The Adjudicator's Determination

An adjudicator’s decision on the disputed matters is called a determination.

An adjudicator must determine whether or not any of the parties to a construction contract are liable (or will be liable if certain conditions are met) to make a payment under that contract and any questions in dispute about the rights and obligations of the parties under that contract.

An adjudicator must determine the dispute within 20 working days after the time for service of the response, although this time may be extended by the adjudicator to 30 days or such other time as the parties may agree (s46(2)).

The adjudicator’s determination is binding on the parties unless or until the dispute is finally determined by arbitration or by court proceedings or resolved by agreement or mediation after the dispute is determined by the adjudicator.

If a party against whom an adjudicator’s determination is made fails to comply with the adjudicator’s determination, the party in whose favour the determination is made may recover from the party that is liable, in any court, the unpaid amount and actual and reasonable costs of recovery awarded by that court, suspend the construction work, or apply for the determination to be enforced by entry as a judgment in a District Court.

An adjudicator may, in certain circumstances, approve the issue of a charging order in respect of the construction site owned by a party to the construction contract against whom a claim is made in an adjudication or an associate of that person.

Adjudicator’s duties, powers, and procedural obligations in relation to determining a dispute are broad ranging and are set out in sections 41-50 of the Act. While it is beyond doubt that an adjudicator is under a duty to comply with the principles of natural justice and to abide by procedural fairness, that duty is tempered/qualified due to the procedural constraints inherent in the tight time limits that the Act imposes on the parties and the adjudicator, and the provisional nature of an adjudicator’s determination.

Unlike other conventional court or tribunal processes, there is no power for the adjudicator to administer an oath or convene a face to face hearing for the purpose of making oral submissions and taking and testing evidence.

In almost every case, the determination will be made solely on the documents submitted by the parties in the claim, and the response, the reply and the rejoinder, if any.

While adjudicators have the powers to convene conferences and carry out inspections of construction work or other things to which the dispute relates, in practice these powers are seldom ever used (adjudicator have used these powers in less than 0.4% of all cases to date) or in fact required.

If a conference is convened by the adjudicator, it will be for the express purpose of allowing the adjudicator to clarify matters that may have arisen out of the claim and the response.  It will be for the adjudicator to put questions of clarification to the parties (not to allow the parties or their representatives to engage in any form of examination) although in doing so, obviously the principles of fairness and natural justice must be applied and upheld.

The parties may be represented at adjudication proceedings/conferences subject to the adjudicator’s power to direct the number of representatives present at a conference to allow for the efficient conduct of proceedings (s67).

In determining a dispute, an adjudicator must only take into account the matters referred to in section 45(a) to (f) of the Act and may take into account any matters that the adjudicator reasonably considers relevant (s45(g)).

The earliest that an adjudicator may make a determination is the end of the period within which the respondent may serve a written response to an adjudication claim referred to in section 37(1), namely five working days after receipt of the adjudication claim, or any further time allowed by the adjudicator or agreed by the parties. The adjudicator must not have regard to a response unless it was served on the adjudicator within that period (s46(1)).

The adjudicator’s determination must be in writing and contain the reasons for the determination (unless the parties agree in writing that reasons may be dispensed with) in the prescribed form, namely Form 3, Sch.1 to the Regulations (s47(1)) and it must be dated.

Within two working days after the date on which a copy of the adjudicator’s determination is given to the parties, an adjudicator may, on his or her own initiative, correct in the determination any errors in computation or any clerical or typographical errors of a similar nature (s47(3)).

The provision is akin to the 'slip rule' enabling courts and arbitrators to correct errors in judgments and awards as a result of a slip or accidental omission. It is clear that the provision may only be used where there is a clerical or arithmetical error viz. a mechanical error, and may not be used to vary the determination in a substantive way, even if the error is plain on the face of the determination.

In practice, it will be a party that seeks correction of a purported ‘error’ by making a formal application to the adjudicator, copied to every other party, rather than the adjudicator acting strictly on his or her own initiative. Arguably the exercise of ‘initiative’ arises from receipt of the request for correction alerting the adjudicator to a possible error.

There is no power to extend the time for making a correction. Therefore, a party receiving an adjudicator’s determination must promptly check for any errors and request the adjudicator to make a correction as soon as possible so as to allow the adjudicator time to consider the application, review the determination and make any correction required within the two day window.

In a monetary claim, an adjudicator must determine whether or not any of the parties are liable, or will be liable if certain conditions are met, to make a payment under the contract (s48(1)(a)) and any questions in dispute about the rights and obligations of the parties under that contract (s48(1)(b)). If an adjudicator determines that a party to the adjudication is liable, or will be liable if certain conditions are met, to make payment, the adjudicator must also determine the amount conditionally payable and the date upon which that amount becomes payable and may determine that the liability to make payment is dependent on certain conditions being met (s48(3)).

Under section 59 of the Act, payment of any amount determined by the adjudicator to be paid to a party must be paid within two working days after the date on which a copy of the adjudicator’s determination is given to the parties, unless the adjudicator determines a later date for payment.

In non-monetary claims, an adjudicator must determine the rights and obligations of the parties under the contract.
 

An Authorised Nominating Authority
under section 65 of the Construction Contracts Act 2002