Builtcom Constructions Pty Ltd v VSD Investments Pty Ltd as trustee for The VSD Investments Trust (No 2)

1. [1]

   LEEMING JA: I have had the advantage of reading the reasons for judgment of Adamson JA in draft. However, I would dismiss the appeal, for reasons which may be summarised as follows.

   1. (1)

      The adjudicator applied a rule derived from John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258, and in treating his determination as subject to that rule, he committed error of law, substantially as alleged in ground 2. However, mere error of law is not sufficient.

   2. (2)

      Contrary to ground 1, there was no jurisdictional error in the adjudicator’s determination that submissions were not “duly made”, and the contention that review is independently available on the basis of a “subjective jurisdictional fact” is wrong.

   3. (3)

      Ground 3 does not arise, and serves to distract from the only issue in this Court, which is whether or not a determination is affected by jurisdictional error. However, generally speaking, if an adjudicator is wrong in determining whether a submission is duly made, that will not without more invalidate the determination for jurisdictional error.

   4. (4)

      The primary judge did not need to determine, and did not finally determine even in the alternative, the question of remitter, and in the absence of a notice of contention, ground 4 does not arise.

Background

1. [2]

   The construction contract giving rise to this litigation was based on the 2005 amendment to AS 4916-2002. It bound the appellant Builtcom as Construction Manager and the first respondent VSD as Principal. It provided for progress claims, including a final payment following termination for convenience for, inter alia “the cost of materials and equipment reasonably ordered by the Construction Manager for the project and which the Construction Manager is liable to accept, but only if they will become the Principal’s property upon payment”: cl 28.2(c). Any such claim was to be made within 28 days of receiving notice of termination and was required to comply with the provisions for other progress claims. One of those provisions (cl 25.1(g)) was for claims to include, “on an open book basis”, “certified copies of all relevant documents to substantiate the value being claimed by it for each item of works within a trade package or Construction Manager’s trade works in excess of $25,000.00 excluding GST in the progress claim (including time sheets, invoices, remittance advices, dockets, confirmations of orders, and photographs)”. The claim was expressly subject to VSD’s entitlement to set-off.

2. [3]

   The contract was terminated for convenience on 25 October 2024. On 22 November 2024, Builtcom made a payment claim, seeking $30,625,050.75. The claim was a two page letter attaching 9 pages of tables and the supporting statement required by s 13(7) that all subcontractors had been paid.

3. [4]

   Builtcom’s payment claim included a claim for $3.65 million for Tower Crane 2. That item, and three others (identified as “Pulzmeister”, “Tower Boom” and “Manitou”) were mentioned on p 2 of the claim as “Equipment” which Builtcom had reasonably ordered and which it was entitled to recover under cl 28.2(c). Otherwise, the claim for $3.65 million was merely a line item on one of the tables attached to the letter.

4. [5]

   VSD’s payment schedule was served on 4 December 2024. It was in a negative amount. VSD singled out the claim based on Tower Crane 2 for special complaint, saying it did not understand whether “Builtcom is claiming for the cost it has incurred in purchasing a tower crane or if Builtcom says that VSD is purchasing the tower crane”. It added:

5. [6]

   VSD provided a spreadsheet of 59 pages responding to line items in the payment claim. The document included six reasons for rejecting the entirety of the claim for Tower Crane 2, including:

6. [7]

   VSD also said there was a breach of the Act, and breaches of various clauses in the contract, including:

7. [8]

   Builtcom’s application for adjudication was lodged on 17 December 2024. It reduced its claim by some $8 million, although the entirety of the $3.65 million for Tower Crane 2 was maintained. It was accompanied by 802 paragraphs occupying 171 pages of submissions. It was also accompanied by an expert report by Mr Elsom, a quantity surveyor, and hundreds of pages of supporting documents.

8. [9]

   Builtcom’s submissions emphasised that VSD was confined by s 20(2B) only to reasons for withholding payment which had been included in the payment schedule.

9. [10]

   Paragraphs 124-129 developed the claim for Tower Claim 2, as follows:

10. [11]

    The submission was supported by two tax invoices and an “Asset Sales Agreement”, all involving Titan Cranes and Rigging Pty Ltd. The expert opinion was that the claim fell within cl 28.2, although its weight was affected by the fact that the expert, Mr Elsom, had been instructed to assume that each of the four pieces of equipment claimed under cl 28.2(c) (including Tower Crane 2) fell within the definition of “materials and equipment” and that title would be transferred to VSD on payment.

11. [12]

    In response, VSD said:

12. [13]

    VSD then submitted that:

    1. (1)

       the Crane was not “materials” or “equipment” which were reasonably ordered which VSD was obliged to accept and purchase but were instead “Construction plant” (ie “appliances and things used in the carrying out of the Services but not forming part of the project”);

    2. (2)

       Builtcom had claimed for the hire of the same items of Construction Plant it now sought that VSD purchase in its Payment Claim;

    3. (3)

       The Construction Plant was to be hired under the Contract, not purchased, with the costs of hiring the plant included in Builtcom’s monthly progress payments for “Preliminaries”;

    4. (4)

       “VSD is therefore at a loss as to why Builtcom is now claiming for the costs of purchasing the Construction Plant given (a) the Construction Plant was to be hired by reference to the Contract; and (b) Builtcom has in fact claimed for the hiring of the Construction Plant in its Payment Claim …”, giving as one of its examples item 1.0313 of the claim, being am amount for the hire of the Manitou forklift.

13. [14]

    VSD’s response commented on the claim for Tower Crane 2, including as follows:

14. [15]

    VSD’s response also observed that no remittances for the $3.65 million had been provided, nor a copy of the crane’s registration with SafeWork NSW, nor a certificate of ownership.

15. [16]

    VSD also retained an expert, Mr Timothy Haynes, who produced a report which he said complied with the expert witness Code of Conduct. He disagreed with Mr Elsom. His disagreement was expressed to be based on the absence of remittances, the fact that Tower Crane 2 was in the contract a “Hire” item, the fact that the drawdown schedule did not mention a drawdown of crane purchase costs, and the absence of evidence of title.

The balance of these reasons

1. [17]

   The main issue in this appeal is whether part of the adjudicator’s determination discloses jurisdictional error. An identical issue arose before the primary judge, who concluded that it did not. If her Honour’s conclusion is correct, the appeal must be dismissed.

2. [18]

   The most efficient course is to address the grounds of appeal in a slightly different order from the notice of appeal, and deal simultaneously with the aspects of the determination and the reasons of the primary judge. Before doing so, three points should be noted.

3. [19]

   The first is that both parties litigated the essential issue arising from the disparity between the material accompanying the payment claim and that accompanying the adjudication application by reference to the claim of $3.65 million for Tower Crane 2. It was said without objection that:

4. [20]

   So far as I can see, that was a sensible approach for the parties to take. For example, the largest single item in the payment claim was a claim for $6,555,701.57 described as “Formcom Formwork Break Costs – Clause 28.2(e)”. No details beyond that line item in a spreadsheet were provided in the payment claim. In the adjudication application, that claim was reduced to $2,505,104.73 (see item 26 in paragraph 89 of the adjudicator’s determination) and was supported by slightly more than 3 pages of submissions (pages 50-53 of the adjudication application). It was rejected in its entirety by the adjudicator at paragraphs 125-126, in language materially identical to the language rejecting the claim for Tower Crane 2 based on the Cardno test.

5. [21]

   Similarly, paragraphs 107-109, 118-120, 132-134, 230-232 and 238-241 deal in essentially the same terms with numerous other aspects of Builtcom’s claim.

6. [22]

   These reasons proceed on the same basis, although I bear in mind that the parties’ sensible, selective approach tends to conceal the magnitude of the task performed by the adjudicator.

7. [23]

   The second is that these reasons adopt the approach shared by the parties and put to one side the changes (some of which may be quite subtle) effected by s 32A. That section seems to proceed on the basis that a single certificate in a particular amount of dollars is to be treated divisibly so that components may, or alternatively may not, disclose jurisdictional error. That section may introduce some complexity into, amongst other things, questions of discretionary refusal of relief. These reasons should not be understood as bearing upon those issues.

8. [24]

   During the hearing there were exchanges with each side concerning the impact of s 13 of the Act upon cl 25.1, including as to what is meant by a contractual clause being “void”. Mr Hume supplied a reference to A-Civil Aust Pty Ltd v Meso Solutions Pty Ltd [2023] NSWSC 372 at [85] where the conclusion that such a provision is void is expressed. The question is important and, in my respectful opinion, potentially more complex than the submissions received in this appeal where the issue does not arise. I prefer to reserve consideration of that question to a case where it is fully argued and the answer matters.

9. [25]

   The relevant statutory provisions have been reproduced by Adamson JA. I shall not repeat them in these reasons.

Ground 2: The adjudicator’s determination and the application of the “Cardno test”

1. [26]

   The adjudicator sought and obtained two extensions of time, beyond the ten working days for which the Act provided commencing on 24 December 2024. It is to be borne in mind that the adjudicator had 157 disputed items and 37 claims of set-off, many hundreds of pages of single-spaced submissions, and thousands of pages of supporting documents including two expert reports and one statutory declaration each expressing divergent views on the majority of disputed items, to resolve a claim in excess of $20,000,000. Section 21(3) required him to make the determination as expeditiously as possible and in any event within ten business days (unless the parties agreed to an extension). The ten day period applies to the adjudication of all payment claims, large and small, and irrespective of the number of issues raised.

2. [27]

   The determination, which is of 340 paragraphs plus annexures, was issued on 3 February 2025. Much is formulaic and repetitive, but that reflects the character of both sides’ submissions on many dozens of claimed items. The adjudicator cannot fairly be criticised for departing from the promptness required by the statute.

3. [28]

   The determination was in the amount of $8,467,232.13. The adjudicator rejected many of Builtcom’s claims on the basis of what he called “the Cardno test”, based on John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258. The issue raised by ground 2 of this appeal is whether the adjudicator (a) inflexibly applied a strict rule, said to be derived from Cardno, or instead (b) deployed, as a rough heuristic in order to avoid a breach of procedural fairness, a test derived from Cardno.

4. [29]

   The primary judge said that what the adjudicator did was to apply the “scope and ambit test”. Her Honour said at [42]-[44]:

5. [30]

   Her Honour then observed that the scope and ambit test was merely a heuristic to ensure that the respondent was afforded natural justice: at [47]. Her Honour consequently said that there was no occasion to consider whether any “strict Cardno test” was “plainly wrong”: at [48].

6. [31]

   I think that was an overly generous reading of the adjudicator’s reasons by the primary judge. In this respect I agree with the conclusion reached by Adamson JA.

7. [32]

   The adjudicator’s reasons, read fairly and as a whole, suggest that in rationalising Ceerose v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215 and Cardno (he considered that “these two decisions co-exist”), while he was “required to determine the Claimant’s entitlement within the framework of the dispute that was propounded by the parties”, that would be done by applying “the Cardno test”. He proceeded on the basis that if there were a new document which was supplied for the first time with the adjudication application, then he had to ask whether the presence of that document in the original payment claim would have changed the valuation or reasoning in the payment schedule, and if so the new document was to be ignored. For example, he said, referring to the four claims under cl 28.2(c) including Tower Crane 2:

8. [33]

   The adjudicator’s reasons proceed on the basis that the application of the Cardno test was determinative. No other reasons for treating these claims as of nil value was given. I am conscious that the expressed reasons may be imperfectly drafted, and may not be the whole of the reasons. However, there is nothing to suggest that the adjudicator separately, after applying a heuristic or rule of thumb, then gave separate discretionary consideration to whether he should regard the relevant part of Builtcom’s claim as duly made.

9. [34]

   The adjudicator was entitled and obliged to proceed quickly and robustly. But there was no rigid, black-and-white rule that precluded his having regard to parts of Builtcom’s materials in the way he said bound him. Instead, it was necessary for him to determine whether parts of the parties’ submissions were “duly made”, and it was necessary for the process to be procedurally fair.

10. [35]

    On the approach taken by the primary judge, her Honour did not need to determine whether there was a “strict Cardno test” and if so whether it was plainly wrong, such that notwithstanding considerations of comity it ought not be followed: at [48].

11. [36]

    In one sense the same is true in this Court, insofar as this ground falls short of alleging a failure to find jurisdictional error. I repeat (because it warrants repetition) that only if the adjudicator’s determination (or part of it) is affected by jurisdictional error, can Builtcom’s appeal be allowed. Nonetheless, I shall address this non-dispositive ground on its own terms.

12. [37]

    I respectfully agree with Adamson JA that there is no test that requires an adjudicator to ask whether if a document had been included in a payment claim, the response of the other party would be different, and if so that document is to be disregarded. My reasons are as follows.

13. [38]

    First, it is difficult to discern any such rule from the reasons in Cardno itself. Perhaps the closest is a statement about the adjudicator’s power in [24]:

14. [39]

    That falls short of the “test” applied by the adjudicator.

15. [40]

    Secondly, there are difficulties with a rule formulated in terms of a likelihood that, in the counterfactual scenario that a document had been supplied with a payment claim, the respondent would have changed its valuation or reasoning. That may be highly contestable in any particular case. In one sense, if the respondent adopts a comprehensive approach, addressing every aspect of a payment claim, then every new document will affect its submissions in response. But that cannot be what the adjudicator meant when formulating the test. However, once some threshold test of materiality is inserted into the rule, it may readily be seen how unpredictable its application may be.

16. [41]

    Thirdly, any such inflexible rule would be inconsistent with the adjudicator’s power to request further submissions on a particular point. By way of example, there might be a finely balanced dispute as to whether more information on an important aspect of the claim should have been provided in the payment claim, or a real issue about whether proceeding on the basis of the adjudication application and the response would be procedurally fair. (Indeed, in the present case, if the adjudicator had acceded to VSD’s submission that the “Asset Sales Agreement” was a “doctored document” and the amount of $3.65 million was “falsely claimed”, it is difficult to avoid the conclusion that it would have been procedurally unfair, for the submission was an invitation to find fraud, as to which Builtcom had not been heard.) One course which is open to an adjudicator, rather than rejecting that aspect of the claim entirely if it is considered that it is outside the scope of the dispute, is to give either or both sides a further opportunity to supply submissions and materials on that point pursuant to s 21(4). This is antithetical to the existence of an inflexible rule.

17. [42]

    Fourthly, s 17(3)(h) of the Act, when read with s 22(2)(c), makes clear that when it comes to an adjudication application the claimant’s entitlement to include “such submissions relevant to the application as the claimant chooses to include” extends to include “relevant documentation”.

18. [43]

    I conclude that there is no rule that prohibits an adjudicator having regard to material not supplied with a payment claim merely on the basis that the material would have (or to be precise if the adjudicator is of the opinion that it would have) altered the payment schedule. If Cardno is thought to stand for the proposition that that is what adjudicators must do, that proposition is not the law.

19. [44]

    To anticipate what follows, that conclusion does not mean that the adjudicator’s legal error amounts to jurisdictional error. Two points are worth making immediately.

20. [45]

    First, the adjudicator’s obligation is to determine the payment claim. In order to do so, the adjudicator must determine the scope and nature of the payment claim: see Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [66], or, as it was put by Giles JA writing for this Court in Downer Construction (Australia) Pty Ltd v Energy Australia (2007) 69 NSWLR 72; [2007] NSWCA 49 at [82], the “parameters” of the payment claim. If the matters sought to be put before the adjudicator give rise to substantial new issues, which could not have been anticipated prior to the adjudication application, then that may indicate that the moving party is seeking to have something which is outside the scope and ambit of its payment claim adjudicated.

21. [46]

    Secondly, it is to be borne steadily in mind that “determination of the parameters of the payment claim is a matter for the adjudicator, and a reasonable but erroneous decision by the adjudicator does not invalidate the determination”: Downer Construction (Australia) Pty Ltd v Energy Australia at [87]. Further, part and parcel of the role of adjudicators is the resolution of disputes arising within the process as to whether submissions have been duly made. This part of the adjudicator’s role is ordinarily well within his or her authority – which is to say that even if he or she gets it wrong, the error will not without more be jurisdictional.

Grounds 1 and 3: the need to establish jurisdictional error and its consequences

1. [47]

   Those seeking to challenge the determinations of adjudicators must bear steadily in mind that merely establishing legal error is not enough. That is so even if as here the determination will entitle one party to a construction contract to enforce, as if it were a judgment debt, a determination worth many millions of dollars and even if the practical reality is that there will not in the near future, and may never, be a judgment by a court on the contractual dispute.

2. [48]

   Indeed, it is inevitable, and entirely forgivable, that the adjudicator who need not be legally qualified and who often needs to rule on dozens or hundreds of individual disputed items, without the benefit of an oral hearing and often without the benefit of any discipline in the length of submissions or the volume of material provided, in ten business days, will make material mistakes. This is an obvious consequence of the regime. As the High Court said in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4, material mistakes, whether of fact or law, do not without more lead to the determination being set aside, for that would undercut the mechanism for a swift extra-curial means of securing cashflow.

3. [49]

   Another reason why such errors, even if they are material, do not invalidate the determination, is that the “determination” actually determines nothing finally. True it is that for some purposes a determination may be treated as if it were a judgment, but if payments are made by the party against which the determination has been made, “[t]he payments themselves are only payments on account of a liability that will be finally determined otherwise”: Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 at [51]. The entirety of Part 3 of the Act has no effect upon civil proceedings arising under a construction contract, except insofar as allowance must be made for the payments made pursuant to the expedited and non-curial procedures contained within it: see s 32(2) and (3) and Style Timber Floor Pty Ltd v Krivosudsky (2019) 100 NSWLR 133; [2019] NSWCA 171 at [41]. An important aspect of the High Court’s reasoning that jurisdiction to review for error of law on the face of the record was ousted was the following passage in Probuild at [37]-[38]:

4. [50]

   In short, nothing in an adjudicator’s determination stands in the way of an authoritative determination of the contractual dispute by a court.

5. [51]

   As noted above, the adjudicator considered that the submissions in support of the claim for $3.65 million based on Tower Crane 2 fell foul of “the Cardno test”, with the result that he attributed nil value to that claim.

6. [52]

   The primary judge observed at [51] that even if the adjudicator applied the wrong legal test when determining whether Builtcom’s contested submissions were “duly made”, this was not a jurisdictional error. Her Honour addressed submissions which appear to have been broader than those propounded by Builtcom in this Court (as well as a separate case for jurisdictional error advanced by VSD, which her Honour dismissed and from which no appeal has been brought).

7. [53]

   In this Court, Builtcom acknowledged that mere legal error in applying “the Cardno test” was insufficient, and that it was necessary for it to establish jurisdictional error. Those concessions were properly made.

8. [54]

   Grounds 1 and 3 of Builtcom’s appeal were as follows:

9. [55]

   Builtcom needed to challenge [24]-[26] of the reasons of the primary judge, because her Honour regarded those paragraphs as dispositive. After a summary of authority to the effect that whether a submission is “duly made” is an issue for the adjudicator to determine, her Honour said at [23]-[26]:

10. [56]

    Builtcom’s submissions in support of ground 1 contained two main strands. One was directed to the fact that the conclusion of jurisdictional error ultimately turned on a question of statutory construction. The other was directed to reconciling the authorities relied on by the primary judge (to the effect that whether a submission was “duly made” was generally a matter for the adjudicator, such that any error was not jurisdictional) with a “distinct strand of authority” based on attacking the opinion of the adjudicator as a “subjective jurisdictional fact”. I shall address them separately.

11. [57]

    Builtcom identified six reasons why the adjudicator’s error in rejecting its submissions based on the Cardno test, thereby departing from what the statute required when determining whether submissions had been “duly made”, was jurisdictional.

12. [58]

    The first was the absence of a power to discern implied constraints in the Act. The second was that because adjudicators need not be legally trained, Parliament would not have expected construction of the Act to be within their expertise.

13. [59]

    Neither of those considerations is especially persuasive. Of course, adjudicators are bound by and have to apply the Act, no differently from thousands of public servants and others involved in the modern administrative state. It is with respect unreal to conclude that any error of law in applying the Act is one that is regarded as jurisdictional, with the effect that the purported determination on an interim basis of the amount of a progress payment is void.

14. [60]

    The approach taken by courts in the large volume of decisions generated by the Act is much more nuanced. It has also been restrained. In EnerMech Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (2024) 115 NSWLR 56; [2024] NSWCA 162 at [9], Basten AJA said:

15. [61]

    Some parts of the Act are regarded as being jurisdictional, including whether there was a payment claim and whether it was served on the other party. Other parts are not jurisdictional. This was the distinction to which Hodgson JA referred in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 at [55]. Generally speaking whether a submission is “duly made” is a matter for the adjudicator to determine and any error in doing so is unlikely to be jurisdictional. That was regarded as “well settled” by this Court in Ceerose at [31]. It was endorsed by this Court in Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305 at [23] and Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [65].

16. [62]

    Builtcom’s third reason was that the breach of the Act which it contended was jurisdictional was readily amenable to judicial enforcement. That consideration really says nothing about whether the error is a condition of jurisdiction, and is answered by what has already been said.

17. [63]

    Builtcom’s fourth and fifth reasons were based on legislative purpose, namely, a general view that it should be construed in subcontractors’ favour and that there would be inconvenient consequences if the adjudicator were free to disregard information. Once again, none of those considerations are especially probative on the ultimate issue. It is axiomatic that the statute’s beneficial purpose in providing a mechanism for those seeking payment does not mean that every contestable question of statutory construction – including the circumstances when a determination is affected by jurisdictional error – is to be resolved favouring the party seeking payment. The position is no different from the proposition that a purposive approach to a taxation act, which is intended to raise revenue, does not result in every contestable question of construction being resolved in favour of the government, as Gleeson CJ explained in Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [6]. In Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619; [2013] HCA 36 at [40] it was said, by reference to Carr, that:

18. [64]

    It also needs to be firmly borne in mind that under this statutory regime, adjudicators who will tend not to be legally qualified and will produce a determination in challenging circumstances are authorised to make legal errors.

19. [65]

    Further, the availability of review for jurisdictional error cuts both ways. In this case, slightly unusually, it is Builtcom which says it has been underpaid and asserts jurisdictional error. Probably more commonly it is the principal who claims jurisdictional error. But to the extent to which a determination is susceptible to challenge for jurisdictional error, the purpose of speedy interim determination of claims will be undercut.

20. [66]

    Builtcom’s sixth reason was that “[j]urisdictional error plays an important role in the Australian constitutional context”, marking the limits of what is reviewable and what can be unreviewable, reflecting basal conceptions of the rule of law. “If adjudicators were free to misconstrue their empowering statute, they would or could become such islands of power”, citing a familiar passage from Kirk v Industrial Court (NSW) (2010) 239 CLR 531; [2010] HCA 1 at [99]. This is unpersuasive. The undoubted importance of “jurisdictional error” within the Australian legal system does not speak to whether in any particular case an error of law by an adjudicator is to be regarded as jurisdictional. It is open to the Parliament to establish a speedy, interim method of determining payment claims in the building industry, on the basis that it operates in parallel with and does not affect curial determinations, with the consequence that it is in large measure unreviewable.

21. [67]

    Confronted by a deal of authority holding that whether or not a submission was duly made was not jurisdictional, Builtcom seized upon an anterior step, namely, the adjudicator’s opinion that a submission was duly made, and sought to challenge that opinion on the familiar lines identified in R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407; [1944] HCA 42.

22. [68]

    The side-stepping of authority was neatly illustrated by Builtcom’s submissions in chief:

23. [69]

    In its submission in reply Builtcom maintained:

24. [70]

    The opinion, so it was said, disclosed legal error through a rigid application of a rule derived from Cardno, and the result was that a deal of the application was not determined “on the merits”, to which was added that “an error of law going to an essential task” may be jurisdictional. Aspects of those propositions may be accepted (although I shall return to “the merits”), but it does not follow that the determination of Builtcom’s payment claim is invalidated for jurisdictional error. Builtcom’s argument, which attempts to outflank authority by the device of attacking the adjudicator’s opinion as to whether a submission was duly made, does not escape the established proposition that error in identifying a submission as having been “duly made” is not jurisdictional.

25. [71]

    There is no legal distinction between the determination that a submission is duly made and the adjudicator’s opinion that the submission is duly made. Authorities holding that the former generally does not give rise to jurisdictional error even if erroneous are not to be avoided by attention to the opinion of the adjudicator that a submission is not to be addressed, as opposed to the fact of the adjudicator’s determination not addressing the submission.

26. [72]

    Another way of making this point draws upon the circumstances in which the decisions relied on by Builtcom were based. A recurring issue of statutory construction turns on the nature of a precondition to an impugned exercise of power. The precondition may be a fact or it may be the decision-maker’s opinion. An example is whether the power exercised by the Australian Heritage Commission to enter land on the register of the national estate turned on whether the land satisfied the definition or whether the power turned on the Commission’s opinion, or, as the High Court put it, whether the power “depended on the Commission’s own view of the matter rather than the ‘objective’ ascertainment of a ‘jurisdictional fact’”: Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 at 304; [1997] HCA 10. If the precondition is a fact in the real world (as opposed to an opinion) and the exercise of power is only valid if the fact exists, then the fact is a “jurisdictional fact” and in proceedings for judicial review of the exercise of power evidence may be adduced (including evidence not before and perhaps not available to) the donee of the power in order to establish the non-existence of the fact. On the other hand, the precondition for the exercise of the power may instead be merely that the donee of the power has formed an opinion. Of course, whether or not the donee held a particular state of mind is, in a real sense, also a fact, and hence the language of “jurisdictional fact” may cause terminological confusion, as I sought to explain in El Khouri v Gemaveld Pty Ltd (2023) 256 LGERA 24; [2023] NSWCA 78 at [34]-[35]; this is what gives rise to the terminology of “subjective jurisdictional fact” invoked by Builtcom. That expression is far from ideal, not least for the reasons given by Windeyer J in Vallance v The Queen (1961) 108 CLR 56 at 83; [1961] HCA 42. But putting terminology to one side, where the validity of the exercise of power turns upon a donee’s opinion, then the exercise of power may be impugned by contending that the opinion which is the precondition to the valid exercise of power is not one which has been formed properly in law.

27. [73]

    There are many cases dealing with whether the validity of an exercise of public power turns upon a fact in the real world or alternatively the opinion of the donee, a question which is answered by a process of construction of the legislation conferring the power. Australian Heritage Commission v Mount Isa Mines Ltd is one; in this Court Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2004] NSWCA 422 is another. The nature of judicial review varies depending upon which category the power falls into. But it does not avail Builtcom to seek to deploy the concepts in those cases to the question whether a submission is “duly made” for the purposes of s 22. Section 22 is quite different from a power which is subject to a precondition which may be a fact in the real world or alternatively an opinion held by the donee of the power. Section 22 imposes an obligation upon adjudicators. Every adjudicator is required to determine whether submissions are duly made (if so, regard must be had to them; if not, regard may not be had to them). This is well removed from a power which turns either on a fact in the real world or an opinion, and it does not assist legal analysis to seek to take the language drawn from judgments on questions of statutory construction concerning the preconditions of statutory powers to this different area.

28. [74]

    That is sufficient to dispose of this submission. Nonetheless I shall engage with Builtcom’s submissions. Builtcom sought to rely upon “a distinct strand of authority” in support of the reviewability of an adjudicator’s opinion that a submission was not “duly made”. Builtcom referred to no recent decisions of this Court. That is significant because the proposition that an adjudicator could make a material error of law which fell short of jurisdictional error and was for that reason unreviewable by this Court is relatively new. It was confirmed by the decisions of this Court (constituted by five judges) and of the High Court in Probuild.

29. [75]

    Earlier decisions, including Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229, upon which Builtcom placed heavy reliance, must be deployed cautiously on this point, because it may have been common ground that review lay for error of law on the face of the record, and accordingly there was no occasion for the reasons to distinguish jurisdictional error from non-jurisdictional error.

30. [76]

    In Coordinated Construction, ground 9(b) of the notice of appeal (reproduced at [17]) was that the primary judge ought to have held that there was an error of law on the face of the record. There are two obstacles to Builtcom’s reliance on Basten JA’s statement at [47] that “[i]t does not follow that the formation of a relevant opinion by an adjudicator with respect to compliance with s 13(2) will in all circumstances be beyond review”. The first is that Basten JA was speaking of s 13, not s 17. The second is that the statement is not authority for, and cannot safely be relied on to support, a legal argument based on jurisdictional error, as opposed to error of law on the face of the record. Decisions are only authority for what they decide. The authorities were recently collected in David & Ros Carr Holdings Pty Ltd v Ritossa [2025] NSWCA 108 at [88], including the passage from an earlier decision of this Court which is apposite:

31. [77]

    Builtcom also sought to derive from what was said in John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19 at [57] the suggestion that “a decision would not be invalid if there was a ‘reasonable if erroneous decision that [submissions] were not duly made”. What Hodgson JA said was:

32. [78]

    Contrary to Builtcom’s submission, the characterisation of the error by the adjudicator concerning s 22(2) as “reasonable if erroneous” does not entail or imply that a decision on s 22(2) which is erroneous and unreasonable is affected by jurisdictional errors. It was unnecessary for Hodgson JA to express any view on the legal status of a determination affected by an unreasonable opinion. Moreover, even if that were not so, it is not to the point, because Builtcom does not contend that the adjudicator’s decision was legally unreasonable.

33. [79]

    Builtcom also invoked Basten JA’s reasons in the same appeal, saying:

34. [80]

    This passage does not assist Builtcom. Coordinated Construction does not assist; not only is it about s 13(2) rather than s 22(2), but it also does not address jurisdictional error as explained above. In John Holland, Basten JA regarded the first respondent as raising a number of false issues because of a false premise, which his Honour identified at [71]:

35. [81]

    In short, Builtcom’s submission based on “subjective jurisdictional fact” is, in my respectful opinion, a distraction in the present case. One does not escape from the conclusion that whether a submission is duly made is not jurisdictional by retreating to an attack upon the opinion necessarily formed by the adjudicator that the submission was not duly made, and then attacking that opinion, as if this legislative regime were one where the exercise of power turned on a precondition that might be a state of mind. The submission is not a logically valid means of side-stepping the proposition that it was within the adjudicator’s jurisdiction to determine whether or not a submission was duly made. What is more, if Builtcom’s submission was accepted, it would collapse the distinction between errors of law within jurisdiction and jurisdictional errors of law. If every conclusion by a decision-maker about a legal matter is treated as the formation of an opinion that is subject to Bellbird Collieries review, that would be a licence to treat every error of law in the formation of that opinion as a jurisdictional error.

36. [82]

    The fact that there has been no adjudication of the payment claim insofar as it relates to Tower Crane 2 “on the merits” does not entail that there is jurisdictional error in relation to that aspect of the claim.

37. [83]

    It may be dangerous to proceed by analogy from other areas of administrative law in relation to constructive failure to exercise jurisdiction in the special circumstances of this Act. For example, if the adjudicator formed the view that the crane was not “materials or equipment’ within the meaning of cl 28.2(c) and on that basis rejected the claim for $3.65 million based on the crane, and even if that were wrong in point of law, it is well settled that, without more, the legally erroneous determination would not be affected by jurisdictional error. The adjudicator, despite not being legally qualified, is authorised to determine questions of construction of the construction contract, and in doing so is authorised to get it wrong. See Probuild Constructions at [79]-[80]; Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd [2018] NSWCA 339 at [16]; Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [144]; Claire Rewais and Osama Rewais t/as McVitty Grove v BPB Earthmoving Pty Ltd [2025] NSWCA 103 at [4].

38. [84]

    Moreover, the adjudicator did not overlook the claim for Tower Crane 2. Instead, he explicitly addressed both sides’ submissions, including VSD’s submissions that this item should be rejected because of the lack of detail provided in the payment claim. That submission amounted to a submission that the submissions in support of the claim for the crane in the adjudication application were not “duly made”. The adjudicator had no choice but to address that submission. If he acceded to it, he had to disregard those submissions; if he rejected it, he had to have regard to those submissions: s 22(2). There was in fact a determination “on the merits”, but it was a determination of the parties’ logically anterior submissions as to whether the adjudicator was entitled to look at the claim for Tower Crane 2. There is no jurisdictional error if without more his answer to that submission was incorrect.

39. [85]

    The categories of jurisdictional error are not closed, and no rigid classification is possible: LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12; 418 ALR 152 at [3] and [5]. But in most ordinary cases, even if an adjudicator wrongly treats a submission as duly made when it was not duly made, or vice versa, no jurisdictional error will be demonstrated. The oft-repeated proposition that whether a submission is duly made is not jurisdictional amounts to the propositions that (a) it is within the adjudicator’s authority to decide the payment claim to determine whether a submission is duly made, and (b) the adjudicator is authorised to get that decision wrong.

40. [86]

    I acknowledge that there could be occasions when an adjudicator’s finding that a submission was not duly made would disclose jurisdictional error. Payne JA expressed the same reservation in Ceerose at [69]. I respectfully disagree with the propositions in [24] and [25] of the reasons of the primary judge if they were intended to be treated as absolutes, to the effect that it was impossible for any determination of whether a submission was “duly made” ever to amount to jurisdictional error.

41. [87]

    If an adjudicator, perhaps suffering from mental illness, formed the view that he or she would treat submissions as duly made if they were on white paper, or in 12 point typeface, and disregarded a party’s submissions which were on blue paper or in 10 point typeface, then it would be tolerably clear that the determination was not one authorised by the statute, and one way of characterising the species of jurisdictional error would be that the adjudicator had formed an opinion about what it meant for a submission to be “duly made” which was wrong in law and which had the effect of preventing the adjudication of the claim required by the statute. That said, there are other, probably more apposite, ways of characterising such a decision. Again, if an adjudicator’s personal assistant, without the adjudicator’s knowledge, accepted a bribe and altered the date of a party’s submissions and delayed their receipt, leading to a bona fide determination by the adjudicator that they were not duly made, the determination would be affected by jurisdictional error. The present case is far removed from such examples.

42. [88]

    The difficulty with Builtcom’s submissions is that they leap from error of law in the application of the “Cardno test” to jurisdictional error. Taking what was said by Basten JA in John Holland at its highest, an unreasonable determination that a submission was or was not duly made might amount to jurisdictional error. But Builtcom, aside from pointing to the Cardno test as an error of law, did not otherwise develop why there was jurisdictional error.

43. [89]

    In particular, Builtcom did not contend that the adjudicator was doing other than seeking in good faith to resolve the parties’ submissions as to the scope and ambit of what was before him. There was good reason for Builtcom taking that course.

44. [90]

    The adjudicator was required to determine whether a submission is duly made. In this Court, Builtcom accepted that there would be some submissions in an adjudication application which fell so far outside a payment claim that they could not be the subject of an adjudication. The example given in argument was of a second crane:

45. [91]

    The adjudicator will have to determine disputes which arise between the parties as to whether the other’s claims are within the scope of the adjudication. His or her decision as to those claims will ordinarily be within his or her jurisdiction.

46. [92]

    Builtcom’s claim for $3.65 million for Tower Crane 2 was plainly a claim made in its payment claim. But that does not mean that the adjudicator’s decision to value it as nil was one he was not authorised to make. In the present case, there was nothing, nor could there by anything, on the face of the adjudication application, to indicate that the issues concerning Tower Crane 2 would extend to (a) whether the contract was a “doctored document”, which had been “falsely claimed”, (b) that Builtcom did not own the crane which it said VSD was obliged to purchase from it, (c) that the very crane had been purchased by another company, (d) that Builtcom’s claim for rent was inconsistent with its claim that it had been obliged to purchase the items and to on-sell them to VSD, and finally (e) that if Builtcom was correct in all of the above, the amount claimed was more than triple the reasonable cost.

47. [93]

    The adjudicator said, in the course of applying the “Cardno test”, that:

48. [94]

    I have accepted Builtcom’s submission in ground 2 that the adjudicator was wrong in point of law in holding that any document supplied by Builtcom that would have altered VSD’s payment schedule had to be disregarded. However, his decision to proceed on the basis that the claims advanced by Builtcom were outside the scope of the payment claim, and therefore not to be determined by him, was one for him to make, and Builtcom has not pointed to any reason why the ultimate adjudication (or more precisely, parts of it) are void for jurisdictional error, save for its contention that legal error in applying the “Cardno test” amounted to jurisdictional error. To pick up on what Builtcom maintained was implicit in John Holland at [57], it was scarcely unreasonable on the face of the payment claim to conclude that questions of doctored documents, the sale of a crane which had been sold to another party, and a lively issue about quantum were outside its scope.

49. [95]

    Ground 3 does not advance Builtcom’s position, because it does not undermine what has been said above. Whether or not there is a “general rule” is, once again, a false issue. The only issue which matters is whether the adjudicator’s determination was affected by jurisdictional error.

50. [96]

    However, it is for an adjudicator to determine whether a submission is duly made. That obligation is imposed upon the adjudicator by s 22. In order to discharge that obligation, the adjudicator will have to consider, inter alia, the scope and ambit of the payment claim. Builtcom acknowledges that there will be occasions when an adjudicator will be obliged to reject a submission as not duly made because it is outside the scope and ambit of the payment claim (giving the example of a claim for Tower Crane 1). Generally speaking, if the adjudicator is wrong in determining whether a submission is duly made, that will not without more invalidate the determination for jurisdictional error.

51. [97]

    The difference between the proposition in the previous sentence and the contention in ground 3 reflects the fact that there is little utility in the context of an application for judicial review in speaking of a “general rule” which is derived from the Act to be applied in the determination of adjudication applications. No appeal lies from an adjudicator’s determination to a court, either by way of rehearing, or confined to questions of law. And judicial review is not available for error of law on the face of the record. The only question when judicial review is sought is whether a purported determination (or part of a determination, having regard to s 32A) is valid thereby giving rise to the limited rights and obligations for which the statute provides, or is void for jurisdictional error.

52. [98]

    For those reasons, none of Builtcom’s submissions lead to the conclusion that the determination was affected by jurisdictional error.

Ground 4: Discretion

1. [99]

   Ground 4 of Builtcom’s appeal does not arise in light of the absence of jurisdictional error. However, there is a separate reason why it does not arise.

2. [100]

   Having concluded there was no jurisdictional error, the primary judge turned, explicitly in the alternative (“If that conclusion was wrong”) to what would have occurred had jurisdictional error been found. She said that “it may well have been appropriate to set aside that part”: at [83]. She expressed the view that the remitter sought by Builtcom would have been inappropriate because the application was not before the Court for de novo determination, but instead said the question was whether the adjudicator should be commanded to determine those aspects of the determination which were affected by jurisdictional error: at [84]. I did not understand Builtcom to challenge that aspect of the reasoning.

3. [101]

   Instead, Builtcom’s challenge was directed to what her Honour said about the exercise of discretion. Her Honour said at [85]:

4. [102]

   That is not a finding that relief would have been refused. It is an indication of a provisional or tentative view, explicitly falling short of a concluded view.

5. [103]

   VSD supplied no notice of contention, seeking to uphold the result reached by the primary judge on a different basis, namely, that even if there were jurisdictional error, the proceedings should be dismissed in the exercise of the Court’s discretion. Its counsel confirmed during the hearing that that was a considered position.

6. [104]

   In those circumstances, there are two independent bases on which ground 4 does not arise. In addition to the ground not arising in the absence of jurisdictional error, it is preferable not to express views on the discretionary withholding of relief in the abstract, particularly because those views will necessarily be informed by the effect of s 32A, and perhaps also by the nature of the jurisdictional error. This should await a decision where it matters: Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [7]-[8].

Conclusion and orders

1. [105]

   I propose that the appeal be dismissed. Builtcom’s limited success on ground 2, which concededly was insufficient to warrant a different outcome, supplies no reason for departing from the usual rule. Accordingly, I propose these orders:

   1. (1)

      Appeal dismissed.

   2. (2)

      Appellant to pay the respondents’ costs, noting that the second and third respondents filed submitting appearances.

2. [106]

   ADAMSON JA: The appellant, Builtcom Constructions Pty Ltd (Builtcom), appeals against the dismissal of its claim for relief under s 69 of the Supreme Court Act 1970 (NSW) by Peden J (the primary judge) in the Equity Division of the Supreme Court (the Court below). In the Court below, Builtcom argued that Chris Thompson, the second respondent (the adjudicator), had committed a jurisdictional error by refusing to value certain claims in the course of his adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) on the basis that Builtcom’s submissions in its adjudication application had not been “duly made”. In the Court below, Builtcom was unsuccessful in its application for orders that the determination be set aside in part and that the part affected be remitted to the adjudicator for determination under the Act.

3. [107]

   The first respondent, VSD Investments Pty Ltd as trustee for The VSD Investments Trust (VSD), is the only other active party to the proceedings. The second and third respondents have filed submitting appearances.

4. [108]

   All references to legislation in these reasons are to the Act, unless otherwise stated.

The factual background

1. [109]

   By agreement dated 27 October 2022, Builtcom contracted with VSD to build a 30-storey mixed residential-commercial development in Burwood, NSW. The contract provided, by cl 25.1, that Builtcom’s Construction Manager was entitled to make a claim for payment at certain times.

2. [110]

   Clause 25.1 also provided:

3. [111]

   Clause 28.2 provided in part for payment upon termination for convenience. It relevantly provided:

4. [112]

   On 25 October 2024, VSD terminated the contract for convenience. On 22 November 2024, Builtcom served a payment claim under the Act on VSD, claiming a total of $30,625,050.75, including GST. On 4 December 2024, VSD served a payment schedule on Builtcom, scheduling an amount of - $700,241.78.

5. [113]

   On 17 December 2024, Builtcom lodged an adjudication application with the third respondent, the Australian Building and Construction Dispute Resolution Service. In its application, it provided further documentation to support its payment claim, including a report by a quantity surveyor, Wayne Elsom (the Elsom report) which addressed the detail of claims made in its payment claim.

6. [114]

   Builtcom also made the following submissions, by reference to Ceerose v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215 (Ceerose), about the adjudicator’s task:

7. [115]

   On 18 December 2024, the adjudicator accepted the appointment.

8. [116]

   On 24 December 2024, VSD lodged an adjudication response in which it contested the substance of all of Builtcom’s claims. It responded to the Elsom report by relying on a report from its own building expert, Timothy Haynes, who was assisted by Alan Leonard, a quantity surveyor. It did not contend that it was unable to respond substantively to any of Builtcom’s claims.

9. [117]

   In its response, VSD submitted that Builtcom’s payment claim was not accompanied by the supporting documents required by cl 25 of the contract. For example, it said, by reference to claim 1.0302 – Tower Crane 2:

10. [118]

    VSD further submitted:

11. [119]

    VSD then referred to John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258 (Cardno) and Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd & Ors [2005] NSWCA 229 (Coordinated Construction) at [25], [26] (Hodgson JA) and [42] (Basten JA). Relying on Cardno, it submitted:

12. [120]

    On 3 February 2025, the adjudicator delivered a determination, determining an amount of $8,467,232.13 in Builtcom’s favour.

13. [121]

    The adjudicator noted at [15] that VSD had raised the following jurisdictional issue:

    1. (1)

       until its adjudication application, Builtcom had failed to provide supporting documentation which would “allow for an integral view of the disputed payment claim”;

    2. (2)

       the requirement in s 22(2)(c) of the Act that submissions in support of an adjudication application be duly made “effectively limits the matters and submissions to be considered by an adjudicator to documentation that was readily available in support of a payment claim”; and

    3. (3)

       accordingly, the submissions (and documentation) included in Builtcom’s adjudication application were not duly made.

14. [122]

    In his reasons for determination, the adjudicator referred to Ceerose and Cardno:

15. [123]

    On the basis of Cardno, the adjudicator rejected most of Builtcom’s claims without dealing with them on the merits. His reasons in respect of each of the groups of claims were similar. The following example suffices:

16. [124]

    The adjudicator did not, however, find that VSD was prevented by s 20(2B) of the Act from addressing these matters in its adjudication response. Nor did he find that if he were to consider Builtcom’s adjudication application, VSD would be denied natural justice. It appears from his reasons that the adjudicator has applied the so-called Cardno test without regard to whether it was necessary to avoid a breach of natural justice.

17. [125]

    On 5 February 2025, Builtcom commenced proceedings in the Technology and Construction List of the Court below. It claimed that the adjudicator had made a jurisdictional error in declining to consider its claims on the basis set out in the reasons (an example of which appears in the extract above) and sought an order pursuant to s 32A of the Act “and any other enabling power of the Court”, setting aside those parts of the determination relating to those claims and seeking an order in the nature of mandamus, injunction or remitter, that the adjudicator determine these claims. On 6 February 2025, VSD commenced separate proceedings in the same list, challenging the determination in so far as it determined an adjudication amount in the order of $8.5 million in favour of Builtcom.

18. [126]

    The two proceedings were heard together by the primary judge, who, on 11 April 2025, dismissed both Builtcom’s and VSD’s summonses and ordered each party to pay its own costs: Builtcom Construction Pty Ltd v VSD Investments Pty Ltd atf The VSD Investments Trust; VSD Investments Pty Ltd atf The VSD Investments Trust v Builtcom Construction Pty Ltd [2025] NSWSC 250 (PJ). VSD has not appealed against the dismissal of its summons.

19. [127]

    The primary judge relevantly posited the following issues at PJ [15]: whether the adjudicator fell into jurisdictional error by finding that Builtcom’s contested submissions were not “duly made”; and, if so, what relief ought be granted.

20. [128]

    At [24], the primary judge cited Ceerose for the proposition that an error in identifying a submission as having been “duly made” is not jurisdictional and reasoned, on that basis, that an adjudicator’s erroneous finding that a submission is duly made is not jurisdictional. Her Honour concluded:

21. [129]

    However, the primary judge also addressed the question from “first principles” and determined, also on this alternative basis, that Builtcom had not established jurisdictional error for the following reasons:

    1. (1)

       there is a “general rule” (other than where a respondent raises an issue in the payment schedule) that, “where submissions included in an adjudication application go beyond the scope or ambit of [a] payment claim (as ascertained by the adjudicator …), those submissions are not ‘duly made’”: PJ at [44];

    2. (2)

       the adjudicator applied this general rule: PJ at [49]; and

    3. (3)

       in any event, mandamus should probably not issue because a “more convenient and satisfactory remedy” exists, namely, final proceedings on the parties’ final rights: PJ at [84]-[85].

The statutory framework

1. [130]

   Section 3 provides:

2. [131]

   Part 2 of the Act, entitled “Rights to progress payments”, contains s 8(1) which provides:

3. [132]

   Part 3 of the Act, entitled “Procedure for recovering progress payments”, provides (in Division 1) for “Payment claims and payment schedules” (ss 13-16) and (in Division 2) for “Adjudication of disputes” (ss 17-26).

4. [133]

   Section 13(2) provides:

5. [134]

   The only other requirement as to what a payment claim must include is stipulated by s 13(7), which requires a principal to include in a payment claim a “supporting statement”, which is defined in s 13(9) to mean a statement declaring, in effect, that all subcontractors have been paid.

6. [135]

   Section 14 provides in part:

7. [136]

   Section 14(4) provides that if a respondent to a payment claim does not provide a payment schedule within the time required, 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.”

8. [137]

   If, relevantly, the scheduled amount in the payment schedule is less than the amount of the payment claim, the claimant may make an adjudication application: s 17(1). The adjudication application must be in writing (s 17(3)(a)) and “may contain such submissions relevant to the application as the claimant chooses to include”: s 17(3)(h).

9. [138]

   Section 20 provides for the respondent to make an adjudication response which must be in writing and “may contain such submissions relevant to the response as the respondent chooses to include”: s 20(2)(c).

10. [139]

    Section 20(2B) provides:

11. [140]

    Section 22(1) requires the adjudicator to determine the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount) and the date on which the amount becomes payable and the rate of interest.

12. [141]

    Section 22(2) sets out various matters which an adjudicator is to consider in determining an adjudication application, which include “the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the schedule”: s 22(2)(c). Similar wording is used in respect of the payment schedule and supporting submissions: s 22(2)(d).

13. [142]

    Section 32 (which is relevant to ground 4) provides:

14. [143]

    Section 32A, which is relevant to relief, provides:

15. [144]

    Section 34 provides:

The grounds of appeal

1. [145]

   Builtcom relied on the following grounds of appeal:

Consideration

1. [146]

   The question which arises on this appeal is whether the primary judge was in error in her answers to the following questions:

   1. (1)

      whether the adjudicator’s opinion that Builtcom’s submissions were not “duly made” was reviewable in the Court below;

   2. (2)

      if so, whether, that opinion was affected by an error of law;

   3. (3)

      if so, whether the error was jurisdictional; and,

   4. (4)

      if so, what relief, if any, is appropriate.

2. [147]

   Questions (1), (2) and (3) are the subject of grounds 1-3 and question (4) is the subject of ground 4.

3. [148]

   Grounds 1, 2 and 3 can be addressed together as there is considerable overlap between them.

4. [149]

   In Ceerose, Payne JA at [31] summarised the effect of decisions of this Court on the status of an adjudicator’s opinion that a submission has, or has not, been “duly made” as follows:

5. [150]

   It does not, however, follow that the adjudicator’s opinion that a submission was or was not duly made is necessarily immune from judicial review. In Coordinated Construction, this Court held that although the elements listed in s 13(2) properly depended on the satisfaction or opinion of the adjudicator (as did the opinion in s 22(2)(c) or (d) as to whether a submission had been duly made), this opinion was held not to be beyond judicial review. Basten JA said, at [47]:

6. [151]

   On the basis of authority, I consider that the primary judge was in error in finding, at [24]-[26], the adjudicator’s opinion that a submission was not duly made was unreviewable. The assessment of whether such an opinion is amenable to judicial review requires analysis of how that opinion was arrived at and, importantly, whether it was arrived at as a result of jurisdictional error.

7. [152]

   Because of the centrality of Cardno to Builtcom’s challenge to the determination in the Court below, it is necessary to consider it in some detail. In Cardno, Einstein J addressed the lack of symmetry between s 20(2B) (which confines a respondent to the reasons given in the payment schedule) and the absence of any corresponding provision with respect to the adjudication application. His Honour accepted that the effect of s 13(1) was that a payment claim was valid even if it did not provide supporting materials: [21]. However, his Honour considered that an applicant who fails to include such materials with the payment claim may, nonetheless, suffer adverse consequences. Einstein J said:

8. [153]

   The primary judge rejected Mr Hume’s submission that the adjudicator applied Cardno as if it were a rule. Her Honour regarded Cardno as an example of the application of a “scope and ambit ‘test’ [that was] merely a heuristic that an adjudicator may comfortably apply in most cases to ensure that the respondent is afforded natural justice”: PJ at [47]. I reject this description. For the reasons which follow, I consider that the adjudicator regarded Cardno as a rule which he was required to apply.

9. [154]

   Mr Sirtes SC, who appeared with Mr Ball for VSD, submitted that the purpose of qualifying the word “submissions” with the words “duly made” in s 22(2)(c) was to ameliorate the asymmetry in the Act between, on the one hand, the right of a claimant to put material in the adjudication application which was not included with the payment claim and, on the other, the prohibition against the respondent including in its adjudication response any reason which was not included in the payment schedule (s 20(2B)). He submitted that the asymmetry created an “inbuilt statutory unfairness” and an “unlevel playing field” which was manifested in the consequence (which he described as “Draconian”) that, if no payment schedule was served, the payment claim became a statutory debt which could be enforced as a judgment. He submitted that where a payment claim contains such little detail that the respondent cannot “meaningfully respond”, the adjudicator is entitled to disregard such of the claimant’s submissions in the adjudication application which serve to bolster an unsubstantiated payment claim by applying the “duly made” filter in s 22(2)(c).

10. [155]

    Mr Sirtes accepted, in accordance with s 34, that the requirements of the Act cannot be modified by the parties’ contract and that, accordingly, a payment claim, to be valid, need only comply with s 13. However, he submitted that since the adjudicator was obliged, under s 22(2)(b), to have regard to the provisions of the construction contract, the adjudicator could determine that a submission in a claimant’s adjudication application was not duly made if it constituted substantiation of a previously unsubstantiated payment claim. He submitted that Cardno merely reflected the matters which can properly inform an adjudicator’s consideration of whether a submission was “duly made” and that this evaluative exercise was “non-jurisdictional”. He accepted that it was possible to read the adjudicator’s reasons in [99] and [100] as applying a “rule” derived from Cardno but contended that the adjudicator had used Cardno “in a heuristic sense” (a description adopted by the primary judge) to give the adjudicator’s task some meaning.

11. [156]

    One of the questions for this Court is whether the adjudicator’s opinion (that certain submissions by Builtcom were not “duly made” within the meaning of s 22(2)(c)) was affected by a misconstruction of the Act. These related to claims for which further “submissions” (specifically, documentation to substantiate the payment claim) had been provided in the adjudication application but which were not included with the original payment claim served to VSD. It appeared to be common ground that the word “submissions” in ss 17(3)(h) and s 22(2)(c) was not confined to arguments or contentions (as the term is commonly understood in litigation) but rather extended to supporting documentation, such as invoices, expert reports and so on: see Austruc v ACA; ACA v Sarlos [2004] NSWSC 131 at [66]-[67] (McDougall J).

12. [157]

    In my view, it is plain from the adjudicator’s reasons that he construed Cardno as requiring him to refuse to address those of Builtcom’s claims which were supported by further material in the adjudication application, beyond that which was served as part of the payment claim. The adjudicator did not refuse to value these claims on the basis of what the Act did, or did not, provide. Rather, in deciding whether Builtcom’s submissions were “duly made”, he applied the test which he understood Cardno to require. I reject Mr Sirtes’ submission that the adjudicator’s reasons ought be read otherwise.

13. [158]

    The effect of Mr Sirtes’ submissions was that the adjudicator was entitled (if not positively obliged) to ameliorate the harshness of the asymmetry in the Act. The adjudicator did so by incorporating into the evaluation of whether a claimant’s submission had been “duly made” a comparison between the detail provided in an admittedly valid payment claim and the contents of the submission in the adjudication application. The adjudicator could then disregard any material which provided detail which was not included in the payment claim. I reject this submission.

14. [159]

    I accept Mr Hume’s submission that it would be open to a respondent to a payment claim to put in the payment schedule, in respect of a particular item or items, “$0: I dispute this item as it is not adequately substantiated”, since this would fall within the words “any reason” in s 14(3). In that event, it would also be open to the claimant, in its adjudication application, to provide such substantiation, within the time limits provided by the Act. The respondent, in its adjudication response, would be entitled either to accept that the item or items have been substantiated or to maintain its position that the item has not been substantiated. It would then be up to the adjudicator to determine the value of these items in the determination.

15. [160]

    The Act does not impose the limitation on what may be included in an adjudication application as was imposed by the adjudicator or contended for by the respondent. Section 22(2)(c) obliges an adjudicator, in determining an adjudication application, to consider “the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim”. It does not contain the gloss for which Cardno stands (that the adjudicator is not entitled to consider any part of the payment claim where the submissions contain material which was not served with the payment claim). Thus, in so far as this approach purported to be required by Cardno, it is inconsistent with the Act and amounts to an error of law.

16. [161]

    Further, it follows from the principle of parliamentary sovereignty that it is neither for judges nor administrative decision-makers to subvert what is perceived to be an unfairness created by legislation by the creation of “rules” designed to ameliorate policy choices made by the legislature. References to “unlevel playing field” or “statutory unfairness” are unhelpful in this context. As this Court has noted elsewhere, a clear object of the Act, as is evident from s 3 and from a reading of the Act as a whole, is to pass the risk of insolvency “up the line” to the principal, not down the line to a sub-contractor: Hynash Constructions Pty Ltd v BRP Industries Pty Ltd [2025] NSWCA 14 at [42]. To the extent to which this can be described as asymmetrical, it is evidently the result of a deliberate legislative policy choice. Thus, someone who performs building work is entitled to receive progress payments on an interim basis under the Act, with the final balance to be ascertained later, if need be, in proceedings before a court or arbitrator.

17. [162]

    The next question is whether the adjudicator’s error of law is jurisdictional, since this Court’s power to grant relief in respect of a determination depends on the establishment of that matter: Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 95 NSWLR 157; [2016] NSWCA 379 (Shade Systems) at [85]-[86] (Basten JA, Bathurst CJ, Beazley P, Macfarlan and Leeming JJA agreeing).

18. [163]

    Authorities which pre-date Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1 (Kirk) are, in some cases, of less assistance, given the importance of that decision in defining and identifying the features of jurisdictional error. Authorities concerning other statutory contexts are not necessarily directly applicable since the Act creates a particular framework for interim decision-making which has few, if any, analogues.

19. [164]

    In Kirk, the High Court referred to the difficulty (discussed in Craig v South Australia (1995) 184 CLR 163 at 175-176; [1995] HCA 58) of distinguishing between jurisdictional and non-jurisdictional error. It also referred to the following passage from Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [163]:

20. [165]

    In Plaintiff M1/2021 v Minister for Home Affairs (2022) 275 CLR 582; [2022] HCA 17, the High Court (Kiefel CJ, Keane, Gordon and Steward JJ) addressed the matters which “may give rise to jurisdictional error” at [27] and included, among such matters “if review of a decision-makers reasons discloses that the decision-maker … misunderstood the applicable law …”. The cases cited in support of that proposition included R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430; [1944] HCA 42 (Bellbird Collieries); Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22; [2015] HCA 51 (Wei) at [33].

21. [166]

    In Bellbird Collieries, Latham CJ said at 430

22. [167]

    In Wei, the High Court at [33] held that where the power depended on the decision-maker being satisfied of a particular matter, the state of mind must be formed “reasonably and on a correct understanding of the law”.

23. [168]

    The distinction between an adjudicator’s non-jurisdictional error of law (in respect of which this Court lacks jurisdiction to grant relief), and a jurisdictional error (in respect of which this Court can grant a remedy) is thus critical in the present case. Shade Systems itself provides an example of the operation of the distinction. This Court concluded, at [86], that because the adjudicator’s errors of law on the face of the record in construing the contract (the provisions of which were a mandatory relevant consideration pursuant to s 22(2)(b)) were within the adjudicator’s authority, the errors were not jurisdictional and this Court could not intervene. Probuild’s appeal to the High Court was dismissed: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4.

24. [169]

    In Ceerose, this Court considered what constitutes jurisdictional error in the context of the statutory framework of the Act. Payne JA said at [77]:

25. [170]

    His Honour continued at [82]:

26. [171]

    In Ceerose the adjudicator had gone beyond the parameters of the parties’ dispute, as delineated by a comparison between the payment claim and the payment schedule. As the adjudicator’s jurisdiction was confined to that dispute, the adjudicator was found, in this respect, to have committed jurisdictional error.

27. [172]

    In the present case, the adjudicator decided, in substance, that he was not entitled to consider the adjudication application in so far as it went beyond the materials served as part of the payment claim. He considered that since the payment schedule might have been different if those materials had been provided with the payment claim (the Cardno category), those parts of the submissions in the adjudication application were not “duly made”. However, in order to exercise the jurisdiction conferred on the adjudicator, the adjudicator was obliged to consider the adjudication application, including materials which substantiated the claims for payment in the payment claim. By refusing to adjudicate on the claims in the Cardno category on the basis that they were not, for that reason, “duly made”, the adjudicator misapprehended his statutory mandate in s 22. The error in the present case is distinguishable from Shade Systems, where the adjudicator misconstrued the terms of the contract which was required to be taken into account. The error in the present case affected the ambit of the adjudication by limiting what the adjudicator was to consider which had no basis in the Act and which constituted an unwarranted gloss on the statutory words.

28. [173]

    The adjudicator misconstrued the Act and therefore misapprehended his task. The result of his misapprehension was that he refused to determine a large part of Builtcom’s claim for a progress payment. For this Court to characterise an error which imposes a gloss on s 22 and which effectively undermines the scheme of the Act as non-jurisdictional would run the risk of creating “islands of power immune from supervision and restraint” (Kirk at [99]). I am persuaded that his error was jurisdictional. In my view, the primary judge was in error in finding to the contrary.

29. [174]

    For the reasons given above, grounds 1, 2 and 3 have been made out. The question of appropriate relief will be addressed at the conclusion of these reasons.

30. [175]

    Both parties relied on arguments which were appropriately categorised as “floodgates” arguments. Mr Hume submitted that if Mr Sirtes’ submissions were accepted, payment claims would become more voluminous in circumstances where they may never be disputed, either in whole or in part, and that this would create the unintended consequence of rendering the process of obtaining payment of a progress claim unduly costly. Mr Sirtes submitted that if an adjudicator was not permitted to disregard submissions for the reason given by the adjudicator in the present case, there would be manifest unfairness because a claimant could give little or no information in a payment claim and then ambush a respondent in the submissions contained within its adjudication application.

31. [176]

    Because the range of building disputes covered by the Act is wide and the sophistication of the principals, builders and sub-contractors variable, it is difficult to predict what consequences will ensue from any given interpretation of the Act. I do not consider the present case to be one in which recourse to floodgates arguments is of assistance and therefore would prefer not to express a view on the postulated consequences of orders which this Court might make.

32. [177]

    As set out above, s 34 of the Act prohibits contracting out of the Act. A question arose whether cl 25.1 of the contract was inconsistent with s 13 of the Act and was, for that reason, void. Section 13 sets out the requirements for a valid payment claim in terms which are exhaustive and which cover the field. To the extent that a contract purports to add to these requirements, it is, by reason of s 34, void. While the terms of cl 25.1 were referred to by the adjudicator, Builtcom’s grounds did not touch on this aspect, which accordingly need not be addressed further.

33. [178]

    The primary judge, as set out above, said, by way of contingent conclusion, that had her Honour found jurisdictional error, she would still have declined relief on the basis that Builtcom had a suitable remedy under the common law, which was preserved by the Act. VSD had not raised this basis for resisting relief in either its pleading, its evidence or its submissions. Indeed, there was no evidence before the primary judge as to the time it would take to enforce rights preserved by s 32 of the Act.

34. [179]

    In one sense, this observation by the primary judge can be disregarded since it was no more than a contingent conclusion which is inapplicable once jurisdictional error has been found. Indeed, Mr Sirtes accepted the description put to him that the primary judge’s observation was “really no more than a provisional indication of a possible inclination”. However, if it is more than that, it may be necessary for Builtcom to establish House v The King (1936) 55 CLR 499 at 555; [1936] HCA 40 error.

35. [180]

    If it were necessary to review the primary judge’s observation, I consider a House v The King error has been established and ground 4 has been made out. A right under the general law to sue for damages for breach of contract is not a remedy for the right to a progress payment which Builtcom sought to enforce in its adjudication application. The former is a cause of action which merges into a judgment of the court (or an arbitral award); the latter is a right to an interim progress payment under the Act in an amount determined (solely and exclusively) by an adjudicator. I am not satisfied that there is any proper reason to refuse relief.

36. [181]

    Section 32A empowers this Court to set aside only that part of the determination which is affected by jurisdictional error while confirming that part which is not. I consider that the determination ought be declared invalid in so far as it is affected by the jurisdictional error identified above and the balance confirmed.

Proposed orders

1. [182]

   I propose the following orders:

   1. (1)

      Appeal allowed.

   2. (2)

      Set aside orders (1) and (3) made by Peden J on 11 April 2025 in so far as it relates to proceedings 2025/46823 and, in lieu thereof:

   3. (3)

      Order the first respondent to pay the appellant’s costs of the appeal.

2. [183]

   FREE JA: I agree with Leeming JA.