The Construction Contracts Act 2004 requires adjudicators to comply with the principles set out in the code of conduct and the practice guidelines for adjudicators which have been established by the Building Commissioner.
As an adjudicator you must:
- conduct yourself in a professional manner and as a fit and proper person, with the capacity/competence to carry out the role of adjudicator;
- operate within the code of conduct for adjudicators, guidelines established by, and updated from time to time, by the Building Commissioner. Agreement to comply with these instruments is a condition of registration;
- demonstrate/maintain competence to adjudicate a payment dispute effectively; and
- keep up to date with new developments and precedents relevant to the Act.
Payment issues may be disputed without either party being in default or acting unreasonably. Contractual arrangements are private between the parties and, except where required by law, these arrangements should not be made public without the consent of the parties.
As an adjudicator you must:
- ensure that confidentiality is observed in relation to the identities of the parties to the adjudication and information which is identified in a determination as not suitable for publication;
- avoid engaging in publicity in relation to the conduct of adjudications;
- where appropriate, seek advice regarding certain aspects of disclosure if you are uncertain about the issues; and
- only include in the determination information that is needed to explain the basis of any decision.
Conflict of interest
In most cases, an adjudicator will not be aware of the parties to the dispute nor the nature of the dispute until the claimant's papers are lodged. You should review the papers as soon as possible to see if there is any conflict of interest, so that the process is not delayed.
When seeking to appoint an adjudicator, prescribed appointors should informally canvass your suitability as a prospective adjudicator about issues such as availability, expertise and conflict of interest before making a formal appointment. Once a formal appointment has been made, you and the parties are bound to follow the processes in the Act. The Act provides that you must disqualify yourself if there is a material personal interest in the payment dispute or in the construction contract under which the dispute has arisen or in any party to the contract.
Where it becomes necessary, disqualification of an appointed adjudicator must occur in accordance with the Act. This includes the need for the applicant to lodge a new Application for adjudication.
While you can set your own fees, the Building Commissioner must be notified in a format specified by the Building Commissioner. These fees will be published on our website and related publications. You should ensure that information about fees to be charged, including whether they are an hourly rate or lump sum, is readily available to the public through your own publications and those of any prescribed appointor with whom you are associated.
You may request a deposit against the likely fees before commencing a determination, and may seek further deposits during the proceedings. You can also hold back a determination until the fees have been paid.
In general, the claimant will provide the initial deposit, and any further deposits, as the claimant will have the greatest interest in the dispute being adjudicated as quickly as possible. Alternatively, the parties could agree among themselves to pay deposits in equal shares, or for a respondent to pay the fees.
You must allow for the fees in making a determination. If the claimant has paid all the deposits during the adjudication period, then half the costs should be added to any payment awarded in a determination. Where a claimant paid all the deposits, but has failed to support a claim for a payment under the contract, the determination will still require payment of half the costs from the respondent to the claimant.
Where an adjudication is dismissed without a determination, the Act prescribes that costs must be shared. It is the applicant’s responsibity to recover costs against the respondent.
Expert fees and disbursements
The Act allows for you to appoint an expert or arrange testing. Where possible, you should give early advice of the need to appoint an expert, or to incur other disbursements such as for testing. In suggesting an expert or additional testing, you should be mindful of the costs involved and ensure the fees or disbursements are known to the parties, are reasonable and are in proportion with the value of the matter to be determined.
Where an adjudication is dismissed without a determination or the matter lapses, you have a discretion to take fees and costs out of the deposit. The applicant could then take action in another forum to recover half such costs from the respondent. It should be noted that the Building Commissioner will have no involvement in facilitating such recovery.
Conduct of adjudications
The Act allows you to conduct proceedings as you see fit. Adjudicators should conduct proceedings that are quick, inexpensive, independent, and in accordance with the Act to ensure payments are not held up in the contracting chain.
Your role is effectively that of a statutory contract administrator, considering claims for payment and determining how much should be paid.
Claims and responses
Ideally, an application for adjudication should consist of:
- an Application for adjudication – Form 2;
- a copy of the relevant contract provisions;
- the contractor's original claim for payment under the contract;
- the principal's notice rejecting or modifying the claim, or a contract administrator's payment certificate where the amount to be paid differs from the claim, plus any reasons given or relevant correspondence; and
- any argument or discussion refuting the principal's position, or supporting the contractor's position, on which the applicant making the application for adjudication will seek to rely.
Ideally a response to an application for adjudication should consist of:
- a Response to an application for adjudication – Form 4;
- any claim that the dispute is not covered by the Act, has already been determined, or that the adjudicator has a conflict of interest or the claim is too complex to be dealt with by rapid adjudication, with supporting reasons or evidence;
- any claim that the contract provisions supplied by the claimant are incomplete or incorrect, together with supporting evidence; and
- any argument or discussion refuting the claimant's position or supporting the principal's position.
In practice it is likely that some information may be lacking or unclear, and you may wish to obtain further information from the parties. In seeking further information, you should avoid unnecessary cost or delay while still maintaining the necessary degree of procedural fairness.
Reviewing the conduct of the parties
It is up to the contractor to make a proper claim for payment under the contract and to provide the principal or contract administrator with sufficient information to assess the claim. A principal or contract administrator who rejects a claim, or part of a claim, for lack of supporting detail may well be acting reasonably. A contractor who ignores a reasonable request for more information and instead makes an Application for Adjudication may well be acting unreasonably.
You should keep all parties to the adjudication informed about matters relevant to the adjudication and progress on significant issues affecting the adjudication. This includes advising both parties of any previous association with either party or any other matter which could possibly give rise to a conflict of interest.
Responsibility to update contact details
You must ensure that any relevant prescribed appointor and the Building Commissioner are kept informed of changes in your contact details so that service of requisite documents can be effected and parties to a payment dispute have their legal rights preserved i.e. that the strict time frames in the Act are met.
Home Building Contracts Act 1991
In contracts covered by the Home Building Contracts Act 1991 where there is a marked imbalance of knowledge/expertise and resources between a potential claimant and respondent (home owner), you should make yourself aware of the potential imbalance and take this into account to preserve the fundamental principles behind the dispute resolution process.
If it is clear from the response that the respondent has not understood the basis of the claim or the process, you should consider a hearing or other additional requests for information to assist the respondent in the claim.
All documents required under these reporting requirements are to be emailed to the Building Commissioner at email@example.com in Microsoft Word 97 format or equivalent.
Notification of receipt of Application for Adjudication
Following receipt of an Application for adjudication – Form 2 you may be required as the adjudicator to provide to the Building Commissioner with certain information with regard to your appointment as the adjudicator and the contents of the adjudication application. Whether you, as the adjudicator, need to report this type of information to the Building Commissioner will depend upon whether you were appointed as the adjudicator by the parties or appointed by a prescribed appointor.
Appointed by a prescribed appointor
From 1 July 2020, if you are an adjudicator and are appointed by a prescribed appointor to determine an adjudication application, then it will be the responsibility of the appointor (not the adjudicator) to provide the Building Commissioner with the particulars of both your appointment and the adjudication application. The appointor will be required to do so in the form of a Form 3.
Appointed by the parties
From 1 July 2020, if you are an adjudicator who has been appointed directly by the parties under a construction contract (in other words, you have not been appointed by a prescribed appointor), then you will need to provide the Building Commissioner with a Form 3.1.
The Form 3.1 requires you to fill out a number of particulars with regard to the adjudication application and your appointment as the adjudicator under the construction contract, including:
- the name of the adjudicator;
- the names of the parties;
- the payment claim amount;
- the location of works/related goods and services; and
- the business activity of the applicant and the respondent.
An outline of the reporting requirements utilising the Form 3.1 are as follows:
- For each application and appointment of an adjudicator made pursuant to a construction contract under the Act, the Form 3.1 needs to be completed and provided by the appointed adjudicator to the Building Commissioner.
- The Form 3.1 must be completed and provided either on the date the appointment is accepted, or within one business day of the appointment.
- The Form 3.1 must be forward by email to firstname.lastname@example.org. Please do not send a hard-copy.
- Where multiple applications are received involving payment disputes between the same parties, a Form 3.1 needs to be completed and provided for each of the applications.
- Once the Form 3.1 is provided, a file number will be supplied that can be quoted in future correspondence.
- Appointed adjudicators will still be required to communicate to the Building Commissioner a copy of their determination, dismissal, or notice of any withdrawal (as the case may be) and their invoice for fees.
Adjudication identification number
The numbering system to be used to identify each adjudication is as follows:
- The Building Commissioner will provide you with a registration number on registration e.g. Ford Prefect = Adjudicator 01. This number will be printed on your Certificate of Registration.
- On receipt of an application for adjudication lodged by any party, you should allocate an adjudication identification number by listing the adjudicator's registration number e.g. 01, plus the year e.g. 05 = 2005, plus your job number for that year.
If your registration number is 15, the year is 2012 and the job is the 17th for that year the adjudication identification number will be allocated as follows: 15-12-17.
The adjudication identification number must be added to all forms used pursuant to the Act (including the Application for adjudication – Form 2 and Response to an Application for adjudication – Form 4) and quote it on any written correspondence you have with the parties, as well as the Building Commissioner.
Please note: Where, on review, a decision to dismiss an application for adjudication is set aside and the State Administrative Tribunal reverses the dismissal, and you are required to make a determination within 14 days of the reversal, the same adjudication identification number will continue to be used and should be included in any determination.
Notification of dismissal of application for adjudication
Where you dismiss an application for adjudication, you must notify the Building Commissioner of the decision with written reasons for the dismissal.
Notification of determinations
The adjudicator must provide the Building Commissioner with a signed original copy of the determination you made and the written reasons for determinations within 24 hours of providing the determination to the parties.
You should identify any information in the determination that is unsuitable for publication because of its confidential nature.
Where required by a party, the Building Commissioner will endorse the party's copy of the determination with a certificate required under section 43(2)(a) of the Act.
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