Building Adjudication Appeals

30 August 2026 in Building and Construction Law | 4 min read

This article provides an overview of adjudication determinations under the Building and Construction Industry Security of Payment Act 1999 (NSW) and the judicial review of such determinations. If you are not satisfied with a determination, or are preparing for adjudication, we offer free initial 20-minute consultations with our Building and Construction team.

Overview

The adjudication mechanism under the Building and Construction Industry Security of Payment Act 1999 (Act) allows building and construction claimants to seek interim, immediate payment from the respondent where the adjudicator considers it necessary.

It is a fast-track dispute resolution process that is designed to provide interim cash flow relief while preserving each participant’s rights to pursue final resolution through court or otherwise.

The adjudicator determines:[1]

1. The amount of the progress payment, if any, payable by the respondent to the claimant (the adjudicated amount);
2. The date on which that amount became or becomes due and payable;
3. The applicable rate of interest; and
4. How the adjudication fees are apportioned between the parties.

The central issue that an adjudication aims to settle is the amount, if any, that the respondent is liable to pay now in respect of the payment claim.

Ordinarily, a determination made by an Adjudicator is immediately binding and enforceable on the parties involved per sections 24 and 25 of the Act.[2]

While it is immediately binding and enforceable, it does not affect the rights arising out of civil proceedings before a court or tribunal, where it may be ultimately determined that:

1. The adjudicator awarded too much or too little;
2. No amount was contractually payable;
3. Further amounts are payable;
4. The claimant must repay part or all of the adjudicated amount; or
5. The respondent is liable for additional damages.

Setting Aside an Adjudication Determination

 An adjudication decision may be challenged in the Supreme Court if there is an alleged jurisdictional error in the determination.[3]

The Act is deliberately silent on a ‘merits review’ of adjudicated matters. This means that an adjudicated decision can only be quashed if the adjudicator is deemed to have gone beyond their jurisdictional powers.

Where a jurisdictional error is found, the Supreme Court may quash the entirety of the decision or identify the part of the determination affected by the error and set aside that part only, while otherwise confirming any unaffected parts.[4]

Adjudicator Jurisdiction

The adjudicator’s jurisdiction is the authority given to them under the Act to make certain decisions based on certain considerations.

The Act empowers the adjudicator to make the following decisions, as stated above:

1. The amount of the progress payment, if any, payable by the respondent to the claimant (the adjudicated amount);
2. The date on which that amount became or becomes due and payable;
3. The applicable rate of interest.
4. How the adjudication fees are apportioned between the parties.

The Act stipulates that the basis of the adjudicator’s decision must be limited to the following considerations:[5]

1. The provisions of the Act;
2. The provisions of the construction contract from which the application arose;
3. The payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim;
4. 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;
5. The results of any inspection carried out by the adjudicator of any matter to which the claim relates.

Additionally, the Act specifies that the Adjudicator’s determination must:

1. Be in writing;
2. Include the reasons for the determination (unless the claimant and the respondent have both requested the adjudicator not to include those reasons in the determination); and
3. Be served by the adjudicator on the claimant and respondent.

A jurisdictional error occurs when an adjudicator exceeds the above authority given to them under the Act. The Act defines the adjudicator’s powers, limiting them only to the decisions and considerations they are expressly empowered to make.

Jurisdictional Error: A Case Study – Acciona v Chess

When the Supreme Court is determining the existence of a jurisdictional error, it generally considers whether the adjudicator executed the statutory power within the scope of the above provisions in the Act.

The court’s current approach to this provides quite a high threshold to overcome, because the error must also be ‘material’ to the determination.

Case Study: Acconia v Chess

In Acciona Infrastructure Australia Pty Ltd v Chess Engineering Pty Ltd [2020] NSWSC 1423, the respondent of the adjudication sought to set aside the determination made in favour of the claimant.

A jurisdictional error was found to be present in this case; however, the court deemed the materiality of this error to be insufficient. Therefore, no part of the adjudicated determination was quashed or set aside despite the court’s recognition of an error.

Justice Henry determined that, although the adjudicator erroneously summarised aspects of the respondent’s submissions and made statements contrary to the evidence before him, the majority of errors did not amount to jurisdictional error.

It was held that the adjudicator had reviewed the material and made the considerations as was necessitated by the Act. It was “immaterial” that the adjudicator misunderstood some of the evidence and submissions, which, flowed from a complex and inaccessible payment schedule.

The respondent lost around $2,000.00 due to this.

This case study demonstrates some key cautionary aspects of judicial review in these circumstances:

1. It is important to have clear and concise payment schedules in submissions at adjudication, as an erroneous interpretation by the adjudicator may not be reviewable; and
2. It is important to determine whether it is commercial to apply for judicial review of an adjudicated determination, considering the difficulties in proving such a material jurisdictional error.

Key Takeaways

1. Building and Construction Security of Payment adjudications are an interim relief mechanism that is immediately binding and enforceable upon determination.
2. A determination cannot be appealed or reviewed based on the merits of the decision itself.
3. A determination can only be reviewed and quashed if there is a jurisdictional error present.
4. The threshold to prove a jurisdictional error is quite high, because sufficient ‘materiality’ must be established as well.

How can BSM Sydney Lawyers assist you?

The construction legal team at Brander Smith McKnight Sydney Lawyer have over 30 years of experience in the building and construction industry. BSM Construction Lawyers Sydney are renowned as building law experts. Our lawyers provide a professional legal service tailored to your needs with a fast and personal turnaround. BSM’s building and construction lawyers are experienced in construction defects and the Building and Construction Industry Security of Payment Act 1999 (NSW). We are expert negotiators and will advocate strongly for you. Our lawyers have extensive experience in representing clients in tribunal hearings at NCAT and challenges in the Supreme Court. Our senior construction lawyers provide a free 20-minute consultation.

Brander Smith McKnight has offices conveniently located in Sydney CBD, Sutherland, Parramatta, Shellharbour and Wollongong.