Rogers Construction Group Pty Ltd V Mirage Interiors & Construction Pty Ltd [2024] NSWSC 1344
Under the NSW Building and Construction Industry Security of Payments Act 1999 (SOPA), adjudicators’ determinations are limited to matters that can be reasonably contemplated by either party. However, the Court will only quash a decision based on procedural fairness in rare cases where there has been a significant departure from procedural fairness leading to substantial practical injustice.
Rogers Construction Group Pty Ltd v Mirage Interiors & Construction Pty Ltd [2024] NSWSC 1344 (Rogers v Mirage) confirms that if, in an adjudication, a party fails to make submissions about a subject in dispute that could have reasonably been contemplated, there is no denial of procedural fairness.
Background:
In Rogers v Mirage, the defendant subcontractor (Mirage) completed installation of gyprock walls, ceilings and partitions for the head contractor, Rogers Construction Group Pty Ltd.
The works were completed under two contracts, one written lump sum contract and one oral cost plus contract. When the subcontractor submitted payment claims for the completion of the works under the oral contract, the head contractor denied the existence of the oral contract.
In adjudication the adjudicator upheld the validity of the oral contract and found in favour of the subcontractor.
Supreme Court Proceedings
Rogers challenged the adjudication decision in the Supreme Court on the basis that the adjudicator considered matters not contemplated by either party. Specifically, the head contractor was not aware of the overlap between the original written contract and the oral contract, and therefore it was denied an opportunity to present submissions regarding payments already made under the original written contract.
The Court, considering the content of the head contractor’s submission, determined that the head contractor was aware of the overlap and that there was no denial of an opportunity to make submissions or a denial of procedural fairness.
Key takeaways
The Court requires a very high threshold to invalidate the adjudicators’ findings in SOPA determinations on the basis of procedural fairness.
Parties in adjudication under the SOPA regime must be acutely aware of the issues in dispute, and ensure they make submissions regarding these issues at every opportunity. A failure to make submissions on an issue is unlikely to give rise to a right to challenge an adjudication determination on procedural fairness grounds.
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