Case Summary: Kuatro Build Pty Ltd v Elite Formwork Group Pty Ltd [2025] NSWSC 372

Commercial, Construction

Navigating Security of Payment Disputes: A Recent Supreme Court Insight

In the dynamic landscape of the construction industry, disputes over progress payments are not uncommon. The recent decision in Kuatro Build Pty Ltd v Elite Formwork Group Pty Ltd offers valuable insights into how such disputes are adjudicated and the challenges involved in contesting adjudication determinations.

Background

Kuatro Build Pty Ltd (“Kuatro“), the head contractor in this matter, engaged Elite Formwork Group Pty Ltd (“Elite“) to provide concrete formwork services for a residential development in Warriewood, NSW.

On 28 November 2024, Elite served a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (“SOPA“) for $1,649,252.99.

Kuatro responded with a payment schedule on 12 December 2024, asserting that not only was nothing owed, but that Elite was indebted to Kuatro in the amount of $965,129.40.

Subsequently, Elite lodged an adjudication application. The adjudicator determined that Elite was entitled to a progress payment of $515,290.38, with the due date for payment being 12 December 2024.

Kuatro’s Challenge

Unsatisfied with the adjudicator’s determination, Kuatro initiated proceedings in the Supreme Court of NSW, seeking both interlocutory and final relief.

Kuatro contended that the adjudicator had committed jurisdictional errors by failing to consider key contractual provisions, including those related to liquidated damages and variations. Kuatro argued that these omissions amounted to a denial of procedural fairness.

Court’s Findings

The Court dismissed Kuatro’s summons, concluding that the adjudicator had:

  • Appropriately considered Kuatro’s claims for liquidated damages, recognising them as factual inquiries suitable for adjudication;
  • Made a bona fide attempt to address the issues on their merits, thereby not committing any jurisdictional error; and
  • Not denied Kuatro procedural fairness in the adjudication process.

The Court emphasised that for a jurisdictional error to be established, there must be a clear failure to consider relevant matters or a denial of procedural fairness, neither of which was evident in this case.

Implications for the Construction Industry

This decision highlights the high threshold for establishing jurisdictional errors in challenges to adjudication determinations under the SOPA.

For contractors and subcontractors, this case underscores the importance of:

  • Presenting comprehensive and well-substantiated claims and responses during the adjudication process.
  • Understanding that Courts will uphold adjudication determinations unless a significant procedural or jurisdictional error is demonstrated.

How We Can Assist

At Keystone Lawyers, we specialise in navigating the complexities of building and construction disputes. Our experienced legal team can provide guidance on:

  • Preparing and responding to payment claims under the SOP Act.
  • Representing clients in adjudication proceedings.
  • Challenging or enforcing adjudication determinations in Court.

If you’re involved in a construction dispute or require legal advice on contractual matters, contact us today to ensure your interests are effectively protected.

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