Court of Appeal On appeal, Probuild contended that the primary judge had erred in his decision because underpinning the adjudicator’s rejection of the liquidated damages claim was the application of the prevention principle which had not been argued. Subsequently, the primary issue on appeal was whether the adjudicator had applied the prevention principle and, if so, whether he had denied Probuild procedural fairness. Decision The Court of Appeal found that Probuild had not been denied procedural fairness because, in the circumstances of the arguments put before the adjudicator, it “should not have come as a surprise” to Probuild that the adjudicator would apply the prevention principle. McColl JA delivered the leading judgment and, in so doing, embarked upon a useful discussion of the prevention principle, which we discuss below. Her Honour also highlighted the commercial function of the SOP Act; that being to ensure that any person who undertakes to carry out construction work under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services. Application of the Prevention Principle Her Honour identified that the premise of the prevention principle is that a party cannot insist on the performance of a contractual obligation by the other party if it itself is that cause of the other party’s non-performance.1 By reference to the present case, the prevention principle applies to delays in practical completion caused by variations that result from the act or default of the principal. Ordering variations after the due date that substantially delays completion will, unless the contract provides otherwise, and in the absence of an applicable extension of time clause, disable the proprietor from recovering or retaining liquidated damages which might otherwise have accrued after the giving of the order.2 Therefore, in the context of variations to construction works, whether ordered before or after the due date for completion, the prevention principle “is grounded upon considerations of fairness and reasonableness”.3 Where the prevention principle is employed in extension of time cases, the contractual date for practical completion ceases to be the proper date for the completion of the works and if there is no contractual mechanism for the substitution of a new date, then there is no date from which liquidated damages can run and the right to liquidated damages is lost.4 Accordingly, the time for performance is set “at large”5 and the time for completion of the work is then to be undertaken within a reasonable time.6 The implied operation of the prevention principle can be modified or excluded by contract,7 including by way of extension of time provisions such as those at clause 41.5 – 41.6 of the Subcontract, which provided DDI with the opportunity to claim an extension of time for delay. Probuild argued that DDI’s failure to exercise its contractual right meant that the prevention principle ought not to have been a relevant consideration of the adjudicator.8 However, Her Honour McColl JA held, by reference to Probuild’s own submissions, that the inferential application of the prevention principle by the adjudicator could not, or should not, have come as a surprise to Probuild.