WA: Respondent to Comply with Determination

Adjudication

The adjudicator's determination is legally binding on the parties to the construction contract under which the payment dispute arose, and any payment awarded is due on account.

This is the case even where separate proceedings relating to the payment dispute have been commenced before an arbitrator or court.

Unless those proceedings resulted in a decision being made regarding the payment dispute, the adjudicator’s determination is still binding. The decision of an adjudicator can only be appealed or reviewed in very limited circumstances.

Where the respondent is to make a payment to the applicant, the applicant should forward the respondent:

  • a copy of the adjudication determination (this helps avoid a dispute over date of receipt of the determination); and
  • an invoice totaling the adjudicated amount, any fees and charges of the adjudicator prepaid by the applicant and payable by the respondent, including any interest awarded by the adjudicator (calculated to the date of the invoice).

It is not uncommon for a respondent to make a "part-payment" during the course of the adjudication proceedings. However, it is the adjudicator's obligation to determine the matter on the basis of the adjudication application and not some lesser (or greater) amount. In this case the applicant should reduce the amount invoiced to the respondent by the amount of the "part-payment".

If the adjudicator determines the applicant has no entitlement to payment, the determination may still require the respondent to pay some component of the costs of the adjudication. Recovery of such costs is available to the applicant under the Act.

As the debt created by the adjudication determination is a statutory debt, it is generally easy to enforce in the court. Concurrent proceedings whether they be mediation, arbitration, expert determination or litigation can't prevent the adjudication proceeding or the effect of the adjudication determination.

A court is most likely to enforce an adjudication determination. Generally an application not to enforce (e.g. by seeking an injunction) must be made to the Supreme Court and is expensive and difficult to win. However some grounds on which a court may intervene include:

  • there was no construction contract (within the meaning of the Act) between the parties;
  • the respondent was not served with a valid payment claim under the Act;
  • the applicant is guilty of fraud;
  • within the requirements of the Act, the adjudicator failed to treat any party fairly (natural justice).

Generally adjudicator error, unless it goes to jurisdiction, is insufficient to attract court intervention. In most cases it is quicker and more cost effective to comply with the adjudication determination and sue separately for repayment of any alleged overpayment. In all such matters legal advice should be taken from a lawyer who is familiar with the building and construction industry and the Act.

A respondent who is dissatisfied with the adjudicator's determination and has paid the amount due to the applicant has the option of suing separately (or exercising any other dispute resolution rights as described in the contract) for repayment of any alleged overpayment. However it is the respondent (not the applicant) who is now "out of pocket" and must prove the case, with all the prospects of the delay, cost and stress involved.

Similarly, if the applicant considers that any amount determined by the adjudicator is too little, the applicant can sue (or exercise any other dispute resolution rights as described in the contract) for the balance, but that claim cannot be a claim under the Act.

Please move to the next step on the WA flowchart being EITHER "Full adjudicated amount, including interest & adjudication fees, paid. Payment Process under the Act complete" OR "Respondent does NOT pay full or any part of adjudicated amount, including any adjudication fees & interest", whichever is applicable.

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