counsel for both parties submitting that there was no uncertainty about how and when payment must be made, the adjudicator made a decision on the basis that the implied terms set out in Division 5 of the Schedule of the North Australia’s Act were implied into the contract. This decision had a crucial effect because Inpex issued a notice of dispute only on the 21st day after receiving a payment claim. Therefore Inpex was obliged to pay the full disputed amount regardless of the merits of the case. The adjudicator’s decision set out: “As noted, on 24 November 2016 Inpex issued the Notice of Dispute, 21 days after the Payment Claim was lodges. I have no evidence Inpex issued a notice of dispute, compliant or otherwise, within 14 days after receiving the Payment Claim as required by clause 6(2)(a) of the Schedule. In the absence of any compliant notice of dispute and pursuant to clause 6(2)(a) of the Schedule, which was necessarily implied into the Contract, Inpex was obliged to pay the Payment Claim in full when payment fell due on 1 December 2016, that is 28 days from 3 November 2016.” The court referred to the adjudicator’s request of 25 January 2017 that submissions “must be strictly confined to the question raised”, namely “whether the provisions implied into deficient construction contracts by section 20 of the NT Act should or should not be imported into the EPC Contract”, which precluded Inpex from making submissions on the consequences of failing to meet the implied terms. This amounted to a breach of natural justice and the adjudication decision was set aside. Conclusions The rules of natural justice underpin the enforceability of adjudication decisions even though the adjudication proceedings are sometimes referred to as ‘rough justice’. Depending on the drafting of the security of payment legislation, adjudicators must be mindful of the following conduct which might constitute a breach of natural justice rendering their decisions unenforceable in court: 1) Failure to consider an issue stated in the adjudication document 2) Failure to deciding a material issue that has influence on the outcome of decision 3) Failure to give any reason for a decision 4) Failure to allow the parties to comment on the disclosure procedure 5) Failure to allow the parties to comment on the adjudicator’s findings on any preliminary issue
End Notes
1 Tang’s Report 2001. 2 Report on Public Consultation on Proposed Security of Payment Legislation for the Construction Industry, April 2016. Development Bureau. 3 Proposed Security of Payment Legislation for the Construction Industry Consultation Document, June 2015. Development Bureau. 4 E.g. s.18A(2)(b) and s.18A(3)(b) of the Queensland’s Building and Construction Industry Payments Act 2004 5 Bintai Kindenko Pte Ltd v Samsung C&T Corp [2017] SGHC 321 6 Bintai Kindenko Pte Ltd v Samsung C&T Corp [2018] SGCA 39 7 New Engineering Contract – Engineering and Construction Sub-Contract, Institution of Civil Engineers 8 Carillion Construction Limited v Devonport Royal Dockyard [2005] EWHC 778 (TCC) 9 Balfour Beatty Engineering Services HY Limited v Shepherd Construction Limited [2009] EWHC 2218 (TCC) 10 Viridis UK Limited v Mulalley & Company Limited [2014] EWHC 268