A new frontier for Security of Payments regime

The Supreme Court of NSW recently expanded the ability of a respondent to challenge an adjudication determination, in the decision of Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd.

Probuild started proceedings in the Supreme Court seeking to set aside an adjudication determination which favoured Shade Systems on the grounds that the adjudicator made an error of law on the face of the record.

The adjudicator determined that Probuild couldn't rely on a liquidated damages clause in a contract to avoid paying Shade Systems - by serving a payment schedule with a nil payment - as Probuild needed to prove Shade Systems was in default. Probuild was liable to pay the amount of $277,755 without any reduction for liquidated damages.