ACT Adjudication and Judicial Review

The assignment delves into the complexities of construction adjudication under the ACT Building and Construction Industry (Security of Payment) Act, 2009. It examines key adjudicator considerations and analyzes the legal grounds for judicial review of an adjudication decision, highlighting relevant sections from the act. The document also explains the purpose and significance of an Adjudication Certificate in appeals against decisions.

CONSTRUCTION LAW
Security of Payments Act (ACT) – Applying for Adjudication
(Building & Construction Industry Security of Payment Act (ACT), 2009)
Those operating in the construction and building industry undertaking any type of
construction of building work or even those connected with the supply of the related
goods and services will commonly include the following notation on their tax invoices:
"This is a payment claim made pursuant to the Building and Construction Industry
(Security of Payment) Act 2009 (ACT)”.
Insertion of these words on the tax invoice is considered by many in the business or
supply in the construction industry that, the mere insertion of these words, they can
make their tax invoices compliant to the payment claims under the application of the
above said Act.
KEY CONCEPTS
Although, in my opinion, being a legal professional and working in the capacity of a
consultant for different organisations operating in this industry, there are other key
concepts1 and information which have more mandatory requirement for making a
payment claim more effective and lawfully binding under the Act in discussion. These
include:
 A clear and concise identification of the parties involved.
 A clear mention of the Reference Date.
 A complete and concise identification of the work on behalf of which the claim
is filed.
I am briefly describing these key concepts, so that they can be understood in the context
of this Case Study.
1 Key Concepts for Payment Claims under the Building and Construction Industry (Security of Payment)
Act (ACT), 2009 can be viewed in detail on
https://www.mba.org.au/news-and-media/ibuilder/article/key-concepts-for-payment-claims-under-the-
building-and-construction-industry-security-of-payment-act-2009-act/

Identification of Parties
As the requirements are specified for creating a valid tax invoice for the purpose of
GST, similar conditions apply in the case of payment claims under the specified Act.
The foremost legal requirement is to clearly and accurately establish the identity of the
concerned parties and to specify their roles in the transaction which is being referred o
in the claim documents. Parties involved include the claimant, the respondent and all the
other suppliers and technical professionals along with their identification details, such as
their ACN/ABN, registered address, GST Details and other relevant information2.
CASE STUDY:
In this case study, the Claimant is M/s. Schmicko’s Pty Ltd, ABN-10 987 654 321
through its sole owner Mr. Mick Morton. The Respondent is M/s. Jpordie’s Joint Pty
Ltd of 123 Bunda St, Canberra City ACT 2601 through its sole owner Mr. Jordie Jones.
Reference Date
The Act has the provision of specifying the reference date mentioned in the construction
contract. The claimant is entitled to claim payment for all works undertaken and to
which the Act relates. It is essential that in the payment claim the claimant must clearly
state the correct and applicable reference date so as to make the claim valid3.
CASE STUDY:
In this case study, a Contract Document executed between Mick Morton on behalf of
Schmicko’s Pty Ltd and Jordie Jones of Jordie’s café Pty Ltd specifying the works to be
undertaken by the claimant and the finishing date was specified as 1 December.
Payment schedule was fixed at 1st day of the month.
Identification of Works
It is essential that in the payment claim, a clear identification of the construction work
or the related goods and services be made to which the claim is related. This must
include the periods during which the claimant attended to the works, the location of the
works and the claim amount4.
CASE STUDY:
In his acknowledgement letter of 1 Oct 2016, Mick clarified that the work related to
refurbishment of Jordie’s café as per the plans given by the Architect Josh Jones (who is
incidentally brother of Jordie) at the address specified as 123 Bunda St, Canberra City
2 Unit Constructions Company Ltd vs Bullock (1959) 3 All ER 831. p 5
3 De Beers Consolidated Mine Ltd vs Howe [1906]. p 7
4 Cardens Case (1938) 63 CLR 108. p 8

ACT 2601. The total value of the work was agreed at $220,000, inclusive of GST of
$20,000.
CLAIMANT’S ARGUMENTS IN FAVOUR OF THE ADJUDICATION
A Brief of the Adjudicator
Australian Solution Services of Regus Miranda Level 1, 29 Kiora Road, Miranda
NSW 2228 has been in the Adjudication Field for more than a decade and has on its
panel, a small but highly qualified, team of adjudicators whose success is linked with
their expertise and professionalism gained over years of practice. Mr. Jon Facey
(Adjudication Manager) has been appointed as the Adjudicator in this case and he will
proceed ahead and give step-by-step explanation and guidance of the Adjudication
process, as detailed below, to the Claimant.
01. ACT Adjudication Factors: Adjudication Application
This an application made to an ANA selected by the Claimant and a copy is forwarded
to the Respondent.
CASE STUDY
Mick Morton, acting on behalf of the Claimant Schmicko’s Pty Ltd has appointed M/s.
Australian Solution Services of Regus Miranda Level 1, 29 Kiora Road, Miranda NSW
2228 as its Authorised Nominating Authority (ANA) in this matter. In order to further
the Adjudication Process, after Notice u/s 19(2) Division 4.2 of the Building &
Construction Industry Security of Payment Act (ACT), 2009 has been served to the
Respondent (Jordie’s Café Pty Ltd) by the Claimant (Schmicko’s Pty Ltd), the next step
for the Claimant is to move an Adjudication Application to the selected ANA, with a
copy being forwarded to the Respondent5.
Since the claimant has not received any payment from the Respondent and the
Respondent has denied any due payment is payable to the claimant in the Payment
Schedule sent by it, an application of adjudication, using the Adjudication Application
Form shown in ANNEXURE-01 in the attached FOLDER, has been filed with
Australian Solution Services, the ANA.
5 Unit Constructions Company Ltd vs Bullock (1959) 3 All ER 831. p 5

02. ACT Adjudication Factors: The Payment Claim
This can be either of the Tax Invoice, the Progress Claim or the Final Claim which the
Claimant has provided to the Respondent.
CASE STUDY
In this case study, Mick Morton, acting as the claimant, has produced the Tax Invoice
dated 1 December 2016 (ANN-02) for a total amount of $77,000.00 (inclusive of GST),
which was issued by him on behalf of his Sole Ownership entity named M/s.
Schmicko’s Pty Ltd to the Respondent Jordie Jones on behalf of his Sole Ownership
entity named M/s. Jordie’s Café.
03. ACT Adjudication Factors: Right to Progress Payment
Section-10 in Division-3 of Building and Construction Industry (Security of
Payment) Act, 2009 (ACT): Right to Progress Payments states that, and I Quote –
(1) “On and from each reference date under a construction contract, a person is
entitled to a payment (a progress payment) if the person has undertaken, under the
contract, to—
(a) carry out construction work;
or
(b) supply related goods and services.
(2) A progress payment may include—
(a) the final payment for construction work carried out, or for related goods and
services supplied, under a construction contract;
or
(b) a single or one-off payment for carrying out construction work, or for supplying
related goods and services, under a construction contract;
or
(c) a milestone payment”. Unquote.
ARGUMENT
I put in my argument pertaining to this section, which is as below –
A milestone payment, in context to this case study refers to an amount which is due for
payment on an event or date.

The reference date, in the context of the construction contract entered into by the
parties in this case study, refers to 1st day of the month, which is the date stated in the
contract and for all practical purposes is the date on which the Claimant is required to
file his claim for a progress payment in relation to the work carried out under the
contract. The first invoice (Annexure-02) was duly raised on 1 December 2016 for a
progress payment amount of $77,000 (inclusive of GST of $7,000) and delivered the
same day to the Respondent at the Respondent’s given address, 123 Bunda St, Canberra
City ACT 2601.
04. ACT Adjudication Factors: Amount of Progress Payment
Section-11 in Division-3 of Building and Construction Industry (Security of
Payment) Act, 2009 (ACT): Amount of Progress Payments states that, and I Quote –
“The amount of a progress payment to which a person is entitled in relation to a
construction contract is—
(a) the amount worked out under the contract; or
(b) if the contract does not provide for an amount, the amount worked out on the
basis of the value of—
i. construction work carried out or undertaken to be carried out by the
person under the contract; or
ii. related goods and services supplied or undertaken to be supplied by the
person under the contract”. Unquote.
ARGUMENT
The law is clear on the matter and the Invoice submitted by the Claimant is also in
order. The total contract amount agreed was $220,000 (inclusive of GST amount of
$20,000) and the Respondent did not even honour the first progress payment amount of
$77,000 (inclusive of GST of $7,000).
05. ACT Adjudication Factors: The Payment Schedule
This refers to the response which is given by the Respondent to the payment claim
which has been furnished by the Claimant.
CASE STUDY
In this case study, this is the email (ANN-03) sent by Jordie Jones, on behalf of the
Respondent M/s. Jordie’s Café, on 15 December 2016 to Mick Morton on behalf of the

Claimant M/s. Schmicko’s Pty Ltd, wherein the Respondent clearly denied any
outstanding amounts were due to be paid to the Claimant on account of the works
undertaken and completed at the specified work site.
06. ACT Adjudication Factors: Payment Schedule Received
Section-16 in Division-4.1 of Building and Construction Industry (Security of
Payment) Act, 2009 (ACT): Amount of Progress Payments states that, and I Quote –
(1) ”A respondent who is given a payment claim may reply to the claim by giving a
schedule of proposed payment (a payment schedule) to the claimant.
(2) A payment schedule must –
(a) identify the payment claim to which it relates; and
(b) state the amount of the payment, if any, that the respondent proposes to make
(the scheduled amount).
(3) If the scheduled amount is less than the claimed amount, schedule must indicate –
(a) why the scheduled amount is less; and
(b) if the scheduled amount is less because the respondent is withholding payment
for any reason—the respondent's reasons for withholding payment.
(4) The respondent becomes liable to pay the claimed amount to the claimant on the
due date for the progress payment to which the payment claim relates if –
(a) the claimant gives a payment claim to the respondent; and
(b) the respondent does not provide a payment schedule to the claimant within the
earlier of –
i. the time required by the relevant construction contract; or
ii. 10 business days after the payment claim is given to the respondent.
Unquote.
ARGUMENT
The payment schedule referred by the Respondent is not based on the facts of the case.
The Claimant was not instrumental in the designing of the whole project, which was
conceptualised by the Respondent (Jordie Jones) himself. The delay was because of the
following three reasons –
1. The faulty designs made by Josh Jones (brother of the Respondent) which led to
change in the working schedule of the Claimant.

2. The grease trap problem was to be addressed by the building maintenance and it
took long for them to rectify.
3. The onset of Christmas led to shortage of workers at the site and timely remedies
not being provided added to rescheduling of the whole project.
06. ACT Adjudication Factors: Due Date For Payment
Section-13 in Division-3.0 of Building and Construction Industry (Security of
Payment) Act, 2009 (ACT): for Due Date for Progress Payment states that, and I
Quote –
(1) “A progress payment under a construction contract6 is payable –
(a) on the day when the payment becomes payable under the contract; or
(b) if the contract does not set a day—10 business days after a payment claim is
made under part 4 in relation to the payment.
(2) Interest is payable on the unpaid amount of a progress payment that is payable
under subsection (1) at the greater of the following:
(a) the rate of interest applying from time to time under the Court Procedures
Rules 2006, schedule 2, part 2.2 (Interest after judgment);
(b) the rate stated under the construction contract.
(3) If a progress payment is payable under subsection (1), the claimant is entitled to
exercise a lien in relation to the unpaid amount over any unfixed plant or materials
supplied by the claimant for use in connection with carrying out construction work
for the respondent.
Note 1 Claimant—see s 15.
Note 2 Respondent—see s 15.
(4) Any lien or charge over the unfixed plant or materials existing before the date on
which the progress payment becomes payable takes priority over a lien under
subsection (3).
(5) Subsection (3) does not create any right against a third party who is the owner of
the unfixed plant or materials”. Unquote.
ARGUMENT
In the contract document, it has been mentioned that the progress payments shall be
effective on 1 Day of each Month for which the work is in progress. The first progress
6 Refer to ANN-04 in the attached folder

payment fell due on 1 December 2016 and the Invoice was duly presented to the
Respondent on that date.
07. ACT Adjudication Factors: Section 19(2) Notice
This is a notice prescribed under section 19 (1) Division 4.2 of the Building and
Construction Industry (Security of Payment) Act (ACT), 2009 (see ANN-06 in the
attached folder) which is being provided by the Claimant to the Respondent, in case the
Respondent does not provided a payment schedule to the Claimant.
CASE STUDY
In the case study, Jordie Jones, acting on behalf of the Respondent Jordie’s Café
completely refused to acknowledge the work carried on at the specified work site by the
Claimant Schmicko’s Pty Ltd. Hence, Mick Morton, the Sole Owner of the Claimant
Firm Schmicko’s Pty Ltd as has issued this notice under section 19(2)7 Division 4.2 of
the Building & Construction Industry Security of Payment Act (ACT), 2009.
08. ACT Adjudication Factors: Adjudication Response
This is the response to the above noted Adjudication Application, a copy of which had
been sent to the Respondent, and contains the clarification stated by the Respondent to
the ANA, with a copy marked to the Claimant.
CASE STUDY
A copy of the Adjudication Response received from the Respondent is attached in the
Appendix as ANNEXURE-3.
ARGUMENT
The Respondent did not reply in a regular manner to the Adjudication Application. His
response was casually given through an email sent to the Claimant. Instead of
acknowledging the factors responsible for the delay in the completion of the project, the
Respondent in fact tried to pass over all the blame on the Claimant. Moreover, the
Respondent blamed the Claimant for the three most important reasons of the delay,
namely:
1. The first reason for the delay in the completion of the project were the faulty
designs prepared by Josh Jones. The Respondent did not even consult the
7 Refer to ANN-06 in the attached folder

Claimant before finalising them nor did he allowed the Claimant any time to
conduct a feasibility study of the designs.
2. The second reason for the delay was the inordinate delay in deciding about the
Grease Trap. It was not the Claimants fault as the Building Maintenance took
time in fixing the issue.
3. Since the capacity of the Grease Trap could not be increased, the Claimant was
asked by the Respondent to adjust the partitioning of the toilets and this was
again not the fault of the Claimant.
09. ACT Adjudication Factors: Judicial Review
Section-43 in Division 6.0 of Building and Construction Industry (Security of
Payment) Act, 2009 (ACT): for Judicial Review of the Adjudication Decision states
that, and I Quote –
“43. Judicial review of adjudication decision
(1) Except as provided for in this part, a court does not have jurisdiction to set
aside or remit an adjudication decision on the ground of error of fact or law
on the face of the decision.
(2) An appeal may be made to the Supreme Court on any question of law arising
out of an adjudication decision.
(3) An appeal under subsection (2) may be brought by any of the parties to an
adjudication decision—
i. with the consent of the parties to the decision; or
ii. with the leave of the Supreme Court.
(4) The Supreme Court must not grant leave under subsection (3) (b) unless it
considers that –
a) having regard to all the circumstances, the determination of the question
of law concerned could substantially affect the rights of 1 or more parties
to the adjudication decision; and
b) there is—
i. a manifest error of law on the face of the adjudication decision; or
ii. strong evidence that the adjudicator made an error of law and that
the determination of the question may add, or may be likely to add,
substantially to the certainty of the law.

(5) The Supreme Court may make any leave which it grants under subsection (3)
subject to the applicant complying with any conditions it considers appropriate.
(6) On the determination of an appeal under subsection (2) the Supreme Court may
by order—
a) confirm, amend or set aside the adjudication decision; or
b) remit the adjudication decision, together with the Supreme Court’s opinion
on the question of law which was the subject of the appeal, to –
i. the adjudicator for reconsideration; or
ii. if a new adjudicator is appointed by the Supreme Court— to that
adjudicator for consideration.
c) If an adjudication decision is remitted under subsection (6) (b) the
adjudicator must make the new adjudication decision –
a. within 10 business days after the day the decision was remitted; or
b. within the time directed by the Supreme Court.
(7) If the adjudication decision of an adjudicator is amended on an appeal under
subsection (2), the adjudication decision as amended has effect as if it were the
adjudication decision of the adjudicator”. Unquote.
10.ACT Adjudication Factors: Adjudication Certificate
In case the Respondent chooses to make an appeal against the Adjudication Order to a
court of law, the Claimant will get an Adjudication Certificate, which shall be a sealed
document, produced by the Adjudicator on behalf of Australian Solution Services (the
ANA), at the written request of the Claimant. This sealed document shall be produced in
the court by the Claimant.