Pragma Lawyers assists Cooper & Oxley Group in successful judicial review proceeding in claiming backcharges and previous payment claim amounts

Pragma Lawyers was pleased to assist Cooper & Oxley Group Pty Ltd (Cooper & Oxley), in the recent Supreme Court decision of Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4. This decision reinforces that adjudicators must properly engage with all the materials placed before them in an adjudication, to determine deductions claimed against payment claims.

Background

Cooper & Oxley was the contractor for the redevelopment of the Hamersley Golf Course, and engaged Caledonia Contracting (Caledonia), as subcontractor for concrete formworks. Cooper & Oxley subsequently terminated the subcontract with Caledonia.

Caledonia referred a progress claim of $223,726.84 to adjudication. The adjudicator determined that $131,935.76 was payable to Caledonia. Cooper & Oxley sought judicial review of that determination, claiming amongst others that the adjudicator failed to consider amounts Cooper & Oxley set off against the payment claim based on backcharges it was entitled to, and an outstanding amount to its credit carried over from a previous payment claim. Cooper & Oxley claimed that the adjudicator’s failure amounted to jurisdictional error.

The decision

The Court found that there was jurisdictional error in the adjudicator’s determination, given the adjudicator failed to address two categories of set-off claims advanced by Cooper & Oxley.

Those set-off claims consisted of:

• backcharges of $48,420.16; and
• an outstanding debt of $10,407.96 carried forward from a previous progress claim.

The amounts were significant in the context of the determination and the issues in dispute between the parties.

In pursuing these claims, Cooper & Oxley relied on its payment schedule issued in response to the payment claim, and the material it submitted as part of the adjudication response.

The Court re-affirmed the principles in Total Eden Pty Ltd v Charteris [2018] WASC 601, namely that a failure to “take into account a respondent's response to a claim, including the merits of any set off, constitutes a jurisdictional error because it constitutes a failure to take into account a matter which the Act requires an adjudicator take into account in determining the payment dispute.”

The Court accepted that, in the two key respects, the adjudicator failed to address the matters he was required to consider under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (Act), and quashed that part of the determination.

Observations on clarity

The Court provided a helpful closing observation to contract parties involved in payment disputes and the adjudication process, and encouraged the use of clarity and plain language in material concerning payment claims and responses, to achieve the objectives of the Act concerning an expeditious, efficient and fair process aimed at resolving payment disputes.

Takeaways

This decision reinforces that an adjudicator must address claims for set-off that are raised in adjudication material, very much on par with decisions under the previous Act regarding set off claims. A failure to consider such claims risks a finding that a jurisdictional error has been made in respect of that issue, which the Court may quash on review.

A contract party faced with a payment claim, can include relevant set-off claims in its payment schedule and pursue those claims in an adjudication, however the overall process will be aided by a clear and precise indication of how a payment claim is assessed and the amount arrived at, inclusive of any amounts claimed to be set off against a payment claim.

Pragma Lawyers is pleased to have assisted Cooper & Oxley in achieving a favourable outcome in the proceedings.

If you require advice or assistance in relation to a construction matter, please reach out to Dirk Branford or Aaron McDonald.

_{1 A decision concerning the Construction Contracts Act 2004 (WA).}