Security of Payment Adjudication: What to Expect When Your Dispute Goes to Determination
Kale Venz
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You’ve served your payment schedule disputing a construction payment claim. Now the claimant has applied for adjudication. What happens next? Many respondents enter the adjudication process unprepared, not realising how quickly decisions are made or how binding they are.
Understanding the adjudication process under Queensland’s Building Industry Fairness (Security of Payment) Act 2017 and NSW’s Building and Construction Industry Security of Payment Act 1999
is critical to protecting your interests.
What Is Adjudication?
Adjudication is a fast-track dispute resolution process designed to provide interim cash flow relief while preserving parties’ rights to pursue final resolution through court or arbitration. An independent adjudicator reviews the payment claim, payment schedule, and supporting materials, then makes a binding determination on how much must be paid.
The key word is interim. The adjudicator’s decision determines payment obligations temporarily, not permanently. However, most disputes end at adjudication – the cost and delay of further litigation means parties often accept the determination as final.
The Timeline: Speed Is Everything
Adjudication moves fast. Once an application is made:
Queensland: You typically have 10 business days to file your adjudication response. The adjudicator then has 15 business days to make a determination (extendable to 20 days with consent).
New South Wales:
You have 5 business days to file your response (extendable to 10 days with claimant consent). The adjudicator has 10 business days to decide (extendable to 15 days).
These timeframes are strictly enforced. Late submissions may be rejected entirely, leaving you unable to present your case.
What goes into an Adjudication Response?
Your adjudication response is your opportunity to defend your position. It must be comprehensive because you’re limited to the reasons you included in your payment schedule – no new arguments are permitted.
A strong response typically includes:
Detailed submissions:
Explaining why the scheduled amount is correct, addressing each element of the claim
Supporting evidence:
Contracts, correspondence, site records, photographs, expert reports, invoices
Legal analysis:
Interpretation of contract terms, legislative requirements, and relevant case law
Technical challenges:
Jurisdictional objections, validity issues with the claim or adjudication application
This is not a simple letter. Adjudication responses regularly run 30–50 pages with extensive annexures. The adjudicator will be reviewing both parties’ submissions simultaneously, so clarity and organisation matter.
The Adjudicator’s Decision
The adjudicator will issue a written determination setting out their decision and reasons. They can:
- Uphold the claimed amount in full
- Accept your scheduled amount
- Determine a different amount between the two
In both Queensland and NSW, you must pay the adjudicated amount within 5 business days (or as specified in the determination).
Failure to pay can result in the claimant suspending work or, more seriously, obtaining a judgment for the debt and pursuing enforcement action against your company.
Can You Challenge the Decision?
Yes, but the grounds are narrow. You can apply to court to set aside an adjudication determination for:
Jurisdictional error:
The adjudicator made a decision they had no power to make
Denial of natural justice:
You weren’t given a fair opportunity to present your case
Generally, you cannot challenge the adjudicator’s decision simply because you disagree with their assessment of the facts or law. The threshold for setting aside a determination is high.
Importantly, you must still pay the adjudicated amount even while challenging the determination. The principle is “pay now, argue later.”
The Importance of Early Preparation
The adjudication timeframes are tight. Once you serve a payment schedule disputing a claim, you should assume adjudication is coming and start preparing immediately:
Waiting until the adjudication application arrives leaves you scrambling. In NSW, with only 5 business days to respond, delay can be fatal to your case.
Get Legal Guidance
Adjudication is a high-pressure, time-critical process that requires immediate action and strategic thinking. Whether you’re facing an adjudication application or considering applying for one yourself, experienced legal advice makes the difference between success and failure.
CJM Lawyers’ litigation and dispute resolution team regularly represents clients in security of payment adjudications across Queensland and NSW. We understand what adjudicators look for, how to present your case effectively, and how to protect your interests under tight deadlines.
Don’t navigate adjudication alone – contact CJM Lawyers today.
Disclaimer:
This article provides general information only and does not constitute legal advice. Every adjudication is unique and requires specific legal advice tailored to your circumstances. Contact CJM Lawyers promptly if you are involved in a security of payment dispute.
