Romeciti Macquarie Pavillion Pty Ltd v Watpac Construction Pty Ltd

1. [1]

   By Summons filed on 31 March 2026, the Plaintiff, Romeciti Macquarie Pavilion Pty Ltd, seeks an order setting aside, in whole or in part, an Adjudication Determination that was made in favour of the First Defendant, Watpac Construction Pty Ltd, by the Second Defendant (the Adjudicator), pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act).

2. [2]

   The Third Defendant is the nominating authority which appointed the Adjudicator. Neither the Adjudicator nor the Third Defendant played any active part in the proceeding.

3. [3]

   Romeciti contends that the Adjudication Determination should be set aside for jurisdictional error on three grounds. In summary, Romeciti asserts that:

   1. (1)

      the Adjudicator “constructively failed to consider” the Payment Claim which Watpac served on 22 January 2026, and Watpac’s supporting submissions, as required by s 22(2)(c) of the Act (Ground 1);

   2. (2)

      the Adjudicator lacked jurisdiction “because, on the proper characterisation of the Payment Claim as served, Watpac did not assert a claimed entitlement to a progress payment under the ‘construction contract concerned’ within ss 8 and 13(1) of the Act” (Ground 2); and

   3. (3)

      the Adjudicator “failed to perform the statutory task and thereby fell into jurisdictional error” by treating EnerMech Pty Ltd v Acciona Infrastructure Projects Pty Ltd (2024) 115 NSWLR 56; [2024] NSWCA 162 and JG King Project Management Pty Ltd v Hunters Green Retirement Living Pty Ltd (2024) 77 VR 406; [2024] VSCA 310 as if they “established that a claim for the return of encashed security is, without more, valid under the Act”, and thereby failed to determine the anterior question whether Watpac’s asserted entitlement was claimed to arise under the construction contract (Ground 3).

4. [4]

   Before addressing the specific grounds of jurisdictional error asserted by Romeciti, I set out the relevant factual background.

Factual background

1. [5]

   On 13 May 2019, Romeciti and Watpac entered into a contract for the carrying out of design and construction works by Watpac in respect of the “Natura” residential development at 82–84 Waterloo Road, Macquarie Park, New South Wales (Contract). The Natura development comprised two 21 storey residential buildings, with 334 residential apartments and one retail tenancy (Project). It was common ground that the Contract fell within the definition of a “construction contract” in s 4 of the Act.

2. [6]

   The Contract defined “security” as follows:

3. [7]

   Clause 5.1 of the Contract provided that security was for the purpose of ensuring the due and proper performance of the Contract, and “shall be provided by [Watpac] in accordance with Item 14”. This item specified that the “form” of security was two unconditional undertakings “in a form and from an insurance company approved by [Romeciti] (acting reasonably)”.

4. [8]

   The form of security that was provided by Watpac pursuant to the Contract was as follows:

   1. (1)

      a BNP Paribas Undertaking for $3,750,147; and

   2. (2)

      an Asset Insure Bond for $3,750,147.

5. [9]

   The Contract contained the following provisions regarding recourse to, and return of, the security:

6. [10]

   As set out above, the Contract provided that:

   1. (1)

      Romeciti’s obligation under cl 5.4(a) to return the first of the two securities (or 50% of any retention money) arose 14 days after Watpac provided certain documents “following the last separable portion to achieve practical completion”; and

   2. (2)

      Romeciti’s obligation under cl 5.4(b) to return the second of the two securities (or the balance of the retention money) arose upon the later to occur of:

7. [11]

   The Contract defined “date of practical completion” as:

8. [12]

   Clause 34.6 of the Contract dealt with the issuing of a certificate of practical completion, and provided as follows:

9. [13]

   Clause 35 of the Contract provided that the defects liability period (which was specified in Item 32 to be a period of two years) “shall commence on the date of practical completion at 4:00 pm”.

10. [14]

    Clause 37.4 of the Contract provided that:

    1. (1)

       within 28 days of the expiry of the last defects liability period, Watpac “shall give the Superintendent a written final payment claim endorsed ‘Final payment’ being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract”; and

    2. (2)

       within 10 business days of the receipt of the final payment claim, “the Superintendent shall issue to both [Watpac] and [Romeciti] a final certificate evidencing the moneys finally due and payable between [Watpac] and [Romeciti] on any account whatsoever in connection with the subject matter of the Contract”.

11. [15]

    Clause 37.5 of the Contract provided that interest of 8% per annum “shall be due and payable after the date of default in payment and shall not compound”.

12. [16]

    On or around September 2019, construction work for the Project commenced.

13. [17]

    On or around 25 February 2022, the Owners – Strata Plan 104187 was registered, and an occupation certificate was issued.

14. [18]

    On 10 October 2022, Watpac served on Romeciti a payment claim in the amount of $13,298,959 (excl GST) that was issued under s 13 of the Act (2022 Payment Claim).

15. [19]

    On 24 October 2022, Romeciti issued a payment schedule in response to the 2022 Payment Claim, which scheduled the amount due to Watpac as $nil and asserted that Watpac owed the sum of $5,657,158 to Romeciti (2022 Payment Schedule).

16. [20]

    On 4 November 2022, Watpac submitted an adjudication application in respect of the 2022 Payment Claim (2022 Adjudication).

17. [21]

    On 8 December 2022, the adjudicator appointed in respect of the 2022 Adjudication determined that Watpac was entitled to the amount of $5,717,413.59, plus interest and the adjudicator’s fees.

18. [22]

    On 19 December 2022, Romeciti paid the amount of $5,717,413.59 to Watpac. On the same day, Romeciti served a payment schedule which claimed that Watpac owed the amount of $7,829,924 (excl GST) to Romeciti.

19. [23]

    Also on 19 December 2022, Romeciti converted to cash the Undertaking and the Bond (in a total amount of $7,500,294).

20. [24]

    These matters gave rise to a dispute between the parties.

21. [25]

    On 11 July 2025, Romeciti and Watpac entered into a Deed of Settlement and Release. The recitals to the Deed of Settlement referred to the matters set out in paragraphs [18]-[24] above. In particular, recital F.3 was in the following terms:

22. [26]

    Clause 2.1 of the Deed of Settlement provided as follows (emphasis added):

23. [27]

    Clause 2.3 of the Deed of Settlement provided as follows:

24. [28]

    Clause 3.1 of the Deed of Settlement provided as follows:

25. [29]

    Clause 7.3 of the Deed of Settlement provided that “[t]his deed constitutes the entire agreement between the parties and supersedes any prior representations, understandings or arrangements made between the parties, whether orally or in writing”.

26. [30]

    On 22 January 2026, Watpac served the Payment Claim on Romeciti. The front page of the Payment Claim was headed “Final Payment Claim”, identified the Contract, and stated that the Payment Claim was made “in accordance with clause 37 of the Contract”.

27. [31]

    The Payment Claim claimed that Watpac was entitled to be paid by Romeciti an amount of $9,199,264.71 (excl GST). The “Claim Summary” on the first page of the Payment Claim provided the following breakdown of this amount:

28. [32]

    The Payment Claim was accompanied by a letter from Watpac to the Superintendent, dated 13 January 2026, which relevantly stated as follows:

29. [33]

    Romeciti’s arguments as to jurisdictional error were based, in large part, on a document headed “Claim Summary and Breakdown”, which formed part of the Payment Claim. Given its centrality to the issues in dispute in the proceeding, I have set out the full text of this document below (emphasis in original):

30. [34]

    On 5 February 2026, Romeciti issued a Payment Schedule, which scheduled the amount owing to Watpac as “nil”.

31. [35]

    The cover page of the Payment Schedule stated that:

32. [36]

    Paragraph 1.2 of the Payment Schedule stated that:

33. [37]

    The Payment Schedule asserted that the “Overall position” of Romeciti was as follows: “Deed [of Settlement] is void or subject to rectification and entitlement to payment to Contractor is $Nil”.

34. [38]

    The Payment Schedule asserted that Watpac’s claim for $9,199,264.71 (excl GST), as set out in the Payment Claim, was “solely based on the application of the [Deed of Settlement]”. The Payment Schedule then provided a lengthy set of contentions directed to the proposition that the Deed of Settlement was “unenforceable, void or subject to rectification”. Romeciti submitted that, in the event that the Adjudicator accepted its contention that the Deed of Settlement was void, then the consequences were as follows:

35. [39]

    Romeciti further contended that, if the Deed of Settlement was “partially void or subject to correction”, then Watpac was entitled to bring a claim only in respect of the cash amount held by Romeciti following the conversion of the Bond, which was described as the “Final Security” (and not in respect of the cash held by Romeciti following conversion of the Undertaking). Romeciti asserted that the release of the Final Security was “subject to the mechanism as set out in clause 5 of the Contract (and as also set out under the [Deed of Settlement]…)”. The Payment Schedule continued as follows:

36. [40]

    Romeciti contended, in the alternative, that if (“which is denied”) the Deed of Settlement was fully enforceable, then “the limit of any amount which may be determined under any adjudication application” in favour of Watpac was $301,090.00.

37. [41]

    Three matters should be noted.

38. [42]

    First, in the Payment Schedule, Romeciti proceeded on the basis that the Payment Claim had been issued by Watpac pursuant to cl 37.4 of the Contract, and stated that its response was also issued pursuant to that clause and constituted a “final certificate” for the purposes of the Contract.

39. [43]

    Secondly, whereas Romeciti asserted in the Payment Schedule that the Deed of Settlement was void, Romeciti’s arguments on the present judicial review application proceeded on the basis that the Deed of Settlement was a binding agreement (with Romeciti asserting that any claims to the cash amounts held by Romeciti following the conversion of the Undertaking and the Bond merged in the Deed of Settlement).

40. [44]

    Thirdly, Romeciti did not, in the Payment Schedule, advance any contention to the effect that, if the Deed of Settlement was a binding agreement, then the Adjudicator had no jurisdiction to make any determination in respect of the Payment Claim. Instead, the only argument as to jurisdiction which was advanced in the Payment Schedule was to the effect that, if the Deed of Settlement was not binding, then Watpac was not entitled to serve a Payment Claim that was based on the Deed of Settlement and therefore any adjudication determination in relation to the Payment Claim would be “void for jurisdictional error” (see paragraph [38] above). In contrast, Romeciti accepted in the Payment Schedule that, if (contrary to Romeciti’s contentions) the Deed of Settlement was binding, then Watpac was entitled to receive a substantial payment in respect of its Payment Claim (see paragraph [40] above).

41. [45]

    On 19 February 2026, Watpac made an Adjudication Application under s 17 of the Act.

42. [46]

    In the Adjudication Application, Watpac contended that:

    1. (1)

       the cash amounts held by Romeciti following the conversion of the Undertaking and the Bond were held subject to the terms of the Contract and, in particular, cl 5, “effectively in the same manner as retention moneys”;

    2. (2)

       Watpac was entitled to the cash amount in respect of the Undertaking pursuant to cl 5.4(a) of the Contract, following the achievement of practical completion of the last separable portion; and

    3. (3)

       Watpac was entitled to the cash amount in respect of the Bond pursuant to cl 5.4(b) of the Contract.

43. [47]

    In response to Romeciti’s contention that, pursuant to cl 5.4(b) of the Contract, Watpac’s entitlement to the “Final Security” arose only upon the issue of the final certificate, which had not occurred at the time of the issue of the Payment Claim, Watpac drew attention to the fact that cl 5.4(b) in fact referred to “the issue of the final certificate (or when the final certificate ought to have been issued in accordance with the Contract)” (emphasis in Adjudication Application). Watpac then advanced the following four arguments in response to Romeciti’s contention:

44. [48]

    Watpac contended that the first and fourth of these arguments were “standalone arguments”, which did not depend on the underlying facts pertaining to Romeciti’s failure to issue a final certificate, and that if either of those arguments was accepted, the Adjudicator “must find that Watpac is entitled to be paid the cash Security”.

45. [49]

    Watpac noted that the second and third of those arguments “involve the proposition that a cause of there being no ‘final certificate’ was a breach or breaches of contract by Romeciti”. The matters relied on in support of this contention included that:

    1. (1)

       Romeciti was under an obligation to ensure that the Superintendent fulfilled all certification, determination and assessment functions “fairly, honestly and reasonably”, including the function of considering and determining a request by Watpac for the issue of a certificate of practical completion (Contract, cll 20 and 34.6); and

    2. (2)

       in addition, Romeciti was contractually obliged, by cl 2.3(b) of the Deed of Settlement, to ensure that within 10 business days of 11 July 2025, the Superintendent issued a certificate of practical completion for separable portion 2 (being the last separable portion) specifying 9 March 2022 as the date upon which practical completion was reached (see paragraph [27] above).

46. [50]

    Watpac contended that:

    1. (1)

       if Romeciti had complied with its obligations under the Contract, the Superintendent would have issued a certificate of practical completion specifying 9 March 2022 as the date of practical completion;

    2. (2)

       the defects liability period would have expired two years later (9 March 2024);

    3. (3)

       Watpac would have issued a final payment claim shortly thereafter, and in any event by 6 April 2024; and

    4. (4)

       Romeciti would have issued a final payment certificate by no later than 19 April 2024.

47. [51]

    On this basis, Watpac contended that 19 April 2024 was, within the meaning of cl 5.4(b) of the Contract, the date “when the final certificate ought to have been issued in accordance with the Contract”, and therefore the date when the obligation to release the Final Security arose.

48. [52]

    It follows that Watpac did not invoke cl 2.3(b) of the Deed of Settlement as the source of its entitlement to the release of the cash held following conversion of the Bond. Instead, Watpac invoked cl 5.4(b) of the Contract as the source of its entitlement, and relied on the obligation in cl 2.3(b) of the Deed of Settlement as providing only one of a number of (independent) reasons as to why the final certificate “ought to have been issued” at an earlier point in time, such that the requirements of cl 5.4(b) of the Contract had been satisfied.

49. [53]

    On 27 February 2026, Romeciti lodged its Adjudication Response.

50. [54]

    In the Adjudication Response, Romeciti repeated its contention that Watpac’s claim was “made solely in relation to alleged entitlements under [the Deed of Settlement] which sits separate to the Contract for the carrying out of the construction work”.

51. [55]

    In addition, Romeciti asserted that, as a result of the Undertaking and the Bond being cashed, “the securities were reduced to $Nil and ceased to exist”, and stated that:

52. [56]

    Accordingly, issue was joined as to whether, after the securities were cashed, the cash held by Romeciti was “security” for the purposes of cl 5 of the Contract and, therefore, whether any such cash was required to be released to Watpac pursuant to cl 5.4 of the Contract.

53. [57]

    On 20 March 2026, the Adjudicator issued the Adjudication Determination. In particular, the Adjudicator determined that Watpac was “entitled to the return of the cash securities in the sums of $3,750,147.00 and $3,750,147.00, totalling $7,500,294.00, together with interest thereon at 8% in accordance with clause 37.5 and Item 36 of the Contract”. The Adjudicated Sum was the amount claimed in the Payment Claim, that is, $9,199,264.71 (excl GST).

54. [58]

    On 1 April 2026, the Adjudicator reissued the Adjudication Determination. The only change – which was made pursuant to the “slip” rule in s 22(5) of the Act – was to correct a typographical error on the cover sheet (namely, Romeciti’s ACN had been mistakenly referred to as an “ABN”).

55. [59]

    I will refer to particular parts of the Adjudication Determination when dealing with the various grounds of judicial review. By way of overview, there were, for present purposes, six key aspects to the Adjudicator’s reasoning.

56. [60]

    First, the Adjudicator considered (at paragraph [15] and following), and rejected, Romeciti’s contention that the Payment Claim was “solely based on” the Deed of Settlement. The Adjudicator concluded as follows (at paragraph [39]):

57. [61]

    Secondly, the Adjudicator considered (at paragraph [43] and following) whether there was jurisdiction to support the making of a determination under the Act. The Adjudicator referred to the relevant provisions of the Act, determined that the claim made by Watpac for the return of the cash security was “properly based on the Contract”, referred to the decision of the Court of Appeal in EnerMech, and concluded as follows (at paragraphs [90]-[91]):

58. [62]

    Thirdly, the Adjudicator considered (at paragraph [121] and following), and rejected, Romeciti’s contention that the security under the Contract ceased to exist once the Undertaking and the Bond were cashed, stating that:

59. [63]

    Fourthly, the Adjudicator considered (at paragraph [223] and following) the terms of cl 5.4(a) of the Contract, which related to the first part of the security, and accepted Watpac’s contention that the date for “the last separable portion to achieve practical completion” was 9 March 2022. This finding was based, not only on cl 2.3(a) of the Deed of Settlement (whereby the parties agreed that 9 March 2022 was the date of practical completion), but also on the fact that Romeciti did not contend otherwise and on Watpac’s evidence in support of its claim. The Adjudicator reasoned as follows (emphasis in original):

60. [64]

    Fifthly, the Adjudicator considered (at paragraph [231] and following) the terms of cl 5.4(b) of the Contract, which related to the balance of the security, and accepted (at paragraph [242]) Watpac’s submission that the final certificate “ought to have been issued” by no later than 19 April 2024. In reaching this conclusion, the Adjudicator expressly accepted (at paragraphs [238]-[241]) each of the four contentions that had been advanced by Watpac in its Adjudication Application in support of this conclusion (see paragraph [45] above).

61. [65]

    As a result, the Adjudicator determined that, pursuant to cll 5.4(a) and 5.4(b) of the Contract, Romeciti’s “right to hold the cash generated by the call upon the undertakings ceased” (at paragraph [243]), such that Romeciti was required to return the full amount of this cash to Watpac.

62. [66]

    Sixthly, the Adjudicator determined (at paragraphs [244]-[264]) that Watpac was entitled, pursuant to cl 37.5 of the Contract, to interest:

    1. (1)

       in the case of the amount of $3,750,147 which should have been returned to Watpac pursuant to cl 5.4(a) of the Contract, from 23 March 2022 (being 14 days after the date of practical completion of the last separable portion); and

    2. (2)

       in the case of the amount of $3,750,147 which should have been returned to Watpac pursuant to cl 5.4(b) of the Contract, from 19 April 2024 (being the date when the final certificate “ought to have been issued”).

63. [67]

    On 31 March 2026, this proceeding was commenced.

64. [68]

    On 1 April 2026, Williams J made the following order:

65. [69]

    On 2 April 2026, Romeciti paid the Adjudicated Amount into Court, in accordance with Order 1(a) above.

66. [70]

    On 15 April 2026, Romeciti paid into Court the further amount set out in Order 1(b)(i) above.

The statutory framework

1. [71]

   The object of the Act is to “ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services”: s 3(1).

2. [72]

   Section 3(2) of the Act provides that the means by which the Act achieves this object is “by granting a statutory entitlement to such a payment regardless of whether the relevant construction contract makes provision for progress payments”.

3. [73]

   A “construction contract” is defined as meaning “a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party”: s 4(1).

4. [74]

   Section 8(1) of the Act provided, at the relevant time, as follows:

5. [75]

   The requirement for a “reference date” was subsequently removed from the Act, but continued to apply in the present case, by reason that the Contract was entered before this amendment: see Sch 2 to the Act, Part 2, cl 2. (All references below to provisions of the Act refer to the text of those provisions as at the time the Contract was entered.)

6. [76]

   A “progress payment” is defined to include “the final payment for construction work carried out … under a construction contract”: s 4(1).

7. [77]

   Section 9 provides the amount of a progress payment to which a person is entitled pursuant to s 8 of the Act is to be:

8. [78]

   Similarly, s 10(1) of the Act provides as follows:

9. [79]

   Section 13 deals with the making of a payment claim. It relevantly provides as follows:

10. [80]

    Section 14(1) provides that a person on whom a payment claim is served may reply to the claim by providing a payment schedule to the claimant. Section 14(2)-(3) provides as follows:

11. [81]

    In John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19 at [33], Hodgson JA (with whom Beazley JA (as her Excellency then was) agreed) rejected a submission that the words “reasons for withholding payment” should be construed narrowly and limited to circumstances where payment would be due but for a particular reason or reasons. His Honour observed as follows:

12. [82]

    Section 21(3) provides that an adjudicator is to determine an application “as expeditiously as possible”. Underpinning the statutory entitlement to progress payments is an understanding that cash flow is the lifeblood of the construction industry: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4 at [40]. Accordingly, the Act imposes “brutally fast” deadlines on the claimant, respondent and adjudicator in order to ensure the prompt resolution of payment disputes: ibid.

13. [83]

    Section 22(1)-(2) sets out the matters which the adjudicator is to determine, and the matters which the adjudicator is to consider in making that determination, as follows:

Ground 1

1. [84]

   Ground 1 of Romeciti’s challenge to the Adjudication Determination is as follows:

2. [85]

   The “statutory task of an adjudicator is to determine the claimant’s entitlement within the framework of the dispute that was propounded by the parties”: Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215 at [84] per Payne JA (with whom Ward ACJ and Basten AJA agreed). In performing the function conferred under s 22(1) of the Act, the adjudicator is required “to consider … the payment claim to which the application relates”: s 22(2).

3. [86]

   The onus to establish a failure “to consider” matters specified in s 22 of the Act is on the party asserting such a failure: Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [109] per Payne JA (with whom Gleeson JA and Griffiths AJA agreed).

4. [87]

   It is necessary to focus on the statutory language, which requires the adjudicator “to consider” the material specified in s 22 of the Act. The Court should avoid placing a gloss on the statutory language, such as treating the requirement “to consider” as requiring an “active intellectual process”, or as requiring “proper, genuine and realistic consideration”, as the risk of such an approach is “that the argument can readily shade into claims about arguments having been resolved incorrectly because misunderstood, or not really grappled with, which tends towards merits review”: Ceerose at [52]-[61]. It follows that “[i]n a practical sense, the problem for a party challenging a determination is not to identify whether the mental process undertaken by the adjudicator was ‘active’, ‘intellectual’ or ‘genuine’, but rather to identify a basis on which it could be said that consideration did not occur”: Ceerose at [62] (emphasis added).

5. [88]

   In this regard, Payne JA observed in Ceerose that:

   1. (1)

      “reasons are not necessarily, or even usually, a comprehensive statement of all aspects of a decision-maker’s thinking” (at [63]);

   2. (2)

      “the scope of the reasons will inevitably reflect the practical circumstances under which the adjudicator is operating” (at [64]); and

   3. (3)

      where there is a failure to address a particular contention in a set of reasons, there may be a range of possible explanations, only one of which is that the material was not considered (at [66]).

6. [89]

   His Honour concluded as follows (at [68]-[69]):

7. [90]

   It is well settled that the interpretation of a payment claim is a matter for the adjudicator, and that an error in interpreting the payment claim is not a jurisdictional error.

8. [91]

   The adjudicator “is to act upon his or her understanding … of the content of the payment claim”: Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd [2018] NSWCA 339 at [16] per Basten JA (with whom Meagher and Leeming JJA agreed). The Act implicitly confers on the adjudicator the power to form an opinion as to “the scope of the payment claim” for the purposes of the adjudication, and the adjudication cannot be set aside because an error of law as to the scope of the payment claim appears on the face of the record, including in the reasons of the adjudicator: ibid.

9. [92]

   In Icon at [19], Basten JA said:

10. [93]

    In short, what the adjudicator is required “to consider” is the payment claim as interpreted by the adjudicator; and any errors in the interpretation of the payment claim are errors within jurisdiction: Martinus Rail at [187], [234].

11. [94]

    Further, while s 22(2)(c) of the Act requires the adjudicator to consider only those submissions “that have been duly made by the claimant in support of the claim”, it is a matter for the adjudicator to determine whether submissions have been “duly made”. In this regard, Payne JA said in Ceerose at [31] that it is “now well settled that whether a submission referred to in s 22(2)(c) or (d) has been ‘duly made’ is a matter within the jurisdiction of an adjudicator and error in identifying a submission as having been ‘duly made’ is not jurisdictional”.

12. [95]

    The Adjudicator plainly did consider the Payment Claim and the submissions made by Watpac in support of that claim. The Adjudication Determination is replete with references to the text of the Payment Claim, consideration of the meaning and scope of the Payment Claim, analysis of the specific claims advanced in the Payment Claim and the basis for each such specific claim, and consideration of the submissions made by Watpac and Romeciti regarding those matters (see, by way of illustration only, paragraphs [1(d)], [13(5)]. [21]-[24], [33], [34]-[39], [57]-[58], [67]-[68], [70]-[73], [90], [211]-[217], [244]-[264], and [286]-[287]).

13. [96]

    In particular, the Adjudicator:

    1. (1)

       identified (at paragraphs [15]-[21]) that:

    2. (2)

       reviewed the Payment Claim and concluded that Watpac advanced the claim for return of the cash amounts held by Romeciti following the conversion of the Undertaking and the Bond, and interest thereon, “based exclusively upon the Contract” (at paragraphs [22]-[24]);

    3. (3)

       reviewed the terms of the Deed of Settlement and concluded (at paragraphs [26]-[33]) that:

    4. (4)

       reviewed the terms of Watpac’s letter to the Superintendent and “Claim Summary and Breakdown”, which accompanied its Payment Claim (see paragraphs [33]-[34] above), and concluded as follows (at paragraphs [34]-[39] of the Adjudication Determination):

    5. (5)

       on the basis of those matters, concluded that Romeciti’s submission that Watpac’s claim was made on the basis of the Deed of Settlement “cannot survive” an examination of the terms of the Payment Claim and the terms of the Deed of Settlement.

14. [97]

    Romeciti’s complaint is not, in substance, a complaint that the Adjudicator failed, as required by s 22(2)(c) of the Act, “to consider” the Payment Claim and the submissions “duly made” in support of that claim, but rather that the Adjudicator misunderstood the Payment Claim, or misunderstood the basis on which the claims in the Payment Claim were advanced. That is, the essence of Romeciti’s complaint that the Adjudicator “constructively failed to consider” the Payment Claim is that the Adjudicator came to a conclusion – namely, that the Payment Claim did not depend on the Deed of Settlement – which was at odds with the fact that the Payment Claim expressly invoked cll 2.1(c) and 2.3 of the Deed of Settlement. On this basis, Romeciti contends that the Adjudicator failed to consider “the claim actually advanced”.

15. [98]

    However, any alleged error in interpreting the Payment Claim was not a jurisdictional error (see paragraphs [90]-[94] above).

16. [99]

    Similarly, any alleged error in interpreting the Contract or the Deed of Settlement was not a jurisdictional error: Icon at [16] and [19]; Iskra v MMIR Pty Ltd [2019] NSWCA 126 at [50]-[52] per Gleeson JA (with whom Bathurst CJ and Payne JA agreed); EnerMech at [79].

17. [100]

    The particulars to Ground 1 focus on alleged inconsistencies in the Adjudicator’s reasoning on the issue of whether or not the Payment Claim depended on the Deed of Settlement (see paragraph [84] above).

18. [101]

    Any error or “inconsistency” in the Adjudicator’s reasoning in respect of this issue would not demonstrate a failure to consider the Payment Claim, or a failure to consider the submissions advanced by Romeciti and Watpac as to whether the Payment Claim was based on the Deed of Settlement.

19. [102]

    In any case, I am not satisfied that the paragraphs of the Adjudication Determination which are referred to in the particulars to Ground 1 “treat the Deed [of Settlement] in mutually inconsistent ways”.

20. [103]

    As acknowledged in particular (a) to Ground 1, and as set out above, the Adjudicator concluded that the claims made by Watpac in the Payment Claim were not based upon provisions of the Deed of Settlement.

21. [104]

    Neither of the matters in particulars (b) or (c) is inconsistent with this conclusion, or with the reasoning in support of this conclusion.

22. [105]

    First, as regards particular (b), the Adjudicator referred (at paragraph [227] of the Adjudication Determination) to cl 2.3(a) of the Deed of Settlement as providing evidence in support of Watpac’s claim, rather than as providing the source of Watpac’s claimed entitlement. This clause provided that “Romeciti agrees that … practical completion of separable portion 2 was achieved by the Contractor on 9 March 2022”. The Adjudicator described this clause as “facilitat[ing] proof of a fact associated with the Adjudication Claim” (at paragraph [227]). In coming to this view, the Adjudicator appears to have treated cl 2.3(a) as giving rise to an estoppel by deed: see Greer v Kettle [1938] AC 156 at 171 per Lord Maugham; Data Transfer Services Pty Ltd v White (2023) 111 NSWLR 25; [2023] NSWCA 16 at [28]-[39] (Ward P, Leeming JA, Griffiths AJA). This reasoning was not inconsistent with the Adjudicator’s conclusion that the claims for return of the security were based on cll 5.4(a) and 5.4(b) of the Contract, rather than upon the Deed of Settlement. The Adjudicator was here referring to a specific clause of the Deed of Settlement as the basis for establishing a fact (namely, the date of practical completion) which was essential to the determination of Watpac’s claims under cll 5.4(a) and 5.4(b) of the Contract. Further, and in any case, the Adjudicator regarded that fact as not being controversial and as being established by other evidence (see paragraph [63] above).

23. [106]

    Secondly, as regards particular (c), the Adjudicator’s finding (at paragraph [298] of the Adjudication Determination) that Romeciti breached cl 2.3(b) of the Deed of Settlement, by failing to ensure that the Superintendent issued a certificate of practical completion in the specified terms within 10 business days of the date of entry into that deed (11 July 2025) was not a finding that was foundational or critical to the determination of Watpac’s claim. The critical finding by the Adjudicator – for the purpose of determining Watpac’s claim under cl 5.4(b) of the Contract – was that the “final certificate ought to have been issued” by no later than 19 April 2024. This finding did not depend on any breach of the Deed of Settlement, which was entered more than a year after that date (see paragraphs [47]-[52] and [65]-[66] above).

24. [107]

    In each of the two respects set out above, the terms of the Deed of Settlement had what the Adjudicator described as “ancillary importance” to Watpac’s claim (Adjudication Determination at paragraph [69]).

25. [108]

    It follows that there was no inconsistency in the Adjudicator’s reasoning of the type asserted in the particulars to Ground 1. The Adjudicator considered the Payment Claim, concluded that the Payment Claim was founded on cl 5.4 of the Contract (rather than upon the Deed of Settlement), interpreted this clause, applied its elements to the facts as ascertained by him, and determined that, pursuant to this clause, Watpac was entitled to the cash held by Romeciti following conversion of the Undertaking and the Bond. The Adjudicator did not make any determination that Watpac was entitled to any amount pursuant to the Deed of Settlement. Any alleged error in respect of those matters was not a jurisdictional error.

26. [109]

    For those reasons, Romeciti has failed to establish Ground 1.

Ground 2

1. [110]

   Ground 2 of Romeciti’s challenge to the Adjudication Determination is as follows:

2. [111]

   This ground contains two main contentions: first, a legal contention that ss 8 and 13 of the Act require that, in order for a payment claim to be valid, it must assert “a claimed entitlement to a progress payment under the ‘construction contract concerned’”; and secondly, a factual contention that the Payment Claim did not assert a claimed entitlement to a progress payment under the Contract, but rather asserted an entitlement to the “encashed Security” which was based on the Deed of Settlement and on “the consequences of Romeciti’s alleged non-performance of the Deed”.

3. [112]

   For the reasons set out below, I am not satisfied that either of those contentions is established.

4. [113]

   Section 8 of the Act creates the entitlement to a progress payment. Pursuant to this provision, a person “is entitled to a progress payment”, where:

   1. (1)

      there is a construction contract;

   2. (2)

      there is an available reference date under the construction contract; and

   3. (3)

      the person has undertaken:

5. [114]

   There was no dispute that each of those elements was satisfied in the present case.

6. [115]

   The Act grants an entitlement to a progress payment, in circumstances where the requirements of s 8(1) are satisfied, “regardless of whether the relevant construction contract makes provision for progress payments”: s 3(2).

7. [116]

   Where a person is entitled to a progress payment pursuant to s 8(1), the amount of any such progress payment is to be determined in accordance with the terms of the construction contract, unless the contract makes no express provision with respect to the matter: see ss 9 and 10.

8. [117]

   Those matters are inconsistent with Romeciti’s contention that a person claiming a progress payment is required to assert “a claimed entitlement to a progress payment under the ‘construction contract concerned’”. A person who comes within s 8 of the Act may make a claim for a progress payment in circumstances where the construction contract makes no provision:

   1. (1)

      for the contractor to be paid progress payments; or

   2. (2)

      for the determination of the amount of progress payments; or

   3. (3)

      for the determination of the value of the work that has been completed.

9. [118]

   As Niall JA observed in JG King at [9], where a person issues a payment claim under the Act:

10. [119]

    Section 13(1) applies to “a person referred to in section 8(1) who is or who claims to be entitled to a progress payment” (emphasis added).

11. [120]

    Section 13(1) is “expressed in such a way to cover assertions of entitlements which may or may not prove to be well-founded”: Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135 at [30] per Free JA (with whom McHugh and Ball JJA agreed). The fact that both the entitlement, and the concomitant liability, are expressed as actual or putative entitlements and liabilities demonstrates that their existence is not a condition to the right to make a claim: BSA Advanced Property Solutions (Fire) Pty Ltd v Ventia Australia Pty Ltd (2024) 108 NSWLR 350; [2022] NSWCA 82 at [28] per curiam (Ward P, Leeming, White and Brereton JJA, and Basten AJA), referring to Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52 at [57] (Kiefel, Bell, Gageler, Keane and Gordon JJ). The reference to a person who “claims to be entitled” to a progress payment recognises that it might subsequently be ascertained, according to the procedure set out in Part 3 of the Act, that the claimant is in fact entitled to nothing: Southern Han at [60].

12. [121]

    The phrase “under a construction contract” is not used in s 13 to qualify the claim that is made, or the entitlement that is asserted, but rather the person upon whom a payment claim may be served, namely, “the person who, under the construction contract concerned, is or may be liable to make the payment”.

13. [122]

    It is no part of the object of the Act to give a party to a construction contract a right to receive progress payments from someone who is not a party. The object is limited to operating between those who are parties to a construction contract: Grave v Blazevic Holdings Pty Ltd (2010) 79 NSWLR 132; [2010] NSWCA 324 at [23] per MacDougall J (with whom Allsop P at [44] and Macfarlan JA agreed). Accordingly, if the proposed recipient of the payment claim is not a party to or liable under the construction contract, then it falls outside that statutory description: ibid at [26]. Romeciti, as a party to the Contract, met this requirement.

14. [123]

    Section 13(2) sets out mandatory requirements for a payment claim. Those requirements are that the payment claim must identify the construction work (or related goods and services) to which the progress payment relates, must indicate the amount of the progress payment that is claimed to be due, and (if the construction contract is connected with an exempt residential construction contract) must state that it is made under the Act. Section 13(2) does not require that the payment claim assert any entitlement to a progress payment under a provision of the construction contract.

15. [124]

    In order for there to be a challenge to the validity of a payment claim based on alleged non-compliance with s 13(2) of the Act, such non-compliance must be patent on the face of the payment claim; and if the claim purports “in a reasonable way to identify the particular work in respect of which the claim is made”, there will be no patent failure to identify: Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) (2005) 64 NSWLR 462; [2005] NSWCA 409 at [36] per Hodgson JA; and see also Manariti at [45]-[47].

16. [125]

    The Adjudicator considered whether the Payment Claim complied with the requirements of s 13(2) of the Act (see paragraph [84] of the Adjudication Determination). None of the grounds advanced by Romeciti relied on any alleged patent non-compliance with s 13(2) of the Act.

17. [126]

    The Act expressly recognises that a progress payment may be “the final payment for construction work carried out” (s 4(1)) and “may include … any amount that is held under the construction contract by the respondent and that the claimant claims is due for release” (s 13(3)(b)).

18. [127]

    In order for a payment claim to come within the terms of s 13(3)(b), it would be necessary for the claimant to assert that an “amount … is held under the construction contract by the respondent”. However, s 13(3)(b) is permissive in its terms, and does not restrict the scope of either s 8(1) or s 13(1).

19. [128]

    As set out above, the stated requirements for a valid payment claim do not include the identification of the source of the obligation to carry out the work or the source of the entitlement to payment: BSA at [37]. Further, the Court has preferred not to read the Act as containing implied limitations: ibid.

20. [129]

    Romeciti relied on the observation by the High Court in Southern Han at [66] that there was “an important limitation in the overall design of the Act”, namely, that “the Act is concerned to provide a statutory mechanism for securing payment of an amount claimed to be payable in partial or total discharge of an obligation to pay for work (or for goods or services supplied) imposed by the contractual force of a construction contract”. However, as Basten AJA (with whom Meagher JA and Griffiths JA agreed) said in EnerMech at [63], the High Court did not, in this passage, “purport to create an implied condition of the validity of a payment claim”. His Honour added (at [74]) that:

21. [130]

    It is uncontroversial that a progress payment cannot claim amounts which might be recoverable under the general law by way of damages, restitution or by way of an account: EnerMech at [64]. However, it is not the case that, if a claim can be said to be “properly characterised as a payment claim for damages or restitution rather than a claim for payment in discharge of a contractual obligation to pay for work”, it is not a valid payment claim for the purposes of the Act, since this would involving implying “an essential precondition [for a valid payment claim] that is not consistent with the text, context or purpose of [the Act]”: Manariti at [55]-[65].

22. [131]

    In Manariti at [65], Free JA observed that it would be inconsistent with the scheme of the Act to allow a respondent “to challenge the validity of the payment claim by invoking the construction contract with a view to demonstrating that the payment claim was not one made for payment for construction work under the contract”. His Honour added that:

23. [132]

    Accordingly, where a respondent raises, in the payment schedule, a contention that the payment claim is properly characterised as a claim for damages or restitution rather than a claim for payment under the construction contract, this is a matter for the adjudicator to determine. It is not a matter going to the issue whether the payment claim meets the requirements of s 13(1) of the Act.

24. [133]

    Any question as to whether the payment claim has been validly issued pursuant to s 13 of the Act is to be determined by reference to the language of that provision. Section 13(1) does not require that, in order for a claimant to be entitled to serve a claim for a progress payment, the claimant either (a) must positively assert, in the payment claim, that it has an entitlement to a progress payment pursuant to the terms of the construction contract, or (b) must in fact have such an entitlement. Instead, it is sufficient that the claimant is a person referred to in s 8(1) of the Act who claims to be entitled to a progress payment.

25. [134]

    For those reasons, I do not accept the legal premise on which Ground 2 is based, namely, that ss 8 and 13 of the Act require that a person issuing a payment claim assert “a claimed entitlement to a progress payment under the ‘construction contract concerned’”.

26. [135]

    For the reasons set out above when dealing with Ground 1:

    1. (1)

       the interpretation of the Payment Claim was a matter for the Adjudicator;

    2. (2)

       the Adjudicator reviewed the terms of the Payment Claim and concluded that Watpac asserted an entitlement to the return of the cash amounts held by Romeciti following the conversion of the Undertaking and the Bond, together with interest thereon, pursuant to the Contract (and not pursuant to the Deed of Settlement); and

    3. (3)

       any error in construing the Payment Claim, the Contract or the Deed of Settlement was not a jurisdictional error.

27. [136]

    That is sufficient to dispose of this issue.

28. [137]

    In any case, I am satisfied that, by the Payment Claim, Watpac asserted (or, at the very least, it was open to the Adjudicator to determine that Watpac asserted) an entitlement to the cash held by Romeciti, and to interest thereon, which was based on the terms of the Contract.

29. [138]

    The Payment Claim was expressly stated to be made under the Act and also under cl 37.4 of the Contract. This clause provided that Watpac was entitled, within 28 days after the expiry of the last defects liability period, to issue “a written final payment claim endorsed ‘Final payment’ being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract” (bold emphasis added).

30. [139]

    The words in bold are words of wide import. Watpac had provided the Undertaking and the Bond to Romeciti as “security” for the purposes of, and pursuant to the terms of, the Contract. Watpac claimed that, following the conversion of the Undertaking and the Bond, the cash proceeds held by Romeciti amounted to “security” for the purposes of the Contract, and that those cash amounts were returnable to Watpac following, respectively, the practical completion of the Project and the expiry of the last defects liability period pursuant to the Contract. This was a claim “in connection with the subject matter of the Contract”.

31. [140]

    In EnerMech at [35], Basten AJA observed that a clause of a construction contract which provided for a payment claim to include “all monies which the Subcontractor considers to be due from the Contractor under or arising out of this Subcontract” had the effect of “bring[ing] within the scheme of the [Act] the resolution (subject to specified exceptions and conditions) of all entitlements to payment under the subcontract”.

32. [141]

    As set out in paragraph [32] above, the Payment Claim expressly asserted that:

    1. (1)

       following the conversion of the Undertaking to cash, the amount of $3,750,147 represented “Security held by Romeciti” and that this amount was “returnable to Watpac under clause 5.4(a) of the Contract”; and

    2. (2)

       following the conversion of the Bond to cash, this further amount of $3,750,147 likewise represented “Security held by Romeciti”, and that this amount was “returnable to Watpac under clause 5.4(b)-(c) of the Contract”.

33. [142]

    That was, in terms, an assertion of an entitlement pursuant to the terms of the Contract.

34. [143]

    Likewise, the claim for interest in respect of each of the two amounts of cash held by Romeciti was expressed to be a claim pursuant to cl 37.5 of the Contract, and therefore was also an entitlement asserted pursuant to the terms of the Contract (see paragraph [32] above).

35. [144]

    The “Claim Summary and Breakdown” (set out in paragraph [33] above) confirmed that Watpac asserted an entitlement to the return of the security, with interest thereon, pursuant to cll 5.4 and 37.5 of the Contract.

    1. (1)

       As regards the first amount of cash, being the proceeds of the Undertaking, Watpac referred to cl 2.3(a) of the Deed of Settlement as establishing (as an evidentiary matter) that practical completion was achieved by 9 March 2022 and continued: “As such, under clause 5.4(a) and (c) of the Contract, Romeciti’s entitlement to hold that Undertaking ceased on 9 March 2022, and was due to be returned to Watpac within 14 days of that date (being by 23 March 2022)” (emphasis added).

    2. (2)

       As regards the second amount of cash, being the proceeds of the Bond, Watpac again relied on cl 2.3(a) of the Deed of Settlement as establishing the date of practical completion, in order to establish that, as a matter of fact, the defects liability period expired on 9 March 2024, and continued: “As such, under clause 5.4(b) and (c) of the Contract, Romeciti’s entitlement to hold the Bond ceased on 9 March 2024, and was due to be returned to Watpac on that date” (emphasis added).

    3. (3)

       In respect of each of the first and second amount of cash, Watpac expressly sought interest pursuant to cl 37.5 and Item 35 of the Contract, and provided calculations on this basis.

36. [145]

    Romeciti placed particular reliance on what was said to be an acknowledgement by Watpac in the Adjudication Application that its claim for “cash Security” was not based on the Contract. The relevant statement, which is set out in italics below, appeared in a section responding to an assertion by Romeciti that Watpac had been “overpaid” an amount of around $2.977m above the agreed Contract Sum (emphasis added):

37. [146]

    The statements in italics set out above were to the effect that Watpac’s claim for return of the “cash Security” was a claim which was separate and distinct from the “Contract Sum”, as referred to in both the Contract and the Deed of Settlement. It is not a statement that the claim was not brought under the Contract. Instead, as outlined above, the claim for the return of the cash security was expressly made pursuant to cll 5.4(a) and 5.4(b) of the Contract.

38. [147]

    This point is underlined by the fact that, immediately after the passage quoted above, Watpac asserted that, even if the Deed of Settlement was not enforceable, then Watpac was still entitled to be paid the amounts set out in Annexure A to the Adjudication Application, which included:

39. [148]

    Importantly, the notes to this claim (which does not depend on the enforceability of the Deed) are as follows:

40. [149]

    Accordingly, Watpac made clear in its Adjudication Application, insofar as there was any doubt about the matter, that its claim to each of the amounts of cash, and the interest thereon, were not dependent on the existence or enforceability of the Deed of Settlement.

41. [150]

    As reflected in particulars (c)-(e) of Ground 2, Romeciti devoted much of its submissions on Ground 2 to the proposition that Watpac could not, as a matter of law, have had any entitlement under cl 5.4 of the Contract to the return of these cash amounts, including because:

    1. (1)

       the Contract defined “security” by reference to the Undertaking and the Bond, and this definition could have no application to the moneys held by Romeciti following the conversion of the Undertaking and the Bond into cash;

    2. (2)

       cl 5.5 of the Contract – which provided that if Romeciti made a demand under the Undertaking or the Bond, Romeciti “does not hold the amount received under the demand on trust for [Watpac]” and was not liable to pay interest thereon – had the effect that Romeciti was “free to do what it wants with” any such cash;

    3. (3)

       following the conversion of the Undertaking and the Bond to cash, the parties entered into the Deed of Settlement, which:

    4. (4)

       it followed that the only basis for claiming an entitlement to return of the cash amounts (if at all) could be cl 2.1(c) of the Deed of Settlement, which defined those cash amounts as “Security” and provided that those amounts were “subject to … the mechanisms and the operation of clause 5 of the Contract”.

42. [151]

    It is unnecessary to engage with these contentions.

43. [152]

    The gist of Romeciti’s complaint is that the Adjudicator should have rejected Watpac’s claim to the return of the cash amounts, because the Adjudicator should have concluded that the only legal basis for the claim was under the Deed of Settlement, and therefore should have concluded that any entitlement to a progress payment did not arise under the construction contract. That is a complaint about the merits of the Adjudication Determination.

44. [153]

    The Adjudicator considered and rejected Romeciti’s submission that the Payment Claim was based on the Deed of Settlement, finding (as set out at paragraphs [60]-[66] above) that:

    1. (1)

       the Payment Claim was based on cl 5 of the Contract;

    2. (2)

       cl 5 of the Contract applied to the cash amounts held by Romeciti following the conversion into cash of the Undertaking and the Bond;

    3. (3)

       cll 5.4(a) and (b) of the Contract compelled the return of those amounts to Watpac; and

    4. (4)

       interest was payable on those amounts pursuant to cl 37.5 of the Contract.

45. [154]

    Any error of fact or law in reaching those conclusions was not a jurisdictional error.

46. [155]

    In any case, Ground 2 does not, in its terms, attack jurisdiction on the basis that Watpac did not in fact have an entitlement under the Contract for the return of the cash amounts. Instead, it attacks jurisdiction on the basis that Watpac did not assert that it had such an entitlement under the Contract.

47. [156]

    For the reasons given above:

    1. (1)

       ss 8 and 13 of the Act do not impose any requirement that Watpac assert “a claimed entitlement to a progress payment under the ‘construction contract concerned’”;

    2. (2)

       the Adjudicator reviewed the Payment Claim and determined that Watpac’s claimed entitlement to the return of the cash amounts, and interest thereon, was based on the terms of the Contract, rather than the Deed of Settlement;

    3. (3)

       any error by the Adjudicator in interpreting the Payment Claim, the Contract or the Deed of Settlement, or in addressing Romeciti’s submissions regarding the basis of Watpac’s claim, was not a jurisdictional error; and

    4. (4)

       in any case, the claim advanced by Watpac in the Payment Claim was expressed to be based (or, at the very least, it was open to the Adjudicator to determine that it was expressed to be based) on cll 5.4 and 37.5 of the Contract.

48. [157]

    It follows that Ground 2 has not been established.

Ground 3

1. [158]

   Ground 3 of Romeciti’s challenge to the Adjudication Determination is as follows:

2. [159]

   It is not apparent that Ground 3 adds anything of substance to Ground 2. Ground 3 is, in essence, a complaint that the Adjudicator failed to consider “the anterior question whether Watpac’s asserted entitlement was claimed to arise under the Contract or instead under the Deed of Settlement and the general law”. This “anterior question” is the issue that is raised by Ground 2.

3. [160]

   In respect of Ground 2, I have determined that:

   1. (1)

      the Act does not impose any requirement that, in order for a payment claim to be valid, it must assert that the claimant has an entitlement to a progress payment pursuant to the terms of the construction contract; and

   2. (2)

      in any case, by the Payment Claim, Watpac asserted (or, at the very least, it was open to the Adjudicator to determine that Watpac asserted) a claim to the cash amounts held by Romeciti, and to interest thereon, which was based at least substantially, if not wholly, on the Contract.

4. [161]

   Given those findings, any asserted error of law of the type raised by Ground 3 was of no consequence, since any consideration of the “anterior question” identified by Ground 3 would not have led to a conclusion that the Payment Claim was not a valid payment claim under the Act.

5. [162]

   Romeciti placed particular reliance on the decisions in:

   1. (1)

      Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484 at [73]-[74], where White J observed that, once recourse to security has occurred, there may be nothing in the Act permitting the contractor to undo the effect of that recourse, and that a “claim that the principal was required to reinstate security would not be a claim that the contractor was entitled to a progress payment”; and

   2. (2)

      Grocon (Belgrave St) Developer Pty Ltd v Construction Profile Pty Ltd [2020] NSWSC 409 at [23], where Ball J held that a payment claim was invalid where it was a claim for “a credit” in respect of amounts which the principal had “claimed under the bank guarantees for liquidated damages”.

6. [163]

   Those decisions are of limited assistance. Watpac did not seek, and the Adjudicator did not make, any order requiring security to be “reinstated”. Nor did Watpac seek any “credit” for amounts which Romeciti had purported to claim by way of liquidated damages. Instead, Watpac claimed, and the Adjudicator determined, that the cash amounts which were held by Romeciti following the conversion of the Bond and the Undertaking remained “security” for the purposes of cl 5 of the Contract, and that those amounts were returnable to Watpac pursuant to cl 5.4.

7. [164]

   At paragraph [63] of the Adjudication Determination, the Adjudicator stated that “[t]he ratio decidendi of the Court of Appeal’s decision in EnerMech (supra) seems, with respect, to clearly establish that a Payment Claim under the Act does not need to be ‘for construction work’ for it to be valid”. Romeciti did not dispute this proposition of law, which (as the Adjudicator noted) was confirmed in Manariti at [58].

8. [165]

   Further, at paragraph [290], the Adjudicator stated as follows:

9. [166]

   Romeciti likewise did not dispute this statement of the law. In EnerMech, the Court of Appeal rejected a contention that a payment claim, which sought to recover an amount obtained by the respondents in exercise of a contractual entitlement to have recourse to security provided by the appellant, was invalid because it was not a claim for payment on account “for” construction work or for related goods or services. The Court found this contention to be flawed on the basis that it is not a condition of the validity of a payment claim that it be demonstrably a claim “for” construction work or for related goods or services (see at [58]-[76]). In JG King, a majority of the Victorian Court of Appeal followed and applied EnerMech in upholding the validity of a payment claim in respect of amounts held by way of security and said to be owing under the contract (see, in particular, at [45] per Niall JA and at [173] per Kennedy JA).

10. [167]

    In determining that the Payment Claim was a valid claim under the Act, the Adjudicator also placed particular reliance on s 13(3)(b), “which in terms of that section enable the claimed amount to include any amount ‘that is held under the construction contract by the Respondent and that the Claimant’s [sic] claims is due for release’” (see paragraph [61] above). Again, Romeciti did not contend that the Adjudicator erred in his interpretation of this provision.

11. [168]

    In any case, even if Romeciti established some error by the Adjudicator in ascertaining or applying the principles in EnerMech or JG King, or in construing s 13(3)(b) of the Act, this would not, of itself, be sufficient to establish jurisdictional error.

12. [169]

    In Icon at [15], Basten JA observed that: “there being no review for errors of law on the face of the record, the adjudicator’s determination of legal issues will also be unreviewable”. These observations were repeated in Iskra at [40] per Gleeson JA (with whom Bathurst CJ and Payne JA agreed). Accordingly, an adjudication determination may be valid even though an adjudicator has made an error in the construction of the Act: Perform (NSW) Pty Ltd v MEV-AUS Pty Ltd [2009] NSWCA 157 at [71]-[76] per Giles JA (with whom McColl and Young JJA agreed).

13. [170]

    Romeciti submitted that the observations of Adamson JA (in dissent) in Builtcom Constructions Pty Ltd v VSD Investments Pty Ltd as trustee for The VSD Investments Trust (No 2) [2025] NSWCA 134 at [172]-[173] “identifie[d] with precision the boundary at which an unwarranted gloss on s 22 gives way to jurisdictional error”.

14. [171]

    In Builtcom, the adjudicator declined to consider certain submissions of the claimant on the basis that they were not “duly made” within the meaning of s 22 of the Act, because they relied on documentation not included in the original payment claim. In doing so, the adjudicator applied what he understood to be a rule established in John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258 (which was described in Builtcom as the “Cardno test”). At paragraphs [172]-[173], Adamson JA concluded that:

    1. (1)

       in order to exercise the jurisdiction conferred by s 22 of the Act, the adjudicator was required to consider submissions that were “duly made”;

    2. (2)

       by refusing to adjudicate on certain matters, by reason of the Cardno test, the adjudicator “misapprehended his statutory mandate in s 22”;

    3. (3)

       this error affected “the ambit of the adjudication”, by application of a limitation “which had no basis in the Act and which constituted an unwarranted gloss on the statutory words”; and

    4. (4)

       the adjudicator’s misconstruction of the Act, which led to a misapprehension of his task, was a jurisdictional error.

15. [172]

    However, the majority came to a different view on those same issues. In particular, Leeming JA (with whom Free JA agreed):

    1. (1)

       observed (at [72]-[81]) that an error as to whether or not a submission was “duly made” within the meaning of s 22 of the Act was not a jurisdictional error;

    2. (2)

       commented (at [88]) that Builtcom’s submissions involved a “leap from error of law in the application of the ‘Cardno test’ to jurisdictional error”;

    3. (3)

       said (at [91]) that an 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”, and that the adjudicator’s “decision as to those claims will ordinarily be within his or her jurisdiction”; and

    4. (4)

       held (at [94]) as follows:

16. [173]

    In determining whether an error of law which the Adjudicator is said to have committed either constituted, or gave rise to, jurisdictional error, the critical question is whether the particular error had the effect of causing the Adjudicator, for some reason other than it simply having been a mistake of law, to exceed the authority conferred on him by s 22 of the Act, with the consequence that what purported to be a determination within the scope of that authority was no more than an ostensible determination: Maxcon Constructions Pty Ltd v Vadasz (2018) 264 CLR 46; [2018] HCA 5 at [35]-[37] per Gageler J (as his Honour then was) (with Edelman J agreeing); York Property Holdings Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd [2025] QCA 251 at [27]-[31] per Kelly J (with Mullins P and Brown JA agreeing).

17. [174]

    In the present case, Romeciti submitted that the Adjudicator had failed to perform the statutory task committed to him, by reason that the Adjudicator had treated EnerMech and JG King “as if they established that a claim for the return of encashed security is, without more, valid under the SOP Act” and had thereby failed to consider and resolve “the anterior source-of-entitlement question that arises in the present case”.

18. [175]

    It was notable that Romeciti did not, in support of this contention, identify in either its written or oral submissions any paragraph or paragraphs of the Adjudication Determination in which the Adjudicator “treated” those decisions in this way.

19. [176]

    I do not accept the premises of Ground 3, namely, that the Adjudicator was obliged to consider, and that the Adjudicator failed to consider or resolve, the “anterior question” referred to in Ground 3.

20. [177]

    First, for reasons given at paragraphs [110]-[134] above, I do not accept Romeciti’s contention that the Act imposes, as a condition for the validity of a payment claim, a requirement that it specify the “source of entitlement” to payment.

21. [178]

    Secondly, and in any case, the Adjudicator did consider the “source of entitlement” which was asserted by Watpac in the Payment Claim, and determined that the claim to the cash amounts held by Romeciti, together with interest thereon, was a claim that was made pursuant to the terms of the Contract (see paragraph [96] above).

22. [179]

    Thirdly, the Adjudicator expressly considered (at paragraph [43] and following) the question whether he had jurisdiction to determine the Payment Claim, and “concluded that the Payment Claim is a valid claim under the Act” (at paragraph [90]). The Adjudicator stated that he had reached this conclusion for the following reasons:

23. [180]

    This passage of the Adjudication Determination makes clear both that the Adjudicator considered the anterior question as to whether the Payment Claim was a valid payment claim under the Act, and that the Adjudicator resolved that question not only by reference to the principles in EnerMech, but also by reference to the terms of the Payment Claim, the provisions of the Act, the provisions of the Contract and, more generally, his views as to why a claim for cashed security such as was brought in this case amounted to a progress payment claim for construction work carried out under a construction contract.

24. [181]

    Any error made by the Adjudicator in reaching those conclusions – whether an error in interpreting the Payment Claim, or in interpreting the Contract or the Deed of Settlement, or in interpreting s 13(3) of the Act, or in interpreting or applying EnerMech or JG King – has not been shown to be an error which caused the Adjudicator to exceed the authority conferred on him by s 22 of the Act, and therefore is not a jurisdictional error.

25. [182]

    It follows that Ground 3 has not been established.

Other matters

1. [183]

   Romeciti made a number of other criticisms of the Adjudicator’s reasoning in the Adjudication Determination (such as, for example, in relation to the calculation of interest). These were said to be “not pressed as free-standing merits grounds”, but rather were said to be “reinforcing indicators that the statutory task miscarried” or, alternatively, matters which “support relief under s 32A [of the Act] if the Court were not with Romeciti on all of Grounds 1-3”.

2. [184]

   In circumstances where I have determined that none of Grounds 1 to 3 is established, and none of these other matters is said to establish jurisdictional error, it is unnecessary to address these other criticisms of the Adjudicator’s reasoning.

3. [185]

   For the reasons set out above, none of the grounds of challenge to the Adjudication Determination has been established.

4. [186]

   It follows that the Summons must be dismissed, with costs. In addition, Watpac sought, and I will make, an order that the moneys paid into Court by Romeciti be paid out to Watpac.

5. [187]

   Accordingly, I make the following orders:

   1. (1)

      The Summons filed 31 March 2026 be dismissed.

   2. (2)

      The Plaintiff pay the First Defendant’s costs, as agreed or assessed.

   3. (3)

      Order that the amount of $9,457,196.52 paid into Court by the Plaintiff, pursuant to orders made by Williams J on 1 April 2026, be paid out to the First Defendant.