Getting paid on a counterclaim needs a separate adjudication under the WA Construction Contracts Act

Key Points:

To recover an amount by reason of a counterclaim in an adjudication under WA's Construction Contract Act, the respondent must initiate a separate adjudication.

A recent decision by Justice Beech of the Western Australian Supreme Court in Alliance Contracting Pty Ltd v James [2014] WASC 212 has clarified the operation of section 31(2)(b) of the Construction Contracts Act 2004 (WA) (CCA). Under that section, the adjudicator has the power to determine whether "any party" to a payment dispute is liable to make a payment.

The Court was asked to clarify whether the adjudicator had the power to determine a net payment in favour of the respondent where the respondent had not commenced a separate adjudication to advance its counterclaim.