In April 2025, two New South Wales decisions were handed down regarding the above issue.  Those decisions are the New South Wales Court of Appeal decision of Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 (Martinus Decision), and the decision of Peden J in Builtcom Construction Pty Ltd v VSD Investments Pty Ltd atf The VSD Investments Trust; VSD Investments Pty Ltd atf The VSD Investments Trust v Builtcom Construction Pty Ltd [2025] NSWSC 250 (Builtcom Decision), which refers to and applies the Martinus Decision.

The Builtcom Decision concerned an application for judicial review of a determination by an adjudicator under the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act). In particular, how the adjudicator addressed:

1. section 22(2)(c) which requires an adjudicator in the making of a determination, to have regard to all submissions that were “duly made” in support of a payment claim to which the adjudication application relates; and
2. section 22(2)(d) which requires an adjudicator to have regard to all submissions that were “duly made” in support of a payment schedule. 

Those provisions are in identical terms to section 23(2)(c) and (d) respectively of the equivalent Victorian legislation.

Each of the provisions was in issue as Builtcom Constructions Pty Ltd contended the adjudicator failed to consider submissions in relation to its payment claim, and the VSD Investments parties contended the adjudicator failed to consider submissions in relation to their set off claim.
In substance, Builtcom Constructions Pty Ltd’s argument was that an implied condition of the adjudicator’s power to determine an adjudication application was that he must apply the correct legal test in identifying whether submissions were “duly made” or not. Builtcom Constructions’ contention was that the adjudicator failed do that, and his error was said to be jurisdictional.

The VSD Investments parties’ position was, in summary, that the adjudicator failed to consider set off claims concerning defects and overpayments because the adjudicator erroneously concluded that the submissions were not duly made, and took issue with the adjudicator’s characterisation of the set off claims as claims for general damages which the adjudicator considered he did not have jurisdiction to determine. 

In her reasons, Peden J provides a helpful overview of the relevant authorities and made three principal observations.

First, her Honour confirmed that an assessment of whether a submission is duly made either in a payment claim or a payment schedule is ordinarily a matter for the adjudicator to determine not a court, unless a jurisdictional error is established: [19]-[25]. See also, Martinus Decision at [65], [228] and [274].

Second, generally speaking, there will be few cases where a breach of s 22(2) will constitute a jurisdictional error. Relevantly, the adjudicator’s opinion that a submission is or is not “duly made”, is not a pre-condition to the exercise of any power conferred by the Act. Formation of that opinion “is no more than a step taken by the adjudicator when determining what materials she must consider in order to comply with her statutory duty”, and is therefore not a subjective jurisdictional fact: [58]. Further reasons as to why a court may not characterise an adjudicator’s error as a jurisdictional error include the context in which s 22(2) appears, being within a “pay now fight later” regime, which does not foreclose a claimant’s rights. The pressures placed on the adjudicator to carry out what is a time sensitive and document heavy adjudication process is also a consideration to which courts have regard: see further [76]-[78].

Third, in relation to the limited circumstances where an error in the application of s 22(2) might constitute a jurisdictional error, those exceptions include where the decision that a submission was not duly made is not reasonable, is without foundation or where the issue was not considered at all: [20] and [63]-[64]. A mere failure to correctly deal with the issue does not constitute a failure to consider the issue at all: [68]. See also Martinus Decision at [65] to [67].

After surveying the authorities, her Honour concluded that there was no error in the way the adjudicator considered whether submissions were duly made either in relation to the payment claim or the payment schedule, and alternatively, if there was an error, it was not jurisdictional in nature.

Andrew Blair and Jane Lindgren

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