordingly an abuse of process, granting the relief sought.

Decision on appeal

The Court of Appeal dismissed the appeal.

Ground 1 – Was the first adjudicator’s ruling a ‘determination’?

The Court held that accepting Kwik Flo’s narrow construction of ‘determination’ would undermine the clear policy of the SOP Act, which seeks to prevent the repetitive re-agitation of the same issues.

The first adjudicator had observed all prescribed procedural steps before concluding he lacked jurisdiction. Both parties had filed evidence and submissions, and the adjudicator considered them before making his ruling. This distinguished the determination from Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd [2011] NSWSC 165, where the adjudicator ruled on jurisdiction before the respondent’s time to file an adjudication response had expired, in plain contravention of section 21(1) of the SOP Act.

The Court also noted that a claimant dissatisfied with a jurisdictional ruling is not without recourse. It may seek timely judicial review. Critically, neither party asserted that the first adjudicator’s determination was void for jurisdictional error.

Ground 2 – Was the second adjudication an abuse of process?

The Court found that jurisdiction was at the forefront of both applications, and that filing supplementary evidence in the second application did not mean the same issue was not being re-agitated.

The clear policy of the SOP Act cannot be circumvented by lodging a fresh application in respect of the same payment claim with evidence that could have been adduced on the first occasion. SE Ware had always reserved its right to contend that the second application was an abuse of process.