Shunshunli Pty Ltd v Seascape Constructions Pty Ltd [2023] VSC 725

Nikki Miller | Michael Lo | Henry Chesterman

Key takeout

Where there are time pressures an adjudicator must make its determination under the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOP Act) and  generally a court will not scrutinise a determination ‘with a pedantic eye‘. 

An adjudication determination will not be subject to review just because it copies and pastes sections of submissions or appears as though it comes from a precedent base.

An adjudicator is entitled to take a ‘generous’ and ‘robust’ view as to whether an adjudication response constitutes the provision of new reasons which entitles the other party to provide further submissions.

Facts

On 6 August 2019, Shunshunli Pty Ltd (respondent) contracted Seascape Constructions Pty Ltd (claimant) under a fixed price construction contract to construct a four storey residential building comprising 35 dwellings.  On 10 March 2023, the claimant served its final payment claim seeking the sum of $197,932.80 from the respondent.  The respondent scheduled an amount of nil.  The adjudicator determined that $207,612.80 was payable by the respondent to the claimant.

The respondent sought orders quashing the determination on the basis that:

• the adjudicator had not considered the respondent’s submissions that it had overpaid the claimant over the life of the contract through advance payments; and
• the adjudicator had failed to make a ‘bona fide attempt’ to conduct the adjudication or otherwise denied the respondent procedural fairness.   

Decision  

The court dismissed the respondent’s application and upheld the adjudicator’s determination.

The court held that the requirement for the adjudicator to ‘consider’ the respondent’s submissions under s 23(2)(d) of the SOP Act was satisfied as the adjudicator evidenced consideration of these issues throughout the determination itself.  There was an ‘active process of intellectual engagement‘ by the adjudicator in relation to the claimant’s submissions in respect of advance payments having been made.

The court also held that the adjudicator had discharged its obligation under section 23(3) of the SOP Act to give reasons.  The adjudicator’s reasons were sufficiently detailed to enable the parties to understand that their submissions had been taken into account, and to reveal the process of reasoning that led to the adjudicator’s conclusion.  In particular, Stynes J emphasised the short timeframe in which the determination was made and was cautious to not scrutinise the determination with an ‘overcritical or pedantic eye’.  Where an adjudicator’s conclusion is not challenged as legally erroneous by any of the grounds of review, the reasoning in support of it cannot be challenged as legally inadequate to justify it.