FAQs: Security of payment: adjudication responses

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 respondent is a principal or property owner who has engaged a construction contractor to carry out work, and who is facing an adjudication application from the contractor seeking payment over and above what the principal or property owner has been prepared to pay.  Below is a series of questions that respondents frequently ask about the process.

As you will see, preparing a response to 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 a response.

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.

How much time do I have to lodge a response?
How much time do I have to lodge a response?

The response to an application for adjudication must be prepared and served within 10 business days after the date on which you are served with the application (as a party to the construction contract).   Please note that the definition of business days, excludes weekends, public holidays and the period 25 December to 7 January (inclusive).

What does lodgement of the response involve?
What does lodgement of the response involve?

To successfully respond to an adjudication application, you must achieve each of the following within the 10 business day period referred to above:

  1. prepare a written response to the application that complies with CCA requirements;1
  2. serve the response on the applicant and on any other party that has been served with the application;2 and
  3. serve the prescribed appointor/adjudicator (as the case may be).3
What needs to be in the response?
What needs to be in the response?

The response must set out, or attach to it, the following main details:

  1. any notice, letter or communication containing the rejection or dispute of the payment claim that has given rise to the dispute;4 and
  2. all the information, documentation and submissions you wish to rely on in the adjudication.5

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.

 

 

What else should I include in my response?
What else should I include in my response?

Best practice is to put in the following as part of the response:

  1. cover letter to the prescribed appointor (or prescribed adjudicator) confirming what is contained in the response;
  2. outline of submissions explaining why the amount claimed is not due and owing under the contract, and explaining any relevant set offs or counterclaims (if applicable);
  3. statutory declaration(s) or signed witness statement(s) verifying the facts upon which the rejection or dispute of the claim is based; and
  4. book of documents containing all relevant documents including relevant correspondence.
How do I serve the response?
How do I serve the response?

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.

How are the adjudicator’s fees dealt with?
How are the adjudicator’s fees dealt with?

Generally, the parties involved in a dispute are liable to pay the costs of the adjudicator in equal shares. Frequently, adjudicators will ask for a deposit or security for costs to be provided.

 

How long will it take for the adjudicator to make a determination?
How long will it take for the adjudicator to make a determination?

The adjudicator is to make a determination within 10 business days after the date of 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.7

Note that the adjudicator may seek the consent of the parties to extend the time for making a determination.8

 

 

How is the adjudicator’s determination enforced?
How is the adjudicator’s determination enforced?

If your response fails and the applicant receives an adjudication determination in its favour, the applicant can 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.9 Upon filing the determination, it will be taken to be an order of the court and may be enforced.10

 

 

Can I appeal the adjudication finding?
Can I appeal the adjudication finding?

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 in limited circumstances.

Can I get assistance in preparing the response?
Can I get assistance in preparing the response?

The Lavan's Construction and Infrastructure team has an in-depth and extensive working knowledge of the adjudication setting in Western Australia, and is able to assist in the preparation of responses to adjudication applications at short notice.