A recent decision of the Supreme Court* has provided a guidance as to the extent to which an adjudicator is required to give reasons for an adjudication decision pursuant to the Building and Construction Industry Payments Act 2004 (Qld) (‘the Act’).

Hyatt Ground Engineering Pty Ltd (‘Hyatt’) was engaged by Watkins Contracting Pty Ltd (‘Watkins’) to carry out works. While performing the works, an incident occurred which involved Hyatt’s drill rig slipping and rolling onto its side. As a result, Watkins purported to terminate its subcontract with Hyatt.

Following the alleged termination, Hyatt served a payment claim upon Watkins.

The matter proceeded to an adjudication. In its adjudication response, Watkins argued that it had validly terminated the subcontract, that all available references dates had been utilised by Hyatt, and that the payment claim was not supported by a valid reference date.

The adjudicator found that the subcontract had not been validly terminated and that there was a valid reference date. The adjudicator gave very brief reasons for their conclusions. The adjudicator determined that Watkins should pay the sum of $479,448.10 to Hyatt.

Watkins sought to have the adjudication decision declared void by the Supreme Court.

Before the Court, Watkins contended that the adjudicator did not properly consider Watkins’ submission that the subcontract had been terminated, with the effect that the payment claim was not supported by a valid reference date.

Hyatt’s primary position was the adjudicator had given sufficient reasons for the adjudicator’s conclusions and the Court dismissed Watkins’ Application. In summary, the Court found that the reasons given by the adjudicator for rejecting Watkins’ argument resolved the two questions which were before the adjudicator, first whether the subcontract was properly terminated, and, second, whether there was an available reference date. Consequently, the adjudicator had performed their assigned task.

In summary, an adjudicator’s decision will not be set aside even if the reasons for the adjudicator’s decision are brief; provided that the reasons, firstly, demonstrate that the adjudicator has set out their actual reasons for the decision** and, second, that the adjudicator properly engaged with any duly submitted material.*** It is rare that an adjudicator’s reasons will fall afoul of either requirement, for example

we note that in Cockram the Court did not grant relief in circumstances where an adjudicator stated that her reason for not applying a precondition to an extension of time claim was that it was not “a legitimate condition precedent”. Whilst this is a more extreme example, Judges have consistently recognized that adjudicators give their decisions in a “pressure cooker” environment and they will be slow to criticise a mistake so long as the adjudicator appears to have made a good faith attempt at making his or her decision.

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* Watkins Contracting Pty Ltd v Hyatt Ground Engineering Pty Ltd [2018] QSC 65 (Watkins)
** Not referred to in Watkins, but this is clearly a requirement Cockram Construction Ltd v Fulton Hogan Construction Pty Ltd [2018] NSWCA 107 (Cockram)
*** As an adjudicator is required to “consider” the matters contained in section 26 of the Act; by contrast the adjudicator cannot simply refuse to apply the contract; see BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2013] QCA 394 per Muir JA at [29] and [30]