The Construction Contracts Act 2004 (WA) (CCA) sets up a security of payment dispute resolution system by which parties to a construction contract can apply to an independent adjudicator for resolution of payment disputes.
A typical adjudication applicant is a construction contractor or subcontractor who has been denied full payment on a progress claim.
Below is a series of questions that applicants frequently ask about the process.
As you will see, preparing an application for adjudication requires considerable work. Lavan’s Construction and Infrastructure team has significant experience with adjudications and can assist you with preparing such an application.
NOTE: This document is not intended to provide legal advice. It is not a substitute for reading the CCA itself, nor for taking legal advice. Please contact Lavan’s Construction & Infrastructure team if you need legal advice or assistance relating to any adjudication matter.
The application must be prepared and served within 90 business days after the payment dispute arises. The definition of business days, excludes weekends, public holidays and the period 25 December to 7 January (inclusive).
For ordinary payment claims (for money), a payment dispute arises upon the earlier of:
Be wary of informal disputes (e.g. oral or email rejections of payment claims) that might “start the clock” running earlier than anticipated.
Note that different provisions apply to applications relating to return of retention and security.
To successfully bring an adjudication application, you must achieve each of the following within the 90 business day period referred to above:
If an adjudication application is still on foot, or has previously been determined in relation to specific payment claims, generally you are not eligible to lodge an application covering the same payment claims or same payment dispute.[5]
So long as you have not previously adjudicated a payment claim before, you may be able to include it in your application.
In 2016, amendments to the CCA were introduced that are intended to permit an applicant to include in an adjudication application a payment claim which had been previously disputed or not paid (but not dismissed or determined by adjudication) and a further claim for the whole or part of the same amount or obligation had been made again under the contract (traditionally called recycled claims).[6]
If the dispute is the subject of an order, judgment or other finding by an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract, then you are not eligible to lodge an adjudication application.[7]
However, if no such order, judgment or finding is in place, then you may be eligible to lodge an adjudication application even if arbitration or litigation proceedings are on foot.
A registered adjudicator appointed under the CCA adjudicates the application.
Most commonly, the contract will nominate a prescribed appointor or a particular adjudicator. Provided that the contractual nomination is valid (and the relevant nominees are registered under the CCA), generally that will bind you.
Alternatively, if the contract is silent on the prescribed appointor or adjudicator, you will need to choose a prescribed appointor from the current list in the Construction Contracts Regulations 2004 (WA) (CCA Regulations), namely: The Australian Institute of Building, Australian Institute of Project Management, The Australian Institute of Quantity Surveyors, Electrical and Communications Association of Western Australia (Union of Employers), The Institute of Arbitrators and Mediators Australia, Master Builders Association of Western Australia (Union of Employers), RICS Australasia Pty Ltd and The Royal Institute of Architects.[8]
The application should set out, or attach to it, the following main details:
Please be aware that failure to comply with the above requirements can be fatal to your application. However, recent changes to the CCA, suggest that adjudicators have the jurisdiction to continue determining the payment dispute if there is substantial compliance with these requirements.
Best practice is to put in the following as part of the application:
It is vital that any application be served in accordance with legal requirements for proper service. The method of service depends on who you are serving, and it can differ depending on whether you are serving a corporation, an individual, a partnership and so on. Generally service by post or email should be avoided. The best method is delivery by hand.
Note that if you are serving a party based interstate you will need to allow yourself extra time to effect service.
Generally, the parties involved in a dispute are liable to pay the costs of the adjudicator in equal shares.[10] Frequently, adjudicators will ask for a deposit or security for costs to be provided.
The adjudicator is to make a determination within 10 business days after the date of the service of the response, or if there is no response served, then 10 business days after the last date on which a response is required to be served.[11]
Note that the adjudicator may seek the consent of the parties to extend the time for making a determination.[12]
If your application succeeds and you receive an adjudication determination in your favour, it is necessary to file a copy of the determination certified by the Building Commission and an affidavit that the amount has not been paid with the relevant court.[13] Upon filing the determination, it will be taken to be an order of the court and may be enforced.[14]
Depending on the findings of the adjudicator, you may be able to apply to the State Administrative Tribunal for review of a dismissal or the Supreme Court for review of a determination.
The Construction and Infrastructure team at Lavan is well versed in the adjudication landscape in Western Australia, and is able to assist in the preparation of adjudication applications as well as enforcement.
We regularly attend meetings of The Institute of Arbitrators and Mediators (IAMA) and occasionally give technical presentations to their adjudicators on matters of construction law. Therefore, we are familiar with many of the key IAMA personnel and often we are able to offer insight as to how a particular adjudication may be approached.
[1] CCA s 6.
[2] CCA s 26(1)(a).
[3] CCA s 26(1)(b).
[4] CCA s 26(1)(c).
[5] CCA s 6(2), 57.
[6] CCA s 3.
[7] CCA s 25.
[8] Construction Contracts Regulations r 11.
[9] CCA s 26(2)(b),(c).
[10] CCA s 44(6).
[11] CCA s 31.
[12] CCA s 32(3)(a).
[13] CCA s 43(2).
[14] CCA s 43(3).
