Australian security of payment legislation: Impact of inconsistent case law

In Australia, a supreme court has a supervisory role over the statutory adjudication process that has been established within the security of payment legislation. In this role, the courts have quashed many adjudication determinations on the grounds of jurisdictional error in recent years. This is a problem as the courts’ involvement in statutory adjudication is contrary to the object of the legislation. When reviewing adjudication determinations, the courts have adopted different approaches with respect to determining the role of adjudicators and the essential jurisdictional facts that must exist in order for an adjudicator to have jurisdiction to hear a referred disputed matter. This diversification of judicial interpretation with respect to jurisdictional error is confusing, not only to construction professionals, but also to many lawyers. Via a desktop study – where the evidence is mainly garnered from case law, governmental reports and commentaries – this paper reviews the legal complexities involved in diagnosing jurisdictional errors. In doing so, the paper aims to answer the question as to why the adjudication process has become bogged down in the quagmire of judicial review. The paper concludes that the evolving inconsistency of case law in relation to statutory adjudication is a crucial factor contributing to the erosion of the object of the security of payment legislation in Australia. Moving forward, the paper argues that establishing a legislative review mechanism of jurisdictional challenges may be sufficient to address this problem.