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Cockram Construction Limited v Fulton Hogan Construction Pty Ltd [2018] NSWCA 107 ||| MTECC News edition 19.1

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Cockram Construction Limited v Fulton Hogan Construction Pty Ltd [2018] NSWCA 107

An adjudicator determined that Cockram, as subcontractor to Fulton Hogan, was entitled to be paid $8,307,337.72 in respect of extensions of time. In defence of the claim, Fulton Hogan relied upon clause 22(1)(e) of the subcontract, which provided as a pre-condition to entitlement to an extension of time, that the contractor (Fulton Hogan) had received an equivalent extension of time under the head contract. The adjudicator held that this was not “a legitimate condition precedent” because it relied upon a contractual relationship to which Cockram was not a party.

Fulton Hogan sought judicial review of the determination on the basis that the adjudicator had departed from her statutory functions by refusing to apply clause 22(1)(e) of the subcontract.

The Primary Judge granted the relief, holding that “it was simply a matter for speculation why the adjudicator thought clause 22(1)(e) did not apply”, and that accordingly the adjudicator had failed to give reasons for a critical aspect of her decision, which constituted a failure to comply with the statutory requirement to “include reasons for the determination (per s22(3)(b))”, and jurisdictional error.

On appeal by Cockram to the Court of Appeal, Fulton Hogan reshaped its arguments in seeking to support the Primary Judge’s decision, first, by submitting that the adjudicator’s reasons indicated a refusal by the adjudicator to apply clause 22(1)(e) of the subcontract, and secondly, that if the adjudicator’s reasons did not manifest such a refusal, the adjudicator must have had additional and unstated reasons for upholding the extension of time claims, and accordingly failed to comply with the requirement that the adjudicator’s determination “include the reasons for the determination”.

The Court of Appeal allowed Cockram’s appeal, holding that:

  1. the requirement to include reasons for the determination does not require the adjudicator to provide a written account of the subjective processes by which the determination was reached. It is sufficient that the adjudicator provide an explanation for the outcome which the adjudicator wishes to present;
  1. the determination recorded a complete argument for the conclusion reached by the adjudicator and accordingly there was no basis for the submission that the adjudicator must have had additional unstated reasons for her determination.

Francis Tiernan QC

 

Special leave news

The High Court has granted special leave in respect of the Victorian Court of Appeal’s decision of Mann v Paterson Constructions Pty Ltd [2018] VSCA 231. The Court of Appeal’s decision was summarised in a case note by Andrew Laird in edition 18.17, located here for ease of reference.

 

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