High Court clarifies challenging security of payment scheme adjudications

IN BRIEF - CONSIDER RISKS OF SOP SCHEME ADJUDICATIONS AND TAKE CARE WHEN DRAFTING "PASS THROUGH" PROVISIONS WITHIN SUBCONTRACTS

Across two unanimous decisions, the High Court has provided much needed clarity for two aspects of the Security of Payment scheme in New South Wales and South Australia (SOP Scheme). In Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4, the High Court confirmed that courts do not have jurisdiction to quash adjudication determinations for non-jurisdictional errors of law on the face of the record. Separately, in Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5, the High Court provided a clear warning to head contractors to structure their performance security requirements carefully lest they be considered "pay when paid" provisions.