BuildLaw: In Brief 03.07.2009

Review of Adjudicator's Determination


The recent case of Spark It Up Ltd v Dimac Contractors & James Cornish highlights the importance of the jurisdiction of an adjudicator.  In this case, Spark It Up commenced judicial review proceedings against the decision of Mr Cornish on the basis that it was invalid for want of jurisdiction, was in breach of the principles of natural justice, did not take into account a relevant consideration and was unreasonable.
 
The relevant facts are that Dimac commenced an adjudication seeking a determination that payment was due of 2 outstanding invoices.  It transpired during the course of the adjudication that Dimac had referred to the wrong invoices in its determination and, at the request of the adjudicator, filed a corrected claim.  No opportunity was provided to Spark It Up to file a Response to this claim.
 
The Court agreed that the adjudicator acted in excess of his jurisdiction and that, in failing to provide a proper opportunity for Spark It Up to respond to the corrected claim was a breach of natural justice. For these and other reasons, the Court quashed the determination of Mr Cornish and the subsequent award was set aside.

Arbitration: Appeals on a Question of Law


In the High Court case of Goodacre v Pacific Abode Homes Ltd, leave was sought to appeal the award of the arbitrator pursuant to which Goodacre had been directed to pay Pacific Abode Homes the sum of $122,000. The dispute arose out of building work carried out by respondent pursuant to a labour only contract.  During the course of the contract the parties had a falling-out over the respondent's claim for payment and the scope of the contract works.  The contract was terminated by agreement and other contractors were engaged to complete the building work.
 
The applicant applied for leave to appeal on a question of law, particularly on the interpretation of the contract including the terms of the contract and the scope of the respondent's obligations.
 
The Court considered the principles regarding appeals on a question of law and then went on to comment that the arbitrator is a person of considerable experience and that he was appointed by agreement of the parties because of that expertise.
 
The Court then concluded that the errors of law alleged by the applicants fell well short of the standard required for grant of leave.  They failed to satisfy the onus on them to establish that they have a strongly arguable case that the arbitrator made an error of law in this case.  Justice Venning then went on to say that, on his interpretation of the facts, the arbitrator interpreted the contract correctly.  The application for leave to appeal was dismissed and costs were granted on a 2B basis.

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