Lipman Pty Ltd v A-Civil Aust Pty Ltd

1. [1]

   By Summons filed on 2 June 2025, the Plaintiff, Lipman Pty Ltd, seeks an order setting aside, in whole or in part, an adjudication determination that was made in favour of the First Defendant, A-Civil Aust 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]

   Lipman contends that the adjudication determination should be set aside for jurisdictional error. The List Statement filed on 2 June 2025 asserted jurisdictional error on four grounds, together with a claim for misleading conduct pursuant to s 18 of the Australian Consumer Law. On 27 June 2025, Lipman confirmed that it did not advance its claim for misleading conduct in this proceeding and, on this basis, the matter was set down for hearing on 3 July 2025. On 30 June 2025, Lipman served its written submissions, together with a proposed Amended List Statement which removed its claim for misleading conduct and added a fifth ground for challenging the Adjudicator’s determination (namely, legal unreasonableness).

4. [4]

   At the commencement of the hearing on 3 July 2025, A-Civil opposed the grant of leave to amend, on the basis that A-Civil had not had sufficient time to consider or address this proposed fifth ground. I indicated that I would hear Lipman’s submissions on the issue of legal unreasonableness, in order to understand the scope of the issues raised by this ground, before ruling on whether the amendment should be allowed. Subsequently, after the morning adjournment, A-Civil proposed “a way forward”. This involved Lipman advancing submissions on the fifth ground “without having leave or otherwise to deal with the matter”, and A-Civil addressing only on the first to fourth grounds at the hearing, and providing written submissions on the fifth ground after the hearing. Lipman did not object to this proposal. I was satisfied that A-Civil’s proposal would ensure both that the hearing would proceed on 3 July 2025 and that all grounds of challenge to the adjudication determination would be addressed, and would therefore promote the just, quick and cheap resolution of the real issues in this proceeding. The hearing proceeded on this basis.

5. [5]

   A-Civil subsequently provided written submissions which addressed the issue of legal unreasonableness on 11 July 2025, and Lipman provided written submissions in reply on 18 July 2025. A-Civil did not advance, in its supplementary written submissions, any contention that it was prejudiced as a result of the fifth ground being raised by Lipman, or that it was unable to deal with that ground.

6. [6]

   In those circumstances, I have determined that the amendment should be allowed, so that all of the issues raised by Lipman in respect of the Adjudicator’s determination can be addressed. Accordingly, I will make an order to this effect.

Factual background

1. [7]

   On 8 February 2023, Lipman and A-Civil entered into a construction contract entitled “Minor Works Subcontract Agreement” (the Subcontract) for the carrying out of works by A-Civil in respect of the Eugowra Emergency Housing Project (the Eugowra Project). The Eugowra Project was a NSW Government initiative to provide temporary housing for residents of Eugowra who were affected by a devastating flood in November 2022.

2. [8]

   Schedule 2 to the Subcontract was entitled “Trade Specific Scope of Works”. It stated, relevantly, as follows:

3. [9]

   Clause 1 of the General Conditions of the Subcontract relevantly provided as follows:

4. [10]

   Schedule 15 to the Subcontract was headed “Approved Schedule of Rates” and set out hourly and daily rates for the use of various types of equipment, as well as “standown” (sic) rates. The items of equipment in Schedule 15 included a “CRUSHER r3 Kestrack”. Schedule 15 also included hourly rates for various personnel.

5. [11]

   Clause 2 of the General Conditions of the Subcontract was headed “Payment” and provided as follows:

6. [12]

   Clause 5 of the General Conditions of the Subcontract was headed “Variations” and relevantly provided as follows:

7. [13]

   On 20 March 2025, A-Civil served a payment claim on Lipman in respect of the Eugowra Project in the sum of $13,050,937.97 (excl GST) (Payment Claim).

8. [14]

   The Payment Claim was arranged by reference to three “Line Items”, as follows:

   1. (1)

      “Original Contract Works”, described as “Demolition” with a contract price of $1.00, in respect of which no claim was made;

   2. (2)

      “Approved Variations”, relating to “Demolition and Asbestos Removal”, in respect of which a claim was made in the amount of $7,995,639.59; and

   3. (3)

      “Unapproved Variations”, in respect of which a claim was made in the amount of $5,055,298.38.

9. [15]

   The “Approved Variations” related to work which had been the subject of eighteen previous payment claims. Some of those previous payment claims had been approved by Lipman and paid in full; others had been approved, but not paid in full (by reason of, for example, an asserted set-off); and others had been disputed by Lipman. The claim advanced by the Payment Claim in respect of “Approved Variations” was a claim for unpaid amounts said to be owing in respect of those previous payment claims.

10. [16]

    The “Unapproved Variations” represented amounts which had not been the subject of any prior payment claim. The list of “Unapproved Variations” included a line item with the description “Crusher Hire Cost at Cowra Tip to Process Eugowra waste”, in the amount of $4,183,140.00 (the Crusher Claim).

11. [17]

    As outlined below, the Crusher Claim was a claim for the costs of A-Civil having provided a crusher, other equipment and personnel at a waste management site in Cowra, NSW (the Cowra Tip).

12. [18]

    On 3 April 2025, Lipman served a payment schedule on A-Civil (Payment Schedule). The Payment Schedule stated that no amount was owing to A-Civil, and asserted that a sum of $9,002,971.79 (incl GST) was owed by A-Civil to Lipman.

13. [19]

    In respect of the Approved Variations, Lipman contended, inter alia, that A-Civil had charged incorrect rates for various items of equipment and had charged for various personnel in the absence of any verified basis for doing so. On this basis, Lipman asserted that it did not owe A-Civil any amount in respect of the unpaid balance of these Approved Variations, and that A-Civil was obliged to return to Lipman the amounts which it had been overpaid.

14. [20]

    In respect of each of the Unapproved Variations (including the Crusher Claim), Lipman disputed any obligation to pay A-Civil on the basis that A-Civil had failed to comply with the requirements under clause 5 of the Subcontract, submitting as follows:

15. [21]

    Further, Lipman stated, in respect of the Crusher Claim, that it “had no knowledge of this claim and is unable to comprehend what this claim is for”, adding that it “understands that this was an agreement between Cowra Council and [A-Civil] for the hire of the crusher, excavator and personnel (and is not part of the works under the Subcontract)” (Payment Schedule, [5.113], [5.115]). Lipman contended as follows:

16. [22]

    On 17 April 2025, A-Civil made an adjudication application pursuant to s 17(1) of the Act (Adjudication Application).

17. [23]

    In respect of Lipman’s claim that A-Civil was obliged to return the amounts which it had been overpaid (described by A-Civil as a “claw back” claim), A-Civil noted that, between February 2023 and April/May 2024, A-Civil had issued 15 payment claims to Lipman in respect of the Works; Lipman had issued payment schedules and recipient created tax invoices (RCTIs) in respect of those payment claims; and Lipman had made payments to A-Civil in accordance with the RCTIs (Adjudication Application, [6.1]). A-Civil stated that, in respect of this period, the difference between the amounts claimed by A-Civil ($27,966,125.79) and the amounts scheduled and paid by Lipman ($27,895,094.66), was approximately $70,000 (Adjudication Application, [6.2]-[6.3]). A-Civil attached a copy of the payment claims, payment schedules and RCTIs as Tab 50 the Adjudication Application.

18. [24]

    A-Civil further stated that it had provided to Lipman, with each payment claim, day dockets which were signed by both A-Civil’s representative and Lipman’s representative, identifying the Works carried out each day, the type of labour supplied and the number of hours worked, and the type of equipment supplied and the number of hours for which it was supplied (Adjudication Application, [6.4]-[6.5]). A-Civil submitted that, in those circumstances, Lipman had no entitlement to “claw back” any amount (Adjudication Application, [6.7]):

19. [25]

    In respect of the Crusher Claim, A-Civil submitted, relevantly, as follows (Adjudication Application, [25.1]-[25.8]):

20. [26]

    The Adjudication Application attached a statutory declaration of Mr Nasser Matta, the General Manager of A-Civil, in which Mr Matta relevantly deposed to the arrangement which had been reached with Cowra Council regarding the crushing works at the Cowra Tip and the reasons why A-Civil entered into this arrangement in respect of the crushing and disposal of waste, including waste from the Eugowra Project and waste from another project which A-Civil was performing for Lipman in respect of Cowra Hospital (the Cowra Hospital Project). Mr Matta stated as follows:

21. [27]

    On 29 April 2025, Lipman served its Adjudication Response.

22. [28]

    In respect of the Approved Variations, Lipman disputed A-Civil’s interpretation of clause 2 of the Subcontract. Lipman submitted that “progress payments are always ‘payments on account’ in the construction industry”, and that this was reflected in clause 2(d) of the Subcontract (Adjudication Response, [2.4]-[2.6]). In particular, Lipman submitted as follows (Adjudication Response, [2.7]-[2.12]):

23. [29]

    In paragraph [1.5] of the Adjudication Response, Lipman noted that the Crusher Claim represented “60-70% of [A-Civil’s] pressed claim”, and stated that this claim:

24. [30]

    Lipman elaborated on this “fundamental jurisdictional issue” at paragraphs [3.15] to [3.19] of the Adjudication Response, submitting that it was necessary for the Adjudicator to determine whether this is “actually a claim arising under a[n] agreement separate from the Subcontract”. In particular, Lipman stated as follows:

25. [31]

    Under the cover of raising this jurisdictional issue, Lipman again asserted as its “primary position” and as “a complete answer” to the Crusher Claim that A-Civil had failed to comply with the requirements for approval of variations pursuant to clause 5 of the Subcontract (Adjudication Response, [3.4]). In particular, Lipman contended as follows:

26. [32]

    Further, Lipman disputed that the Crusher Claim was “even referrable to the ‘scope’ under the Subcontract” (Adjudication Response, [3.5]), submitting that:

27. [33]

    On 23 April 2025, the Adjudicator was appointed by the Third Defendant.

28. [34]

    On 2 May 2025, the Adjudicator requested an extension of time to determine the Adjudication Application. In addition, the Adjudicator referred to the “fundamental jurisdictional issue” which had been raised by Lipman in respect of the Crusher Claim, and invited A-Civil to provide, by 6 May 2025, “a response to the concern that subject matter jurisdiction cannot exist based on the material presented by [Lipman] at Section 3 of the Adjudication Response submission”, with Lipman having an opportunity to respond to A-Civil’s further submissions the following day.

29. [35]

    On 6 May 2025, A-Civil provided further submissions in response to this request. In particular, A-Civil stated as follows:

30. [36]

    On 7 May 2025, Lipman provided a response to A-Civil’s further submissions, including the following response in respect of paragraphs [2.2] to [2.3] of those submissions:

31. [37]

    On 26 May 2025, the Adjudicator issued his determination (the Determination).

32. [38]

    The adjudicated amount of the Payment Claim was $6,882,264.97 (incl GST). The Adjudicator found that Lipman was not entitled to “claw back” any amount in respect of previous payment claims which had been scheduled and paid. The Adjudicator allowed A-Civil’s claim for the amounts outstanding in respect of previous payment claims, and also allowed the full amount of the Crusher Claim.

33. [39]

    Specific aspects of the Adjudicator’s reasoning are outlined below when dealing with the five grounds advanced by Lipman for challenging the Determination.

34. [40]

    On 2 June 2025, Lipman commenced this proceeding and sought interlocutory relief, restraining A-Civil from taking steps to obtain an adjudication certificate, or to file such certificate as a judgment, or otherwise to enforce the Determination.

35. [41]

    This relief was granted on conditions that Lipman give the usual undertaking as to damages and pay into Court the amount of $6,256,604.52 (excl GST). On 6 June 2025, an order was made varying the amount to be paid into Court to $7,073,806.93. This payment has been made.

Statutory Framework

1. [42]

   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. [43]

   Section 3(3) provides that:

3. [44]

   Section 8 provides that a person who, under a construction contract, has undertaken to carry out construction work or to supply related goods and services is entitled to receive a progress payment.

4. [45]

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

5. [46]

   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:

6. [47]

   Section 17(1) provides that a claimant may apply for adjudication of a payment claim if the respondent provides a payment schedule, and the scheduled amount is less than the amount claimed. In the present case, this provision was triggered, as Lipman’s Payment Schedule specified a nil amount in response to A-Civil’s Payment Claim, on the basis that A-Civil owed Lipman the sum of $9,002,971.79 (see paragraph [18] above).

7. [48]

   Section 21(2) 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.

8. [49]

   Section 22 sets out what the adjudicator is to determine, and what matters the adjudicator is to consider in making that determination. It provides as follows:

9. [50]

   In the event that jurisdictional error is established, section 32A provides as follows:

Grounds for Challenging the Determination

1. [51]

   At the hearing, Lipman advanced five grounds for setting aside the Determination, as follows:

Ground 1: the Determination was not a determination of the Payment Claim

1. [52]

   Lipman contended that the Adjudicator awarded the amount claimed by A-Civil in respect of the Crusher “on a fundamentally different basis to that advanced” by A-Civil in the Payment Claim, and that this constituted a jurisdictional error.

2. [53]

   Lipman’s pleading of ground 1 (Amended List Statement, [33]-[34]) identified two respects in which the Adjudicator was alleged to have “made a determination which did not relate to the claims in the Payment Claim”:

3. [54]

   An adjudication application pursuant to s 17(1) of the Act is an application “for adjudication of a payment claim”, being the particular “payment claim” which was served under s 13(1) of the Act. The adjudicator’s function is to determine the adjudication application which is referred to him or her (ss 17(6), 22(2)).

4. [55]

   Lipman submitted that it followed that an adjudicator commits a jurisdictional error where he or she awards a progress payment on a basis different to that advanced in the payment claim.

5. [56]

   Lipman referred, by way of example, to the decision of McDougall J in Leighton v Arogen [2012] NSWSC 1323. In that case, the payment claim had sought payment for variations on the basis that they were for “delay and disruption due to Cooks River Heritage Issues” (at [28]). In the adjudication application, the same claims were said to be for delay and disruption “due to (ongoing and atypical) inclement weather which was not foreseeable” (at [39]). McDougall J found that the claimant had thereby changed “the basis of its claim, in a significant way” (at [81]). His Honour held that it followed that the submissions made in the adjudication application, in support of the variations in question, could not be regarded as having been “duly made” in support of this aspect of its payment claim; that the adjudicator, by considering those submissions, failed to comply with the mandatory requirements of s 22(2)(c) of the Act; and that the adjudicator therefore did not make his determination in respect of the relevant variations “in accordance with a condition of, or within the limits of, the jurisdiction given by the Act” (at [86]-[87]).

6. [57]

   Lipman submitted that the decision in Leighton v Arogen is consistent with other decisions which have held that there is jurisdictional error where an adjudicator awards an amount not claimed by the claimant in the payment claim, or an amount exceeding that claimed in the payment claim (referring, in particular, to AM Darlinghurst Investment Pty Ltd v Growthbuilt Pty Ltd [2024] NSWSC 825 at [23] (Ball J); Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2024] QSC 16 at [96] (Wilson J); and Creative Building Services Pty Ltd v TIO Air Conditioning Pty Ltd [2016] ACTSC 367 at [48] per Mossop AJ).

7. [58]

   A-Civil did not dispute these principles, but did dispute that they had been infringed in this case.

8. [59]

   Lipman submitted that:

   1. (1)

      in the Payment Claim, A-Civil advanced the Crusher Claim as a claim for variation works, not for scope works;

   2. (2)

      in response to this claim, Lipman stated, in the Payment Schedule, that the preconditions to an entitlement to variations, which were set out in cl 5 of the Subcontract, had not been satisfied;

   3. (3)

      in the Adjudication Application, A-Civil asserted, “[f]or the first time”, that the works in respect of the Crusher were scope works;

   4. (4)

      in the Determination, the Adjudicator allowed the Crusher Claim in full, accepting that it was within A-Civil’s scope under Schedule 2 to the Subcontract;

   5. (5)

      by reason of those matters, the Adjudicator “determined a claim for scope works, whereas the [Crusher Claim in the Payment Claim] was for variation works”; and

   6. (6)

      by allowing the Crusher Claim on a basis fundamentally different to that advanced by A-Civil in the Payment Claim, the Adjudicator committed a jurisdictional error.

9. [60]

   As outlined above, the Payment Claim was divided into three parts, namely:

   1. (1)

      “Original Contract Works”, which were assigned a “Subcontract Value” of $1.00;

   2. (2)

      “Approved Variations”, which comprised items that had been the subject of previous payment claims; and

   3. (3)

      “Unapproved Variations”, which included the Crusher Claim in an amount of $4,183,140.

10. [61]

    There was evidence that the form in which this Payment Claim was submitted was largely dictated by Lipman. In particular:

    1. (1)

       Schedules 2 and 3 to the Subcontract required A-Civil to submit its payment claims via a software application known as “Payapps”;

    2. (2)

       the template for payment claims on Payapps in respect of the Eugowra Project was configured by Lipman and could not be changed by A-Civil; and

    3. (3)

       in this template, Lipman had inserted only one line item under the heading “Original Contract Works”. This line item was called “Demolition” and the amount that could be claimed was $1.00. A-Civil was unable to add any other line items under this heading and could not insert an amount greater than $1.00 in respect of the “Demolition” line item.

11. [62]

    In the first payment claim which was submitted by A-Civil in respect of works for the Eugowra Project in February 2023, the only part of the Payapps template in which A-Civil was able to insert the percentage and amounts claimed by A-Civil for those works was under the heading “Unapproved Variations”.

12. [63]

    In the second payment claim which was submitted by A-Civil, the amounts approved in respect of the first payment claim had been moved under the heading “Approved Variations” and the only part of the Payapps template in which A-Civil was able to insert a claim for work done in March 2023 was under the heading “Unapproved Variations” heading.

13. [64]

    This pattern continued for subsequent payment claims.

14. [65]

    Accordingly, the Crusher Claim, which was advanced for the first time in the Payment Claim, was included under the heading “Unapproved Variations”.

15. [66]

    In contending that A-Civil had, in the Adjudication Application, changed the basis for the Crusher Claim from a claim for variation works to a claim for scope works, Lipman focused on paragraph [25.8] of that document, which stated as follows:

16. [67]

    As the opening clause of paragraph [25.8] makes clear, A-Civil was here responding to the contention advanced by Lipman in paragraphs [5.115] and [5.119] of the Payment Schedule. Those paragraphs stated as follows:

17. [68]

    In short, Lipman contended, in the Payment Schedule, that the hire and use of the Crusher was “not part of the works under the Subcontract”, and that those works were instead performed pursuant to some other arrangement between A-Civil and a third party (namely, Cowra Council).

18. [69]

    In paragraph [25.8] of the Adjudication Application, A-Civil disputed this allegation, and asserted that the Crusher works “were part of the Works” under the Subcontract “given that they were done in connection with the demolition and remediation works”.

19. [70]

    A-Civil’s contention, in response to the issues raised by Lipman, that the relevant works were done “in connection with the demolition and remediation works” (emphasis added) did not amount to an assertion that the Crusher works were “scope” works rather than “variation” works, and did not amount to a change in the basis on which the Crusher Claim was put.

20. [71]

    Similarly, there was no change in the basis upon which the Crusher Claim was put in the further submissions provided by A-Civil on 6 May 2025. Those submissions were provided in response to the Adjudicator’s request for submissions on the “fundamental jurisdictional issue” which Lipman had raised in respect of the Crusher Claim (namely, “that subject matter jurisdiction cannot exist based on the material presented by [Lipman] at Section 3 of the Adjudication Response”).

21. [72]

    In Section 3 of its Adjudication Response, Lipman had submitted that: “The fact is [A-Civil] has done nothing to establish that the [Crusher Claim] is one that is referrable to the Subcontract” (emphasis added).

22. [73]

    In paragraph [2.2] of its supplementary submissions in response to this jurisdictional issue, A-Civil repeated the position in paragraph [25.8] of the Adjudication Application, stating as follows:

23. [74]

    Paragraph [2.3] of A-Civil’s supplementary submissions developed this contention, stating that:

24. [75]

    A-Civil was not, by advancing these submissions, making any change to the basis upon which the Crusher Claim was advanced in the Payment Claim. Instead, it was explaining why the Crusher works were, in fact, “referrable to”, or performed “in connection with”, the proper execution of the demolition works under the Subcontract.

25. [76]

    The Adjudicator rejected the jurisdictional issue which had been raised by Lipman, accepting that the Crusher works were performed in connection with the proper execution of the demolition works under the Subcontract (Determination, [25]):

26. [77]

    It does not follow that the Adjudicator determined the Crusher Claim on the basis that it was a claim for “scope” works rather than “variation” works.

27. [78]

    In determining to allow the Crusher Claim, the Adjudicator stated as follows at paragraphs [527]-[532] of the Determination (emphasis added):

    1. (1)

       the Crusher Claim was a claim “for extra work beyond that required by the contract, but otherwise contemplated under ‘The Extent of the Works’ provision that says ‘The Subcontractor shall supply everything necessary for the proper execution of the Demolition and associated works’”;

    2. (2)

       Lipman had “unreasonably refuse[d] to acknowledge and accept the variation” in respect of the Crusher works;

    3. (3)

       A-Civil sought “additional compensation for this unapproved variation”;

    4. (4)

       A-Civil had complied with the requirements under Schedule 2 concerning “the occurrence of a changed circumstance”;

    5. (5)

       A-Civil “had the consent of [Lipman]” for this “variation”; and

    6. (6)

       accordingly, A-Civil was entitled to the full amount of the Crusher Claim “as stated in the payment claim”.

28. [79]

    In submitting that the Adjudicator determined that “the [Crusher] work came within … scope works and was not a variation”, Senior Counsel for Lipman relied on the fact that the Adjudicator “made no reference to cl 5 [of the Subcontract] in allowing the claim except in two respects, which indicate that as far as he was concerned this was not a claim for a variation”. The two relevant parts of the Determination were paragraphs [571] and [587]. When those two paragraphs are read in context it is apparent that the Adjudicator accepted A-Civil’s submission that clause 5 of the Subcontract did not apply to the relevant works:

29. [80]

    The finding that clause 5 of the Subcontract did not apply to the Crusher works did not entail a finding that the Crusher works were scope works rather than variation works. In any event, the Adjudicator found that Lipman had in fact given “consent” to this “variation” (Determination, [531]). Any error in respect of those matters was not (and was not asserted to be) a jurisdictional error.

30. [81]

    For those reasons, I am not satisfied that the Adjudicator determined the Crusher Claim on the basis that it was a claim for scope works, or that he thereby allowed the claim on a basis fundamentally different to that advanced in the Payment Claim.

31. [82]

    In the Payment Claim, the Crusher Claim was described as follows: “Crusher Hire Cost at Cowra Tip to Process Eugowra Waste”.

32. [83]

    Lipman contended that the Adjudicator allowed the claim as a claim for the costs of crushing both “Eugowra Waste” and non-Eugowra waste, and therefore allowed a claim beyond that made by the Payment Claim, which constituted jurisdictional error.

33. [84]

    This submission depends on the proposition that A-Civil’s claim for “Crusher Hire Cost at Cowra Tip to Process Eugowra Waste”, properly understood, was a claim for the costs of crushing “Eugowra Waste” and nothing else. This was acknowledged in oral address:

34. [85]

    I do not accept this submission regarding the proper interpretation of the Payment Claim.

35. [86]

    As a matter of ordinary language, the words “Crusher Hire Cost at Cowra Tip to Process Eugowra Waste” did not advance, expressly or impliedly, any assertion that the crusher was used exclusively to process Eugowra waste or was supplied for the sole purpose of processing Eugowra waste. Instead, those words conveyed that a crusher was used at Cowra tip to process Eugowra waste and that the costs of this crusher hire were claimed by A-Civil.

36. [87]

    The statutory declaration of Mr Matta, which was attached to the Adjudication Application, explained the circumstances in which the Crusher works were undertaken (see paragraph [26] above). Mr Matta stated that “there was a significant amount of waste and asbestos [from the Eugowra Project] that needed to be tipped”; that the tipping facility in Eugowra would not accept this waste; and that it was therefore important to find a tipping facility which “was as close to the Project as possible”. It was for this reason that Mr Matta approached the Cowra Tip, which was a one-hour drive from Eugowra, and “negotiated with them the following arrangement in respect of the waste disposal for both the [Eugowra] Project and another project that A-Civil was working on for Lipman at the time (being the Cowra Hospital)”:

    1. (1)

       A-Civil would transport the above waste to the Cowra Tip;

    2. (2)

       once the waste was transported to the Cowra Tip, A-Civil would use its plant and equipment (namely, crusher, stacker, excavator, screener) to crush, process and sort through the waste (which could then be recycled, reused or disposed as appropriate); and

    3. (3)

       in exchange for the above, Cowra Tip would accept the waste and would charge reduced tipping rates, including (amongst other things) free tipping of general solid waste and 50% discount on brick and concrete waste.

37. [88]

    Lipman did not, in its Adjudication Response, advance any submission to the effect that the Crusher Claim, properly construed, was a claim only for the costs of crushing Eugowra waste, and not any other waste.

38. [89]

    Lipman understood that the amount claimed by A-Civil in the Payment Claim was a claim for the use of a crusher and equipment to process both “Eugowra Waste” and non-Eugowra waste (and, in particular, waste from the Cowra Hospital Project). It was on this basis that Lipman advanced the “jurisdictional issue” that the Crusher Claim was “actually a claim arising under a[n] agreement separate from the Subcontract” (see paragraphs [3.15] to [3.19] of Lipman’s Adjudication Response, quoted at [30] above).

39. [90]

    The Adjudicator allowed the Crusher Claim on the basis that the arrangement with Cowra Council was entered in pursuit of A-Civil’s obligation to process Eugowra waste. In particular, the Adjudicator:

    1. (1)

       noted that it was “not in dispute that the waste material from Eugowra had to go to a tip and that delivery of the material and the fees to the tip were costs that [A-Civil] would be entitled to claim from [Lipman] under the subcontract” (Determination, paragraph [182]);

    2. (2)

       stated that one “real alternative option to [A-Civil] was to take the material to the Cowra tip where [A-Civil] was already dumping waste from the hospital project”, and found that, “[t]o that end”, A-Civil “entered into an agreement with the council” (Determination, paragraph [183]);

    3. (3)

       found that the agreement between A-Civil and the Council was that A-Civil “would provide its crusher free of charge to crush all the agreed materials” (including from the Cowra Hospital Project) “in exchange for reduced tipping fees for the waste material from Eugowra” (Determination, paragraph [184]);

    4. (4)

       found that the Crusher Claim represented a claim for “equipment and work used by [A-Civil] in pursuit of its contractual obligation to dispose of all demolition material in a safe and compliant manner” (Determination, [187]); and

    5. (5)

       determined that “[s]ince all of this material had to be crushed in order for [Lipman] to receive the benefit of no transport fees and reduced tipping fees, [Lipman] must therefore be liable for the costs of the crusher in crushing all of the material under the agreement, not just the material tipped from Eugowra” (Determination, paragraph [190]).

40. [91]

    Having regard to those matters, I am not satisfied that the Adjudicator’s determination to award $4,183,140.00 in respect of the Crusher Claim was outside the scope of the Payment Claim.

41. [92]

    Further, even if Lipman had established that the Payment Claim was, properly construed, a claim for the costs of processing only Eugowra Waste (and not any other waste), it would not necessarily have followed that jurisdictional error was established.

42. [93]

    In Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd [2018] NSWCA 339 at [16], Basten JA (with whom Meagher and Leeming JJA agreed) observed that it is implicit in the requirement for the adjudicator to consider “the payment claim” that the adjudicator “is to act upon his or her understanding … of the content of the payment claim”. That is, “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. His Honour said (at [19]):

43. [94]

    At [32], his Honour held that:

44. [95]

    For those reasons, ground 1 has not been established.

Ground 2: misuse of section 21(4)

1. [96]

   Lipman’s pleading in respect of ground 2 was as follows (Amended List Statement, [35]-[38]):

   1. (1)

      on a proper construction of the Act:

   2. (2)

      the Adjudicator did not form any opinion that the further submissions made by A-Civil on 6 May 2025 were “duly made” and, to the extent that the Adjudicator formed any such opinion, the Adjudicator failed to proceed on a correct construction of the Act (including as set out in paragraph (1) above); and

   3. (3)

      by reason of those matters, the Adjudicator committed a jurisdictional error.

2. [97]

   Section 21(4)(a) of the Act provides as follows:

3. [98]

   I accept Lipman’s submission that the introductory words in s 21(4) indicate that this provision “is intended to facilitate the determination of an existing dispute, as it appears from the adjudication application”.

4. [99]

   In State Water Corporation v Civil Team Engineering Pty Ltd [2013] NSWSC 1879 at [44], Sackar J observed as follows:

5. [100]

   Lipman contended that the principles set out above were “infringed in this case”, submitting as follows:

6. [101]

   In oral address, Senior Counsel for Lipman accepted that the further submissions made by A-Civil on 6 May 2025 essentially repeated what had been said in the Adjudication Application, and that therefore ground 2 did not add anything of substance to ground 1:

7. [102]

   For the reasons given above, I have determined that ground 1 has not been established. In particular, I have concluded that A-Civil did not, in either the Adjudication Application or its response to the Adjudicator’s request for further submissions on the “fundamental jurisdictional issue” raised by Lipman, advance a new basis for the Crusher Claim, which was different from that advanced in the Payment Claim.

8. [103]

   Further, there was no “misuse” of s 21(4)(a) of the Act by the Adjudicator.

9. [104]

   In State Water Corporation, the respondent to a payment claim had made submissions in its adjudication response which went beyond the terms of its payment schedule as to various matters (and which were therefore prohibited by s 20(2B) of the Act); the adjudicator then purported to request submissions under s 21(4) of the Act on those very same matters; and the respondent contended that the adjudicator was therefore able to take these submissions into account. Sackar J rejected this submission (at [43]-[44]).

10. [105]

    That is far removed from the circumstances of the present case. Lipman had, in its Adjudication Response, raised a jurisdictional issue in respect of the Adjudication Application, and the Adjudicator sought submissions from A-Civil in respect of that specific issue, which A-Civil then provided (see paragraphs [34], [71]-[75] above). It follows that those submissions were requested for the purposes of determining the issues raised by the Adjudication Application and the Adjudication Response.

11. [106]

    Finally, while s 22(2) of the Act requires that the adjudicator only consider submissions “that have been duly made by the claimant in support of the claim”, it is a matter for the adjudicator to determine whether or not submissions have been “duly” made. In this regard, Payne JA said in Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) NSWLR 225; [2023] NSWCA 215 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. [107]

    In the present case, it can be inferred that the Adjudicator formed the view that the submissions made by A-Civil and Lipman in response to the Adjudicator’s request for further submissions were “duly made”, as he expressly referred to those submissions in his Determination. In any case, Lipman has not established that, in forming this view, the Adjudicator proceeded upon an incorrect construction of the Act.

13. [108]

    For those reasons, ground 2 has not been established.

Ground 3: Failure to consider various matters

1. [109]

   Lipman pleaded (Amended List Statement, [21], [39]-[42]) that the Adjudicator committed jurisdictional error by failing to consider the submissions which Lipman had advanced in its Adjudication Response in respect of various issues referred to as:

   1. (1)

      Wet hire charges;

   2. (2)

      8 Wheeler Hire;

   3. (3)

      OZ Mist discrepancy;

   4. (4)

      Off-Site General Manager (Nasser Matta);

   5. (5)

      On-Site General Manager (Tony Panetta);

   6. (6)

      On-Site Construction Manager; and

   7. (7)

      Bin Hire.

2. [110]

   As outlined below, Lipman subsequently indicated, at the hearing, that it did not press this complaint in respect of the Bin Hire issue. The remaining issues are described below as the “Miscellaneous Issues”.

3. [111]

   Section 22(2)(d) of the Act provides that an adjudicator “is to consider … the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule”.

4. [112]

   Section 22(2) identifies mandatory considerations: Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty Ltd [2005] NSWSC 1129 at [35] (Brereton J); Cockram Construction Ltd v Fulton Hogan Construction Pty Ltd (2018) 97 NSWLR 773; [2018] NSWCA 107 at [11] (Basten JA).

5. [113]

   In Ceerose, the Court of Appeal identified the difficulties faced by those asserting a failure to comply with s 22(2) of the Act. In particular, Payne JA (with whom Ward ACJ and Basten JA agreed) observed 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]);

   3. (3)

      “it is not unusual for the material supplied to an adjudicator to run into hundreds and even thousands of pages” (as was the case here) and it is “inevitable that … an adjudicator will spend more time on some items within a claim than on others” (at [65]); and

   4. (4)

      the absence of reference to a submission in the adjudicator’s determination may reflect a view that the claim is unfounded or that there is an unreviewable error explaining the absence of reference (at [66]).

6. [114]

   Nonetheless, Payne JA (at [69]) acknowledged that “failure to refer to a submission on a centrally important matter, clearly articulated and based on uncontested facts, may demonstrate a failure to consider at all”, and therefore may constitute a “breach of the duty to consider the matters set out in s 22(2)”.

7. [115]

   Lipman acknowledged that it bore the burden of establishing that the proper inference in the circumstances is that there was a failure by the Adjudicator to consider the Miscellaneous Issues.

8. [116]

   Lipman advanced, both in its Payment Schedule and its Adjudication Response, submissions in respect of each of the Miscellaneous Issues, as follows:

   1. (1)

      Wet hire charges – Payment Schedule, [5.19] to [5.27]; Adjudication Response, [7.1] to [7.5];

   2. (2)

      8 Wheeler Hire – Payment Schedule, [5.28] to [5.39]; Adjudication Response, [8.1] to [8.5];

   3. (3)

      OZ Mist Hire – Payment Schedule, [5.46] to [5.50]; Adjudication Response, [10.1] to [10.6];

   4. (4)

      Off-Site General Manager (Nasser Matta) – Payment Schedule, [5.62] to [5.71]; Adjudication Response, [12.1] to [12.6];

   5. (5)

      On-Site General Manager (Tony Panetta) – Payment Schedule, [5.72] to [5.81]; Adjudication Response, [13.1] to [13.5]; and

   6. (6)

      On-Site Construction Manager – Payment Schedule, [5.82] to [5.92]; Adjudication Response, [14.1] to [14.5].

9. [117]

   In paragraphs [498]-[500] of the Determination, the Adjudicator stated as follows in relation to the Miscellaneous Issues:

10. [118]

    In oral address, Senior Counsel for Lipman accepted that the material in footnote 21 in respect of the “Bin Hire” issue amounted to consideration by the Adjudicator of the submissions made in respect of that issue. (This item is therefore not considered further below.) However, Lipman maintained that none of the remaining Miscellaneous Issues was the subject of any “further discussion” in the Determination.

11. [119]

    Lipman’s argument on ground 3 was, in essence, as follows:

    1. (1)

       in the above passage, the Adjudicator proceeded on the basis that the Miscellaneous Issues “have been discussed previously”, and therefore that no “further explanation” or “further discussion” is “needed”;

    2. (2)

       the Adjudicator had not in fact previously “discussed” any of the Miscellaneous Issues in his Determination; and

    3. (3)

       it follows that the Adjudicator did not give any consideration in his Determination to Lipman’s submissions in respect of any of the Miscellaneous Issues, and thereby failed to comply with s 22(2)(d) of the Act.

12. [120]

    In order to address Lipman’s submissions, it is necessary to explain the relevance of the Miscellaneous Issues to the Payment Claim.

13. [121]

    None of these items was an “Unapproved Variation” which was first raised by A-Civil in the Payment Claim. (There had been a claim in the “Unapproved Variations” section of the Payment Claim for “General Manager and Construction Manager Hours”, but A-Civil indicated in its Adjudication Application at paragraph [27.1] that it did not press its claim in respect of this item for the purposes of the adjudication.)

14. [122]

    Instead, the Miscellaneous Issues were advanced by Lipman in response to A-Civil’s claim in respect of “Approved Variations”.

15. [123]

    The items listed under “Approved Variations” in the Payment Claim were eighteen previous payment claims which had been issued by A-Civil.

16. [124]

    These eighteen previous payment claims were, somewhat confusingly, numbered 1-4 and 6-19 in the Adjudication Application, and fell into two categories.

    1. (1)

       First, in respect of the fifteen payment claims numbered 1-4 and 6-16, which concerned works in the period from around February 2023 to April 2024, Lipman had issued payment schedules in amounts either equalling, or close to, the amount claimed by A-Civil, and had paid the scheduled amounts. The difference between the total amount claimed by A-Civil ($27,966,125.79) and the total amount scheduled and paid by Lipman ($27,895,094.66) was around $70,000: see Adjudication Application, [6.1]-[6.3].

    2. (2)

       Secondly, in respect of the three payment claims numbered 17-19, which concerned works in the period from May to July 2024, Lipman had not paid any amount.

17. [125]

    In the Adjudication Application, A-Civil identified that, in respect of the claim concerning the “Approved Variations”, it sought the amount of those three previous payment claims which had not been paid, namely:

    1. (1)

       the amount claimed in payment claim number 17 ($1,263,461.32), which was not approved by Lipman;

    2. (2)

       the amount claimed in payment claim number 18 ($578,451.16), which was not approved by Lipman; and

    3. (3)

       for payment claim number 19, the amount which was approved by Lipman but had not been paid ($20,793.66).

18. [126]

    In the Payment Schedule and Adjudication Response, Lipman scheduled a nil amount on the basis that there was a net amount of around $9m owing to Lipman in respect of the works under the Subcontract. As outlined below, this was, in part, due to Lipman’s contentions in relation to the Miscellaneous Issues.

19. [127]

    In an introductory section of the Payment Schedule headed “Nature of Dispute” (paragraphs [2.1]-[2.4]), Lipman stated that:

    1. (1)

       it had been retained under a head contract with the NSW Government as a “Managing Contractor”;

    2. (2)

       “transparency” in respect of costs and claims was “paramount”;

    3. (3)

       it was required under the Head Contract to establish that amounts and actual costs incurred are substantiated and reasonable;

    4. (4)

       it had been seeking, and A-Civil had failed to provide, “evidence of actual costs being properly incurred and substantiated”; and

    5. (5)

       this had led to a “dispute between Lipman and [the NSW Government] upstream in respect of [A-Civil’s] invoices”; and

    6. (6)

       Lipman had commenced proceedings against A-Civil in respect of “amounts that were overpaid to [A-Civil]”.

20. [128]

    Lipman continued as follows in a section of the Payment Schedule headed “Cross-check and verification”:

21. [129]

    In section 5 of the Payment Schedule, Lipman dealt with A-Civil’s claim in respect of “Approved Variations” and, under this heading, set out submissions in respect of each of the Miscellaneous Issues.

22. [130]

    For example, in respect of “Machinery Wet Hire Issues”, Lipman:

    1. (1)

       noted that A-Civil had claimed for wet hire rates on all plant and equipment (that is, “the rate includes for the cost of an operator under each and every item of plant and equipment”) (at [5.19]);

    2. (2)

       contended that A-Civil “should have charged for all plant and equipment at standdown rates only, with the exception of claims where there were sufficient personnel to operate the plant and equipment for the full day”, in order to reflect that “the item of plant was not being used” (at [5.20]);

    3. (3)

       contended that A-Civil had incorrectly charged for operators on all plant and equipment when, in fact, those personnel have already been charged elsewhere under other rates (at [5.21]-[5.23]);

    4. (4)

       noted that Lipman has sought, and A-Civil had not provided, particulars relating to the justification of the amounts claimed (at [5.24]);

    5. (5)

       repeated Lipman’s submissions regarding clauses 2(b) and (c) of the Subcontract, being the submissions which are set out in paragraph [128] above (at 5.27]); and

    6. (6)

       by reason of those matters, stated that, with certain exceptions, “Lipman had adjusted the wet hire rates back to standdown rates which is the agreed rate in the Subcontract” (at [5.25]-[5.26]).

23. [131]

    Similar submissions were made in respect of the “8 Wheeler Discrepancy” (Payment Schedule, [5.28]-[5.39]), with Lipman again relying on its submissions regarding clauses 2(b) and 2(c) of the Subcontract, complaining that A-Civil had failed to provide justification for the rates claimed in respect of the 8 Wheeler hire, and contending that the wet hire rates should be adjusted “to dry hire rates by deducting the cost of an operator in each instance”.

24. [132]

    In respect of the “OZ Mist Discrepancy”, Lipman submitted that the rates claimed for this industrial fog cannon were “grossly overpriced” and that A-Civil had “failed to establish that these amounts (if incurred) are reasonable, have been properly incurred and can be substantiated” (Payment Schedule, [5.46]-[5.50]). Lipman asserted that the rates which had been charged had not been agreed and referred, inter alia, to clause 2 of the Subcontract. Lipman stated that this item was “therefore … assessed as NIL”.

25. [133]

    As regards the claims for an Off-Site General Manager, On-Site General Manager and On-Site Construction Manager (Payment Schedule, [5.62]-[5.92]), Lipman noted that it had requested particulars to justify these claims, which A-Civil had not provided; relied on clauses 2(b) and 2(c) of the Subcontract; and asserted that A-Civil had “failed to establish that these amounts (if incurred) are reasonable, have been properly incurred and can be substantiated”. Lipman stated that, in the absence of any verification records, it had adjusted the claimed hours and rates to “zero” for each claim.

26. [134]

    The adjustments which Lipman contended should be made to the previous payment claims were set out in Annexure 2 to the Payment Schedule, which was headed “Breakdown” and which ran to several hundred pages. In respect of each of the payment claims which had been issued (whether it was a payment claim which had been approved and paid, or not), Lipman proposed that adjustments be made by reason of, inter alia, the Miscellaneous Issues.

27. [135]

    For example, by payment claim number 13, A-Civil had claimed the amount of $1,161,641.57 (incl GST), which Lipman had approved and paid in full. However, in Annexure 2 to the Payment Schedule, Lipman contended that there should be an adjustment of $435,055.87 (incl GST) in respect of the amounts claimed in this payment claim. This adjustment included the following reductions in respect of the Miscellaneous Issues (all figures excluding GST):

    1. (1)

       Machinery Wet Hire Issue: $92,950.00;

    2. (2)

       8 Wheeler Discrepancy: $30,800.00;

    3. (3)

       OZ Mist Discrepancy: $25,000.00;

    4. (4)

       Off-Site General Manager: $36,000.00;

    5. (5)

       On-Site General Manager: $47,475.00;

    6. (6)

       On-Site Construction Manager: $22,500.00.

28. [136]

    Likewise, in respect of payment claim number 17 (which had not been approved, and in respect of which Lipman had not paid any amount), Lipman contended that there should be a reduction of $477,494.27 applied to the amount claimed by A-Civil (namely, $1,263,461.32). This adjustment included the following reductions in respect of the Miscellaneous Issues (all figures excluding GST):

    1. (1)

       Machinery Wet Hire Issue: $43,325.00;

    2. (2)

       8 Wheeler Discrepancy: $50,820.00;

    3. (3)

       OZ Mist Discrepancy: $47,500.00;

    4. (4)

       Off-site General Manager: $68,400.00;

    5. (5)

       On-Site General Manager: $0.00;

    6. (6)

       On-Site Construction Manager: $42,750.00.

29. [137]

    As I have explained at paragraph [124] above, A-Civil did not, in its Adjudication Application, seek any payment in respect of any of its previous payment claims up to and including payment claim numbered 16 (which had, in many cases, been paid in full), but did seek payment in respect of payment claims numbered 17-19 (in respect of which no amount had been paid).

30. [138]

    In respect of A-Civil’s claim for payment of the amounts that had been claimed in payment claims numbered 17-19, Lipman did not contend that payment should be made in respect of those particular payment claims in a reduced amount, in order to take account of the adjustments which Lipman had proposed to each of those payment claims in Annexure 2 to the Payment Schedule (including by reason of the Miscellaneous Issues). Instead, Lipman contended that a nil amount should be allowed because, once the Adjudicator took into account all of the adjustments which Lipman submitted should be made to payment claims numbered 1-19, as set out in Annexure 2 to the Payment Schedule, a sum of around $9m was owing by A-Civil to Lipman.

31. [139]

    A-Civil dealt with “Previous Payment Claims and Payment Schedules” in section 6 of its Adjudication Application. A-Civil disputed that Lipman was entitled to “claw back” payments which Lipman had previously scheduled and had made to A-Civil.

32. [140]

    In particular, A-Civil submitted as follows in respect of Lipman’s reliance on clause 2 of the Subcontract (see paragraph [128] above):

33. [141]

    In addition, A-Civil responded, in its Adjudication Application, to Lipman’s submissions in respect of each of the Miscellaneous Issues: see paragraphs [13.1]-[13.7] (“Wet hire charges”), [14.1]-[14.10] (“8 Wheeler Hire”), [16.1]-[16.10] (“OZ Mist Hire”), [18.1]-[18.13] (“Off Site General Manager (Nasser Matta)”), [19.1]-[19.13] (“On Site General Manager (Tony Panetta)”), and [20.1]-[20.15] (“On Site Construction Manager”).

34. [142]

    In the Adjudication Response at paragraphs [2.3]-[2.16], Lipman responded to A-Civil’s submissions regarding Lipman’s “claw back” claim in a section headed “Schedule of rates/payments on account”. Lipman submitted that:

    1. (1)

       irrespective of whether a contract provides for a fixed lump sum or a schedule of rates, “progress payments are always ‘payments on account’ in the construction industry” (at [2.4]-[2.5]);

    2. (2)

       clause 2(d) of the Subcontract reflected that standard regime (at [2.6]);

    3. (3)

       it was unfair for A-Civil “to take the benefit of the ‘lets get going and work it out later’ regime (that is, the absence of a fixed lump sum price (risk)) but then seek to avoid the burden of a subsequent review and adjustment process as Lipman has had to endure upstream” (at [2.7]); and

    4. (4)

       the Adjudicator should reject A-Civil’s contention that the “payment on account” provision in clause 2(d) can only refer to the quality of work, because Lipman’s interpretation was “more in line with an interpretation most industry participants would arrive at” (at [2.8]-[2.12]).

35. [143]

    In addition, Lipman responded to the submissions advanced by A-Civil in respect of each of the Miscellaneous Issues: see paragraphs [7.1]-[7.5] (Wet hire charges), [8.1]-[8.5] (8 Wheeler Hire), [10.1]-[10.6] (OZ Mist Discrepancy), [12.1]-[12.6] (Off-Site General Manager), [13.1]-[13.5] (On-Site General Manager), and [14.1]-[14.5] (On-Site Construction Manager).

36. [144]

    The Adjudicator determined that Lipman was not entitled to “claw back” any amount in respect of previous payment claims that had been approved and paid by Lipman.

37. [145]

    First, the Adjudicator found that Lipman could not pass on to A-Civil any markdowns imposed by the NSW Government on Lipman, and thereby revoke Lipman’s “previous acceptance of [A-Civil’s] tendered performance”. The Adjudicator observed that the Act “does not allow or otherwise prohibits [Lipman] from making downstream claims and has no mechanism for enforcement of a determination in which an adjudicator determines a negative amount or that the claimant owes the respondent an amount of money” (Determination, [113]-[117]).

38. [146]

    Secondly, the Adjudicator accepted A-Civil’s submissions regarding the proper interpretation of clause 2 of the Subcontract. The Adjudicator found that clause 2(d) relates to the quality of the work performed by A-Civil, and “has nothing to do with [A-Civil’s] perfection of rights under clause 2(b) and [(c)] of the subcontract entitling [A-Civil] to payment” (Determination, [144]). It followed that the “payment on account immunity asserted by [Lipman] does not operate at all here in this payment dispute” (Determination, [158]).

39. [147]

    Thirdly, the Adjudicator found that the day dockets which were issued by A-Civil under clause 2(b), and signed by Lipman, amounted to a “written acknowledgment made by an authorised person of [Lipman]” which “accepted [A-Civil’s] tendered performance and did so without protest or with the reservation of any rights being made by [Lipman]” (Determination, [160]).

40. [148]

    Fourthly, the Adjudicator stated that the “day dockets represent the maximum amount [A-Civil] could claim as they are factual confirmation of the work that was done”, but they do not represent that the work was done in accordance with the contractual terms (Determination, [165]), adding that:

41. [149]

    In respect of this issue, the Adjudicator found (Determination [382]) that a review of the payment schedules issued by Lipman shows that Lipman did not reserve any rights under clause 2(b) or clause 2(c) of the Contract.

42. [150]

    Fifthly, the Adjudicator found that the RCTIs issued by Lipman in accordance with clause 2(e) of the Subcontract represented “final acceptance” by Lipman (Determination, [170]). (I will return to this finding when addressing ground 4 below).

43. [151]

    In the section of the Determination dealing with the topic of “Payments Made” by Lipman under subclause 2 of the Subcontract (paragraphs [322]-[429]), the Adjudicator concluded as follows:

44. [152]

    In short, the Adjudicator determined that, in the absence of any protest by Lipman at the relevant time, A-Civil’s entitlement to payment in respect of items claimed in earlier payment claims had been “perfected”, such that Lipman had no entitlement to revoke any such acceptance or to claw back any amount previously paid.

45. [153]

    Having regard to the matters set out above, I accept A-Civil’s submission that the likely reason why the Adjudicator stated at paragraphs [498]-[500] that there was no need for any “further explanation” in respect of the Miscellaneous Issues which had “been discussed previously”, was that the Adjudicator understood that he had dealt with Lipman’s contentions in respect of all of the Miscellaneous Issues by the findings he had made in rejecting Lipman’s “claw back” claim.

46. [154]

    In short, the Adjudicator rejected Lipman’s contention that an amount of $9m was owed by A-Civil to Lipman, such that no amount should be allowed in respect of payment claims numbered 17-19. The Adjudicator allowed, in his Determination, the full amount of each of payment claims numbered 17-19 (which are, in paragraph [630] of the Determination, referred to as payment claims 16-18, being the sixteenth to eighteenth payment claims issued by A-Civil).

47. [155]

    Lipman contended that, even if the Adjudicator’s rejection of the “claw back” claim explains why the Adjudicator did not refer to any “particular points” made by Lipman in respect of the Miscellaneous Issues, there was a jurisdictional error because:

    1. (1)

       there was a substantial denial of procedural fairness in respect of the Adjudicator’s determination of the “claw back” issue (which is the subject of ground 4, considered below); and

    2. (2)

       further, there was no consideration by the Adjudicator of Lipman’s contention that, by reason of the submissions which it advanced in respect of the Miscellaneous Issues, there should be a reduction in the amount allowed in respect of each of payment claims numbered 17-19.

48. [156]

    I am not satisfied that the proper inference in the circumstances is that there was a failure to consider Lipman’s submissions in respect of the Miscellaneous Issues, having regard to the following matters.

49. [157]

    Senior Counsel for Lipman accepted, in oral address, that there was nothing in the Payment Schedule which alerted the Adjudicator to the fact that Lipman was advancing submissions in relation to the Miscellaneous Issues both:

    1. (1)

       for the purpose of supporting a claim that A-Civil owed moneys to Lipman (and therefore a nil amount should be determined in respect of the Payment Claim); and

    2. (2)

       if the argument in subparagraph (1) was rejected, for the purpose of supporting a reduction in the amount awarded in respect of those payment claims (numbered 17-19) which had not been previously approved.

50. [158]

    In considering Lipman’s claim that adjustments should be made to the previous payment claims (including by reason of the Miscellaneous Issues), the Adjudicator plainly regarded the evidence of the day dockets as a significant matter.

51. [159]

    According to the Adjudication Application (at [6.3]-[6.4]), those day dockets were provided with each of the payment claims (including, relevantly, payment claims numbered 17-19), and set out the following matters for each day: the address at which the works were carried out; an outline of the works carried out; “the type of labour supplied and the number of hours that they were supplied (for example, 1 x Project Manager for 10 hours)”; and “the type and quantity of machinery and equipment supplied and the number of hours that they were supplied”.

52. [160]

    A-Civil relied on these day dockets in its submissions in response to the Miscellaneous Issues raised by Lipman. For example, A-Civil submitted as follows in response to the “Wet hire charges” issue (Adjudication Application, [13.3]):

53. [161]

    In the Determination (at [160]-[161]), the Adjudicator noted that:

    1. (1)

       these documents were Lipman’s “proforma day dockets, not [A-Civil’s]”;

    2. (2)

       they were signed by Lipman’s authorised representative;

    3. (3)

       there was “nothing stated by the authorised person for [Lipman] signing the docket to show that this authorised person conditioned or qualified [Lipman’s] acceptance”; and

    4. (4)

       “this written acknowledgement made by an authorised person of [Lipman] accepted [A-Civil’s] tendered performance and did so without protest or with the reservation of any rights being made by [Lipman] under the subcontract”.

54. [162]

    The Adjudicator was plainly aware of the “particular points” made by Lipman in respect of the Miscellaneous Issues, since he referred to them in his Determination at [498]-[500].

55. [163]

    It is unlikely that the Adjudicator failed to consider those submissions, as this would be inconsistent both with the Adjudicator’s acknowledgement that those submissions had been made by Lipman, and with his statements at paragraphs [498]-[500] of the Determination to the effect that he regarded those matters as sufficiently addressed by his previous findings.

56. [164]

    The more likely inference is the Adjudicator considered that it was unnecessary to consider the “particular points” made in respect of the Miscellaneous Issues – including disputes about the lack of approval for certain equipment or personnel, the hours worked, the applicable rates, or the lack of particulars – having regard to his finding that Lipman had, by signing the day dockets tendered by A-Civil, “accepted [A-Civil’s] tendered performance and did so without protest or with the reservation of any rights being made by [Lipman] under the subcontract” (Determination, [160]).

57. [165]

    This inference is supported by footnote 20 which is added to the reference to the “8 Wheeler Hire” in paragraph [500] of the Determination (which is set out at paragraph [117] above). In this footnote, the Adjudicator refers to the fact that “the use of the plant and equipment was recorded in day dockets signed by an authorised person of [Lipman]”. The Adjudicator plainly had in mind his previous findings regarding the significance of the day dockets and of their acceptance by Lipman.

58. [166]

    It is also apparent from the text of this footnote that the Adjudicator did consider Lipman’s submissions in respect of the 8 Wheeler Hire, including Lipman’s submission that A-Civil has charged “wet hire rates”, when “it should have charged … at standdown rates only” (Payment Schedule, [5.30]-[5.31]). In the footnote, the Adjudicator stated that: “in the approved schedule of rates mutually agreed by the parties, there is no stand down rate for the 8 wheeler hire”.

59. [167]

    For those reasons, I am not satisfied that the Adjudicator failed to consider Lipman’s submissions in respect of the Miscellaneous Issues, and thereby failed to comply with s 22(2) of the Act. It follows that ground 3 has not been established.

Ground 4: Denial of Natural Justice

1. [168]

   The fourth ground pleaded by Lipman is that the Adjudicator “denied natural justice” and thereby committed jurisdictional error (Amended List Statement, [43]-[45]). The particulars of this pleading are as follows:

2. [169]

   The relevant passage of the Determination reads as follows:

3. [170]

   An adjudicator must afford parties procedural fairness and in doing so must not decide an application on a basis not raised by the parties, and which could not reasonably have been anticipated by the parties, without first inviting submissions on that basis: AM Darlinghurst Investment at [25] (Ball J).

4. [171]

   There will be jurisdictional error under the Act “only if there has been a substantial denial of procedural fairness by an adjudicator in determining an adjudication application”: Demex Pty Ltd v McNab Building Services Pty Ltd (2023) 113 NSWLR 282; [2023] NSWCA 261 at [32] per Kirk JA (Mitchelmore and Adamson JJA agreeing). His Honour observed that:

5. [172]

   Further, his Honour cautioned that “to accept too readily that an adjudicator’s reasoning process goes beyond what was reasonably regarded as in play is to encourage litigation seeking to identify such errors, at the cost of the quick, interim decision-making that the Act seeks to achieve” (Demex at [98]).

6. [173]

   In order for an adjudication to be set aside for a substantial departure from the standard of procedural fairness, it must be established that this departure was material. In Demex at [34], Kirk JA observed that (citations omitted):

7. [174]

   For example, where an adjudicator was not required to address an issue in order to resolve the dispute, going further than required to confirm the position created no realistic possibility of a different outcome: Demex at [97].

8. [175]

   Lipman submitted that the Adjudicator had substantially departed from the standard of procedural fairness, and that this was material, for the following reasons:

   1. (1)

      the gist of the Adjudicator’s reasoning at paragraphs [167]-[170] of the Determination was that if a RCTI was issued following a payment schedule, then Lipman should be taken to have “finally accepted” the works the subject of the invoice, such that Lipman could not thereafter contend that payment was on account and liable to be revisited;

   2. (2)

      this reasoning “came out of the blue”, with no submission to that effect having been advanced by A-Civil or Lipman;

   3. (3)

      no reasonable person in Lipman’s position would have foreseen that the Adjudicator would take such an approach, particularly since it was “plainly wrong to suggest that the issuing of an invoice following the scheduling of an on account interim payment has the effect that, despite the reservation of right in the payment schedule, the claim is nevertheless finally accepted and cannot be revisited”;

   4. (4)

      if (as I have found) the Adjudicator determined, in respect of the Miscellaneous Issues, that Lipman had no entitlement to “claw back” any amount in respect of payment claims which had already been scheduled and paid, then the reasoning at paragraphs [166]-[170] in respect of the RCTIs was material to this conclusion; and

   5. (5)

      the Adjudicator made repeated references to the significance of the RCTIs in subsequent parts of his Determination, in particular, at paragraphs [365], [376]-[377], [384], [390]-[395], [401], [429], [448] and [472]. (It should be noted that there was no submission that Lipman was denied procedural fairness in respect of the findings made in any paragraphs other than paragraphs [167]-[170], and that reference was made to these further paragraphs solely for the purpose of establishing the materiality of the findings made in paragraphs [167]-[170]).

9. [176]

   In oral address, Senior Counsel for A-Civil accepted that his client did not advance any submission to the effect of the findings made at [167]-[170], but submitted that there was no substantial and material denial of natural justice in the circumstances of this case (emphasis added below):

10. [177]

    In paragraph [170] of the Determination, the Adjudicator made a finding that “the issuance of the RCTI by [Lipman] in accordance with clause 2(e) of the [Contract] represents final acceptance by [Lipman]”. That was not a finding which was sought by A-Civil, and Lipman did not have any opportunity to make submissions in respect of that particular finding.

11. [178]

    However, I am not satisfied that, in the circumstances of this case, any such departure from the standards of procedural fairness was substantial or material, having regard to the “rough and ready” process for which the Act provides, the submissions made by the parties, and the Determination as a whole.

12. [179]

    In the adjudication, the parties advanced competing constructions of clause 2 of the Subcontract (of which clause 2(e) is a part). In particular, Lipman placed reliance, in the Payment Schedule, on clause 2 in asserting its entitlement to adjust various amounts which A-Civil had claimed in prior payment claims, and which Lipman had paid, in respect of the Miscellaneous Issues.

13. [180]

    A-Civil addressed Lipman’s “claw back” claim in Section 6 of the Adjudication Application (headed “Previous Payment Claims and Payment Schedules”). In that section, A-Civil made a number of submissions regarding the proper interpretation and application of clause 2 of the Subcontract.

14. [181]

    This section of the Adjudication Application commenced with the following paragraph, which referred to the RCTIs issued by Lipman:

15. [182]

    A-Civil attached copies of the previous payment claims, payment schedules and RCTIs at tab 50 to the Adjudication Application. The Adjudicator confirmed in the Determination that he had reviewed these documents, in considering the dispute outlined above. For example, he stated as follows at paragraph [366]:

16. [183]

    Accordingly, the Adjudicator’s finding regarding the significance of the RCTIs for clause 2(e) of the Subcontract, while not the subject of any specific submissions, was made in a context where the Adjudicator was required to determine the proper construction of clause 2 and its application to the process which had been adopted by A-Civil and Lipman (including the issuing of RCTIs by Lipman), and was provided both with submissions regarding the course of conduct between the parties and with the relevant documents, including the RCTIs (which he reviewed).

17. [184]

    As I have set out at paragraphs [144]-[153] above, the Adjudicator rejected Lipman’s assertion that it was entitled to “claw back” amounts which had been the subject of previous payment claims for a number of reasons. These included that:

    1. (1)

       Lipman did not have an entitlement to make “downstream” claims by reason of any markdowns imposed by the NSW Government or otherwise;

    2. (2)

       clause 2(d) of the Subcontract, upon which Lipman relied, relates only to the quality of work performed by A-Civil, and has nothing to do with the perfection of rights under clauses 2(b) and 2(c); and

    3. (3)

       A-Civil’s rights to payment under clauses 2(b) and 2(c) had been perfected in circumstances where:

18. [185]

    In addition, the Adjudicator found that the issuing of the RCTIs by Lipman constituted “final acceptance” by Lipman of the claimed and paid amount (Determination, [170]).

19. [186]

    The question of whether an RCTI issued under clause 2(e) of the Subcontract was “deemed” to constitute a “final” acceptance by Lipman was not a question which the Adjudicator was required to address in order to resolve the dispute between the parties regarding Lipman’s entitlement to “claw back” any amount from A-Civil, and the Adjudicator’s determination of this dispute was not dependent on his finding on this question.

20. [187]

    This dispute was, in substance, determined by the Adjudicator’s rejection of Lipman’s contention that the effect of clause 2(d) of the Subcontract was that all payments made were “on account”, and by the Adjudicator’s finding that there had been no protest or reservation of rights by Lipman when it signed the day dockets on which the payment claims were based, or when Lipman provided its assessment of the payment claims in the payment schedules.

21. [188]

    In paragraphs [427]-[429] of the Determination (quoted in paragraph [151] above), the Adjudicator summarised his conclusions in respect of this dispute. His key findings were that he did not accept Lipman’s interpretation of clause 2 of the Subcontract; that A-Civil’s entitlement to payment in respect of previous payment claims was “perfected” under that clause when Lipman issued the corresponding payment schedules which amounted to “acceptance” of the claim made; that Lipman was thereby “obligated … to make payment”; and that Lipman could not now revoke its acceptance (the payment schedules) or the payment made in accordance with the RCTIs issued consequent upon the payment schedules.

22. [189]

    The various other paragraphs of the Determination on which Lipman relied (see paragraph [175] above) do not establish that the finding in paragraph [170] was key to the Adjudicator’s reasoning.

    1. (1)

       Paragraph [365] records that Lipman provided A-Civil “with a payment schedule on 28 February 2023 and made a payment to [A-Civil] in accordance with the payment schedule under a RCTI issued by [Lipman]”. The Adjudicator described these actions by Lipman as actions taken under clause 2(a) of the Subcontract which required Lipman to “assess” the payment claims made by A-Civil. It appears that, from the Adjudicator’s perspective, the key document setting out Lipman’s assessment of A-Civil’s claims was the payment schedule, with the payment subsequently being made under the RCTI being a payment “in accordance with the payment schedule”.

    2. (2)

       In paragraphs [376]-[377], the Adjudicator stated that, “in issuing payment schedules and RCTIs”, Lipman made an assessment of A-Civil’s payment claims in accordance with clause 2(a) of the Subcontract. However, the Adjudicator again identified the issuing of an RCTI as an administrative step taken in order to effect payment of the amount which has been assessed in the payment schedule, stating that: “The tax invoices issued by [Lipman], also known as Recipient Created Tax Invoices, are issued under the payment schedule and are the only documents under which [Lipman] makes payment under the [Contract]”.

    3. (3)

       In paragraphs [381]-[384], the Adjudicator found that Lipman did not reserve any rights under clause 2(b) or 2(c) of the Subcontract when issuing the payment schedules and, in addition (“moreover”), did not state that any rights were reserved when making a payment under the corresponding RCTIs. The Adjudicator placed reliance on the absence of any indication in the payment schedules or the RCTIs that Lipman “intend[ed] to preserve its right to maintain the contractual assessment process under clause 2(a) of the subcontract by protesting the entitlement created by [A-Civil] under clause 2 subclauses (b) and (c) of the subcontract”. This reasoning did not involve, or depend on, any finding that the RCTI issued under clause 2(e) was “deemed” to be a “final” acceptance.

    4. (4)

       Paragraphs [390]-[395] repeat the Adjudicator’s view that each of the RCTIs indicated that Lipman had made an assessment and had approved the amount set out in the corresponding payment schedule. These paragraphs otherwise refer to the tax implications of the RCTIs.

    5. (5)

       Paragraph [401] repeats that, in “providing the payment schedules to [Lipman]” and in issuing RCTIs “thereunder”, Lipman set out its “assessment” of A-Civil’s payment claims.

    6. (6)

       Paragraph [448] refers to the information available to Lipman “before issuing the payment schedule and the resulting RCTI leading to payment by [Lipman]”. This again characterises the RCTI as a document which is consequent upon the payment schedule in which Lipman sets out its response to the payment claim. Likewise, paragraph [472] refers to Lipman “issuing the payment schedules and the resulting RCTIs” as “the contractual mechanism for payment by [Lipman] under clause 2(c) of the subcontract”.

23. [190]

    Having regard to those paragraphs, and the Determination as a whole, it is apparent that the Adjudicator regarded the payment schedules as the documents which set out Lipman’s substantive assessment of the corresponding payment claims, with the “resulting” RCTIs which were issued “under” those payment schedules being a necessary administrative step in order for payment to be made to A-Civil in accordance with the assessment made in the payment schedules. The Adjudicator regarded the absence of protest in either the payment schedules or the “resulting” RCTIs as establishing that A-Civil’s claim had been accepted and its right to payment had been perfected. This reasoning was not reliant on any finding at paragraphs [167]-[170] to the effect that the RCTI was “deemed” under the Subcontract to constitute a “final” acceptance.

24. [191]

    For those reasons, I am not satisfied that there was any substantial and material denial of natural justice. It follows that the fourth ground has not been established.

Ground 5: Legal Unreasonableness

1. [192]

   The fifth ground pleaded by Lipman is that the Adjudicator “infringed the principles of legal unreasonableness in determining the Crusher Hire Costs claim” (Amended List Statement, [46]).

2. [193]

   In Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [79]-[80], Payne JA (with whom Gleeson JA and Griffiths AJA agreed) observed that:

   1. (1)

      considerable care is warranted in addressing a complaint of judicial review on the ground of legal unreasonableness, lest the review for jurisdictional error slide impermissibly into merits review;

   2. (2)

      there is usually a high threshold for a conclusion that a power has been unreasonably exercised as a matter of law; and

   3. (3)

      these principles of judicial restraint in finding jurisdictional error on the basis of legal unreasonableness apply even more stringently in addressing an adjudicator’s decision made under the Act.

3. [194]

   In Pinnacle Construction Group Pty Ltd v Dimension Joinery & Interiors Pty Ltd [2018] NSWSC 894 at [90], Stevenson J observed that “it would require a most extraordinary case for a court to find an adjudicator’s decision to be unlawful because it is irrational or fails to disclose a logical connection between the findings made and the evidence”.

4. [195]

   Situations in which a decision may be found to be legally unreasonable include:

   1. (1)

      if it is not “open to the [decision-maker] to engage in the process of reasoning in which it did engage and to make the findings it did on the material before it”: Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611; [2010] HCA 16 at [133] per Crennan and Bell JJ;

   2. (2)

      “if it is shown ‘to be arbitrary or capricious or to abandon common sense’, or if it ‘lacks an evident and intelligible justification”: King v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCAFC 152 at [54] (Anderson, Feutrill and Raper JJ);

   3. (3)

      if there is no “logical pathway” from the material before a decision-maker to the conclusion reached: Ayoub v Minister for Immigration and Border Protection [2015] FCAFC 83 at [52] (Flick, Griffiths and Perry JJ); or

   4. (4)

      if the decision-maker gives weight to a consideration to which no weight ought reasonably have been given: Plaintiff M19A-2024 v Minister for Immigration and Multicultural Affairs [2025] HCA 17 at [2]-[3], [10]-[11] (Gageler CJ, Steward, Gleeson, Jagot and Beech-Jones JJ).

5. [196]

   In its written submissions, Lipman contended that the legal unreasonableness in this case “arises in multiple ways”, namely:

6. [197]

   These contentions depended on a number of anterior propositions.

7. [198]

   First, Lipman submitted that the Payment Claim identified the claim as being for “Crusher Hire Cost at Cowra Tip to Process Eugowra Waste”, and the claim “was thus put as a claim for costs ‘to Process Eugowra Waste’, not a claim to crush other waste” (emphasis added). I have already considered, and rejected, a similar submission at paragraphs [82]-[95] above. In any event, it was a matter for the Adjudicator to determine the scope of the Payment Claim and the Payment Schedule, including the scope and content of the dispute between the parties (Martinus at [80]).

8. [199]

   Secondly, Lipman referred to Mr Matta’s evidence that the arrangement which was negotiated with Cowra Council was an “arrangement in respect of the waste disposal for both the Project and another Project that A-Civil was working on for Lipman at the time (being the Cowra Hospital)”, and submitted that “there was no rational or reasonable conclusion” from this evidence that A-Civil entered into the Crusher arrangement “for the sole purpose of discharging its scope of the [Subcontract]” (emphasis added), as distinct from “the mixed purpose of discharging its scope of the [Subcontract] and its scope in respect of the Cowra Hospital project”.

9. [200]

   Lipman did not identify any paragraph of the Determination in which the Adjudicator had made a finding that the arrangement was entered for the “sole purpose” of crushing Eugowra waste.

10. [201]

    A-Civil did not make any submission to the Adjudicator, based on Mr Matta’s evidence, to the effect that the Crusher arrangement was entered for this “sole purpose”.

11. [202]

    Instead, A-Civil relied on Mr Matta’s evidence as establishing that the Crusher works “were part of the Works [under the Subcontract] given that they were done in connection with demolition and remediation works” (see Adjudication Application, paragraph [25.8], which is quoted in paragraph [66] above). Similarly, in the further submissions made by A-Civil on 6 May 2025 on the “jurisdictional issue”, A-Civil submitted that the Crusher works “were necessary for the proper execution and completion of the demolition and associated works, particularly given that the waste and asbestos generated or removed from various sites in the Project needed to be transported to a waste management tipping facility”. The Adjudicator accepted these submissions and determined that the Crusher Claim represented a claim for “equipment and work used by [A-Civil] in pursuit of its contractual obligation to dispose of all demolition material in a safe and compliant manner” (Determination, [187]).

12. [203]

    Thirdly, Lipman submitted that it was “commercially absurd” for the Adjudicator to find that Lipman was obliged, under the Subcontract, to pay costs incurred by A-Civil in discharging its obligations under “a distinct lump sum contract for a distinct project” (namely, the Cowra Hospital Project). Lipman submitted there was no rational or reasonable interpretation of the Subcontract which would support this outcome.

13. [204]

    This submission depends on two propositions, namely:

    1. (1)

       the costs of crushing and disposing of waste from the Cowra Hospital Project at the Cowra Tip were included in the scope of works for the Cowra Hospital Project; and

    2. (2)

       the Adjudicator was informed that this was the case.

14. [205]

    Neither proposition is established on the evidence. In its written submissions in respect of ground 5, A-Civil noted that:

    1. (1)

       the contract for the Cowra Hospital Project was not before the Adjudicator (and therefore the actual scope of works or “lump sum” price of that contract was not before the Adjudicator);

    2. (2)

       Mr Matta did not state, in his Statutory Declaration, that the disposal of waste from the Cowra Hospital Project was within the scope of work for that project, but only that there was a need for waste disposal in respect of the Cowra Hospital Project; and

    3. (3)

       although A-Civil’s tender for the Cowra Hospital Project was before the Adjudicator, it did not describe any part of the works or identify any allowance for the crushing or disposal of waste. The tender did state that crushing works to “produce product” for “use for the next stage of the [Cowra Hospital Project]”, such as “Compound Areas, parking, access ways, etc”, were “INCLUDED”. Plainly, any material crushed for this purpose would be retained at the site, rather than disposed of at any waste facility.

15. [206]

    Lipman did not, in its written submissions in reply on ground 5, dispute any of the matters set out in the previous paragraph.

16. [207]

    Instead, the focus of Lipman’s submissions was that it was legally unreasonable for the Adjudicator to conclude that the Crusher arrangement with the Cowra Tip led to “great savings benefits” for Lipman, without identifying what the approximate costs would otherwise have been. In particular, Lipman submitted as follows:

17. [208]

    I do not accept this submission.

18. [209]

    First, as a general matter, I do not accept that it is necessary to make a finding regarding the approximate cost of each of two alternative options, in order to conclude that one option would be significantly more expensive than the other. Judges in this Court regularly determine that one case management option would better promote the cost effective resolution of the proceedings than another, without having first made any finding regarding the approximate cost of each option.

19. [210]

    Secondly, the likely reason that the Adjudicator did not determine the “approximate cost” of the counterfactual was that he formed the view that it was a practically impossible method of performance. In particular, the Adjudicator stated as follows in paragraph [182] of the Determination (emphasis added):

20. [211]

    Similarly, the Adjudicator stated as follows in paragraph [187] of the Determination (emphasis added):

21. [212]

    Given those findings, there was no logical requirement for the Adjudicator to price this practically impossible option before reaching the view that the arrangement at the Cowra Tip achieved significant benefits for Lipman.

22. [213]

    Insofar as the Adjudicator drew on his own experience and expertise in forming his opinion that the Canberra alternative was practically “impossible”, he was entitled to do so. In Demex at [23]-[24], Kirk JA made the following observations:

23. [214]

    Thirdly, the Adjudicator’s conclusion that the arrangement achieved benefits for Lipman, in terms of saving costs and time, was supported by the Statutory Declaration of Mr Matta, upon which the Adjudicator relied.

24. [215]

    Lipman contends that it was legally unreasonable to accept Mr Matta’s “assertion” to this effect. However, this characterisation of Mr Matta’s evidence does not take account of the following matters with respect to his statutory declaration:

    1. (1)

       Mr Matta gave evidence that he had been “working in the demolition and earthworks industry for over 20 years”, including working on over twenty projects for Lipman, and that representatives from Lipman had indicated at a site meeting prior to the commencement of the Eugowra Project that they wanted Mr Matta “to help in overseeing and managing the works at the Project (both on-site and off-site) given [his] knowledge, experience and expertise”;

    2. (2)

       Mr Matta gave evidence of his role and responsibilities in respect of the Eugowra Project, including overseeing and supervising the works, allocating resources, coordinating site teams, and assisting in developing procedures and methodologies to ensure the works were done in a safe, controlled and efficient manner; and

    3. (3)

       Mr Matta explained the basis for his conclusion that there was a cost saving to Lipman in entering into the Cowra Tip arrangement:

25. [216]

    I am not satisfied that, in circumstances where Mr Matta identified his experience and identified the basis of his opinion, it was legally unreasonable for the Adjudicator to take this opinion into account in reaching his conclusions in respect of the Crusher Claim (see, for example, Determination at [530]).

26. [217]

    Finally, in concluding that there were significant benefits and savings for Lipman from A-Civil’s entry into the Cowra Tip arrangement, the Adjudicator took into account views to that effect expressed in contemporaneous documentary evidence (Determination, [528]):

27. [218]

    Having regard to those matters, I reject Lipman’s submission that it was “logically impossible and legally unreasonable” for the Adjudicator to conclude that there were savings benefits for Lipman as a result of the Cowra Tip arrangement.

28. [219]

    It follows that ground 5 has not been established.

29. [220]

    For the reasons given above, Lipman has not established jurisdictional error in respect of the Adjudicator’s Determination.

30. [221]

    Accordingly, I make the following orders:

    1. (1)

       Grant leave to file an Amended Technology and Construction List Statement in the form set out in pages 22-35 of the Court Book.

    2. (2)

       The Summons filed 2 June 2025 be dismissed.

    3. (3)

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