Adjudication of Disputes
Where a payment dispute arises under a construction contract (for example, when a principal issues a notice of dispute, or when a principal simply does not make a payment due), a contractor (or a principal) can apply for adjudication under the WA Act.
A ‘payment dispute’ arises if:
- by the time the amount under a payment claim is due, the claim has not been paid in full; or
- the claim has been rejected or been wholly or partly disputed.
When to apply for adjudication
Within 28 days of a payment dispute arising, the contractor may make a written application for adjudication, and serve it on the principal and the adjudicator. The parties may nominate an adjudicator in the contract or a prescribed appointor who is required to nominate the adjudicator. The adjudicator or prescribed appointor may require the contractor to lodge a deposit or security for the costs of the adjudication.
If the 28-day period has expired, the contractor will be barred from making an adjudication application in relation to that particular dispute under the WA Act.
The prescribed appointor must, within 5 days of being served with the application, appoint an adjudicator for the dispute and notify all parties.
The application must:
- set out the details of the construction contract involved (or relevant extracts);
- set out the payment claim that has given rise to the dispute; and
- attach the information, documentation and submissions on which the contractor will be relying in the adjudication.
A contractor may not recycle claims if the first opportunity to have them adjudicated within 28 days of the ‘payment dispute’ was not taken advantage of. A fresh entitlement to make such a claim may however arise after making a final payment claim.
The adjudication process requires timely diligence to ensure compliance with the Construction Contracts Act 2004 (WA).
BCGreen is a Registered Adjudicator under the Act and offers Preparation of Applications for Adjudication and the Preparation of Responses to Applications for Adjudication.