BuildLaw Issue 32 June 2018 | Page 18

NEW ZEALAND

Case in brief
Adjudicator's determination quashed

By John Green

Anderson and Anor v Swindells & Anor [2018]

The recent decision of Davison J in Anderson and Anor v Swindells & Anor [2018] NZHC 1803 [19 July 2018]
In this case, on the application of the second respondent building company McDowall, Mr Swindells was appointed as an adjudicator by the Adjudicator’s Association of New Zealand to determine a dispute between McDowall and its clients in relation to unpaid invoices and allegations by the homeowners of negligent preparation of the estimate of the cost of the works, improper charging, delay, and defective works.
The applicants’ principal ground for review was that the adjudicator’s determination was made without jurisdiction. They say that the adjudicator failed to address and determine the matters put in dispute and to be determined by the adjudication, and instead based the determination on an entirely different matter which was not the subject of the dispute, viz default liability under section 22 of the Act.
The applicants also alleged that the adjudicator’s determination was made on the basis of mistaken facts; errors of law; by failing to take into account relevant considerations; by taking into account irrelevant considerations; by failing to give coherent and adequate reasons in the determination; and by failing to reach conclusions on issues raised by the parties to the adjudication for his determination.
The Court confirmed that, applying the approach to applications for judicial review described by Whata J in Rees v Firth, applicants face a high legal hurdle and must demonstrate that the adjudicator has made a significant and substantial error of law or that there has been a fundamental and substantial breach of natural justice such as warrants the Court exercising its discretion to grant judicial review relief.
After reviewing the notices of adjudication, the submissions of the parties, and the evidence and documents presented to the adjudicator, his Honour observed that nowhere in those materials did the parties address the issue of McDowall’s compliance with the requirements of s 20 of the Act. Similarly, nowhere did either party refer to or identify the issue of whether the applicants had or were required to satisfy the requirements of s 21 of the Act, or the consequences of their failure to provide a payment schedule.
Having determined McDowall’s entitlement to payment of the six invoices on the basis that the applicants had not provided any payment schedules, the adjudicator found it unnecessary to consider whether McDowall was entitled to payment for the work in respect of which the invoices were issued. He said:
These omissions by the Respondents removed the requirement for the “Burdon [sic] of Proof” which the Claimant would have had to respond to if the Payment Schedules were issued.