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High Court to consider further security of payment issues

The High Court has recently granted permission (Special Leave) for the appeal of two decisions relating to whether a determination under the NSW and South Australia and Security of Payment legislation could be judicially reviewed for a non jurisdictional error of law.

Both decisions dealt with the question as to whether a determination of adjudicator can be challenged without the need to show jurisdictional error.

The High Court will now need to determine whether NSW and South Australian Courts of Appeal were wrong in deciding that an adjudicator’s decision could not be challenged on non-jurisdictional grounds.

Shade Systems v Probuild

The first decision arises from the judgment of the  NSW Court of Appeal in Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) [2016] NSWCA 379 (23 December 2016)(Probuild) which we discussed in our publication “Door closes on challenges to decisions of Adjudicators” posted 22 February 2017.

In summary, in Probuild the NSW Court of Appeal the Court held that it had no power to review an adjudicators determination where the errors identified were non-jurisdictional errors of law.

Maxcon v Vadasz

The second decision arises from the judgment of the Full Court of the South Australian Supreme Court in Maxcon Constructions Pty Ltd v Vadasz [2017] SASCFC 2.

In that case, the Full Court held that an adjudicator made an error on the face of the record rather than a jurisdictional error in determining that retention provisions were “pay when paid” provisions and void under the SOPA. The Full Court held further that this type of error was not open to a review by a Court.

Appeals to the High Court

As both appeals to the High Court raised the same question of law, the Special Leave applications were heard together.

If the appeals to the High Court are ultimately successful, it is likely that there will be an increase in the number of adjudication determinations that are reviewed by the courts.

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