IN BRIEF
The concepts of set off and back charges are fairly common in
construction and engineering circles, however, the correct
application of these types of provisions can often be
confusing.
In the recent case of PPK Willoughby v Eighty Eight
Construction, the Supreme Court considered (amongst other
things) whether an adjudicator had failed to fulfil his statutory
obligations in determining that there was no retrospective right to
set off for the cost of rectifying defects.
The facts
PPK (as Principal) and Eighty Eight Construction (as Contractor)
entered into a "Construction Agreement" for the
construction of luxury homes on Sydney's lower north shore.
As part of the payment process the Contractor would email a
spread sheet to the Superintendent every month containing a claim
for interim payment. Shortly thereafter, the Superintendent would
meet on site with the financier's quantity surveyor and the
Contractor to walk through the site and determine
