Commercial Fitouts and Your Obligation to Give Notice of Adjudication Applications
In the case of Chase Oyster Bar v Hamo Industries  NSWCA 1990, Chase Oyster Bar (Chase) engaged Hamo Industries (Hamo) to perform fitout building works in Chatswood Chase. During the performance of the works, Hamo issued payment claims and Chase did not provide payment schedules. Accordingly, Hamo notified Chase that it was going to proceed with an adjudication application. Nevertheless, pursuant to s 17(2)(a) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), Hamo failed to notify Chase of its intentions to proceed with the adjudication application within 20 days from the due date of the payment claim and gave its notice outside of the 20 day requirement.
Hamo then proceeded to file its adjudication application and Chase filed its adjudication response. At the adjudication, the adjudicator did not consider the adjudication response because Chase had failed to provide a payment schedule and accordingly, Hamo was awarded the entire amount outstanding on the payment claim.
Chase appealed the adjudication determination to the Supreme Court of New South Wales where it was held that due to Hamo’s failure to provide the notice of its intention to proceed with an adjudication application within 20 days in accordance with s 17(2)(a) of the Act, the adjudicator was wrong in not hearing the respondent’s defence pursuant to the adjudication response and accordingly the adjudication order was quashed.
- Read or get comprehensive advice on the Act prior to issuing a payment claim;
- Make sure there is a contract;
- Make sure you serve the payment claim; and
- Make sure you serve notice within 20 days that you will proceed to an adjudication application.
If you fail to comply with the Act, you may be up for steep legal cost orders made against you.
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This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.