The New South Wales Court of Appeal’s decision in Martinus Rail Pty Ltd v Qube Services (No 2) Pty Ltd [2025] NSWCA 49 further demonstrated how difficult it is to successfully challenge an adjudication determination under the Building and Construction Industry Security of Payment Act 1999 (NSW). One critical aspect of the decision is the manner in which the Court of Appeal approached the allegation that the Adjudicator did not consider a submission ‘duly made’.
Adjudicator’s Duty to Consider
The Adjudicator has a duty to consider the matters in section 22(2) of the Act, which includes submissions ‘duly made’. An issue in Martinus was whether the Adjudicator failed to consider submissions duly made because of the absence of any reference to those particular submissions in the reasons.
The Court of Appeal held at [69], that even if an adjudicator did not refer to a submission that is not enough and that:
“…Often it will be equally likely that an adjudicator who does not refer in reasons to a particular matter mistook the facts or misunderstood the contractual provision or the legal principle to be applied, as that he or she did not consider the factor at all.”
This in effect enables the Court wide discretion to infer other possibilities are open, and that as a consequence, a failure to consider cannot be established.
A Rare Case Requires ‘Uncontested Facts’
The Court of Appeal in Martinus went on to apply Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215 at [69] to describe a ‘rare’ case which may constitute jurisdictional error which requires the failure to consider a submission be:
- a centrally important matter;
- clearly articulated; and
- based on uncontested facts.
Items 1 and 2 seem uncontroversial. However, to require the submission to be based on ‘uncontested facts’ puts the bar very high and seems to be limited to clearly identified ‘agreed facts’. Nevertheless, this approach seems to have already been applied in the decisions of Builtcom Construction Pty Ltd v VSD Investments Pty Ltd [2025] NSWSC 250 at [66] and [96] in Vincent Young’s recent case of Kuatro Build Pty Ltd v Elite Formwork Group Pty Ltd [2025] NSWSC 372 at [53] – [55].
Key Takeaways – Properly Resource the Process Or Risk Getting Lost In The Fog
You must prepare and resource each step of the adjudication process under the Act like it is your one chance to prove your point. This includes, the payment claim, payment schedule, adjudication submission and adjudication response.
If a submission is not simply and clearly presented with the best persuasive evidence in support, it may be lost in the fog of the adjudication process.
It would appear that this case requires you to make clear what facts are agreed and what facts are not. It is only those facts that are agreed that will help establish a jurisdictional error.
If you would like to discuss this article with us, please contact Brett Vincent, Partner, or Duncan Macfarlane, Special Counsel or Portia Rope, Paralegal on (02) 9261 5900.