Can Architects Quash a Sub-Consultant SOPA Determination for Apprehended Bias in NSW?
- John Merlo
- 2 days ago
- 18 min read
Key Takeaways
Errors of contract interpretation are rarely enough: The Supreme Court of NSW typically protects adjudicator determinations containing errors of law unless they escalate to a jurisdictional error, such as a denial of natural justice or apprehended bias.
The bias threshold is exceptionally high: Mere familiarity with previous project disputes or unilateral criticism of an adjudicator by a respondent does not automatically satisfy the "fair-minded lay observer" test for apprehended bias.
Determinations can be severed, not entirely voided: Under section 32A of the Building and Construction Industry Security of Payment Act 1999 (NSW), inserted by amending legislation assented to in 2018 and commenced by proclamation in 2019, the Court may identify and sever the portion of a determination affected by jurisdictional error while enforcing the remainder of the sub-consultant's payment award.
Proactive payment schedule drafting is your primary defence: Because Supreme Court review is difficult and costly, architects must front-load jurisdictional boundaries and clearly articulate sub-consultant coordination failures within the statutory payment schedule timeframe.
The email from the Authorised Nominating Authority lands in your inbox, containing an adjudication determination that orders your practice to pay a structural engineer for out-of-scope redesign variations. As you read the adjudicator's reasons, you realise they have completely misunderstood the coordination obligations set out in your sub-consultant agreement. Worse, the redesigns they just awarded payment for were actually required to rectify the engineer's own detailing errors. Your immediate commercial instinct is to attack the decision—surely an adjudicator who ignores the contract and rules in favour of a defective sub-consultant is biased or incompetent enough to have their decision quashed.
However, overturning a statutory adjudication is not simply a matter of appealing a bad outcome. Before you instruct lawyers to challenge the decision, you must understand how the New South Wales Supreme Court defines reviewable error, the exceptionally high threshold for proving apprehended bias, and why your payment schedule remains the only reliable frontline defence against consultant claims.
Receiving the Sub-Consultant's Adjudication Determination: Initial Assessment and Timelines
You are now holding a determination that creates an immediate, enforceable statutory debt against your practice. Before you begin preparing an attack on the adjudicator's competence or impartiality, you must separate your frustration over an unfair commercial outcome from what the law actually defines as a reviewable error. This section clarifies the procedural threshold for challenging a decision and the strict financial timelines that continue to run while you consider your options.
Separating Non-Reviewable Errors of Contract Interpretation from Jurisdictional Error
When an adjudicator misinterprets an architectural sub-consultant agreement—such as failing to recognise that the engineer bore the design coordination risk—it is undeniably an error of law. However, under the rapid interim framework of the security of payment scheme, adjudicators are generally permitted to get the facts and the law wrong without their decisions being invalidated. The fundamental hurdle for practice principals wanting to challenge a determination is that ordinary errors of contract interpretation are rarely reviewable.
Under the Building and Construction Industry Security of Payment Act 1999 (NSW), an adjudicator's error in interpreting a sub-consultant agreement does not automatically render the determination void; a Supreme Court challenge must establish a genuine jurisdictional error.
The Supreme Court exercises its supervisory jurisdiction to review and quash decisions affected by jurisdictional error through proceedings in lieu of prerogative writs, a power preserved under section 69 of the Supreme Court Act 1970 (NSW). A jurisdictional error occurs when an adjudicator acts outside their statutory authority—for instance, by failing to provide procedural fairness, exhibiting apprehended bias, or failing to address the matters they are required to consider. It is likely that a simple misreading of your sub-consultant coordination clauses will not satisfy this strict test, leaving the determination enforceable.
The Adjudicator's Statutory Mandate Under Section 22
To assess whether an adjudicator has committed a reviewable error, it is necessary to examine what they are actually required to do.
Under section 22 of the Building and Construction Industry Security of Payment Act 1999 (NSW), the adjudicator is statutorily tasked with determining the amount of the progress payment payable to the claimant, the date on which that amount became or becomes payable, and the rate of interest payable on that amount.
The adjudicator performs this function by considering the provisions of the Act, the construction contract (in this context, the sub-consultant agreement), the payment claim together with all submissions duly made by the claimant in support of the claim, the payment schedule together with all submissions duly made by the respondent in support of the schedule, and the results of any inspection carried out by the adjudicator of any matter to which the claim relates. If the adjudicator genuinely assesses these materials and calculates an amount—even if their reasoning is heavily flawed or commercial architects would view it as objectively incorrect—they have generally satisfied their statutory mandate. The rapid nature of the scheme prioritises cash flow over perfect legal accuracy.
Navigating the Supreme Court Review Timeline
Filing an application for review in the Supreme Court does not magically freeze your obligation to pay the sub-consultant. Seeking an injunction to restrain the engineer from enforcing the statutory debt requires independent legal steps.
Architects who wish to mount a challenge while simultaneously navigating the procedural pathways of the NSW security of payment scheme will typically need to pay the disputed adjudicated amount into court, or provide a bank guarantee as security, while the review is pending. If you fail to secure a stay of enforcement, the sub-consultant can obtain a judgment debt and enforce it, meaning the funds will leave your practice account long before a judge ever reviews the adjudicator's conduct.
Establishing Apprehended Bias in Supreme Court Proceedings
If you elect to commence proceedings under the Supreme Court's supervisory jurisdiction, the evidentiary burden shifts entirely onto your practice. Establishing that an adjudicator's handling of your sub-consultant's claim was infected by apprehended bias requires far more than proving they made an unreasonable decision or ignored your submissions. This section outlines the strict common law threshold you must meet to convince a court that the adjudicator lacked impartiality.
Applying the Fair-Minded Observer Test to Adjudicator Conduct
The foundational test for apprehended bias does not ask whether the adjudicator was actually biased; it asks whether an independent, reasonable person would suspect they were. Because security of payment adjudications are intended to be rapid and commercially pragmatic, courts may afford adjudicators significant procedural leeway. An adjudicator who uses blunt language, dismisses weak arguments aggressively, or requests targeted clarifications may still be acting within their authority, provided they do not demonstrate a predetermined position.
What practitioners observe repeatedly in NSW is that Authorised Nominating Authorities operate from relatively small panels of experienced adjudicators, and certain adjudicators develop a working familiarity with specific project types, procurement structures, or even recurring parties. When a services engineer regularly pursues claims on mixed-use residential developments, the same adjudicator may appear more than once across different claim cycles on related projects. The ANAs are not obliged to appoint a different adjudicator simply because a respondent objects to prior project exposure, and in practice, objections lodged with the ANA at the appointment stage are rarely successful unless they identify a conflict that falls squarely within the adjudicator's own disclosure obligations.
The Supreme Court's position reflects this commercial reality: a respondent who has been on the losing end of a prior determination before the same adjudicator — even on a factually similar claim — cannot convert that outcome into a bias ground without demonstrating something far more pointed than professional familiarity or a track record of adverse rulings. The "fair-minded lay observer" in this context is taken to understand that fast-track adjudication operates differently from curial proceedings, and that panel concentration is an inherent feature of the scheme rather than evidence of institutional partiality.
In New South Wales, establishing apprehended bias requires demonstrating that a fair-minded lay observer might reasonably apprehend that the adjudicator did not bring an impartial mind to the resolution of the payment dispute.
For architectural practices engaging NSW building and construction lawyers to assess a potential challenge, the advice is likely to centre heavily on whether the adjudicator's conduct crossed the line from robust, fast-track decision-making into a genuine denial of procedural fairness.
Unilateral Criticism and Previous Dispute Rulings
Example:
Consider a scenario where an architectural practice previously lost an adjudication to a services engineer. During that process, the architect fiercely criticised the adjudicator in correspondence for fundamentally misunderstanding the role of the primary design consultant. Six months later, the same engineer lodges a new adjudication application with an Authorised Nominating Authority approved under the NSW security of payment scheme, and the Nominating Authority appoints the same adjudicator. If the adjudicator again rules in favour of the engineer, the architect might assume the decision is tainted by retaliatory bias.
However, applying orthodox apprehended bias principles confirmed in Crowley Australia Pty Ltd v Latitude 63 LLC [2026] NSWSC 130 — a case decided by the NSW Supreme Court under cross-vesting arrangements in respect of a Northern Territory security of payment adjudication, in which apprehended bias was raised as a secondary ground of challenge and rejected on the basis of settled common law authority including Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 — a court is unlikely to find apprehended bias based solely on the respondent's unilateral prior criticism or the adjudicator's previous rulings against them on the same project.
The primary ratio of Crowley concerned whether a post-termination claim for the return of bank guarantee proceeds constituted a valid payment dispute within the Northern Territory security of payment regime, and the apprehended bias reasoning should be understood as confirmatory of existing doctrine rather than as the principal holding of the case.
Because Crowley concerned a Northern Territory security of payment adjudication heard in the NSW Supreme Court under cross-vesting arrangements, practitioners should note that the NT statutory framework differs from the NSW SOPA in certain respects, including the applicable definitions and enforcement provisions. The apprehended bias analysis, however, applied settled common law principles that are jurisdiction-neutral, and the reasoning on the fair-minded lay observer test is directly applicable to NSW adjudications.
Identifying Genuine Financial Interest and Threats
While prior rulings and robust case management rarely constitute apprehended bias, the threshold is often enlivened when the adjudicator's personal interests intrude upon the statutory process. If an adjudicator demonstrates a pecuniary interest in the outcome, they trigger a clear jurisdictional error.
For example, in Quickway Constructions Pty Ltd v Hick [2017] NSWSC 830, the adjudicator had been made a defendant in separate Supreme Court proceedings brought by one of the parties (Quickway) seeking to quash his earlier determinations. Because those proceedings exposed the adjudicator to a potential costs order against him personally, the Court found he had a personal financial interest in their outcome that was adverse to Quickway. That interest, combined with adverse rulings he had already made against Quickway and his own preliminary ruling on the question of his bias without initially notifying the parties, was sufficient to give rise to apprehended bias. Conduct of that kind — where the adjudicator's own financial or legal exposure becomes entangled with the dispute before them — fundamentally breaches the impartiality expected of decision-makers.
In such circumstances, a complaint to the Law Society of New South Wales may be appropriate if the adjudicator is a legal practitioner, but the immediate priority remains seeking Supreme Court intervention to quash the tainted determination.
The Severability Trap Under Section 32A of the SOPA
Even if your legal team successfully establishes that the adjudicator's treatment of a specific redesign variation was infected by jurisdictional error, the battle is not entirely won. The amendments to the SOPA introduced by the Building and Construction Industry Security of Payment Amendment Act 2018 (No 78), which commenced by proclamation in 2019, equipped the Supreme Court with a statutory mechanism that can severely limit the commercial value of your victory. This section explains how the Court can preserve the unaffected portions of a sub-consultant's payment award, reducing the strategic leverage of an appeal.
The Supreme Court's Discretionary Power to Set Aside
When the Supreme Court identifies a jurisdictional error, it is not compelled to automatically void the entire determination. The intervention power is discretionary. Under section 32A(1) of the Act, the Court must actively decide what orders are appropriate to remedy the specific error identified. If the error only relates to a discrete portion of the adjudicator's reasoning—such as an incorrect application of the rules to one specific engineering variation—the Court has the statutory flexibility to address that flaw without unwinding the entire statutory debt.
Section 32A of the Building and Construction Industry Security of Payment Act 1999 (NSW) grants the Supreme Court the discretionary power to set aside the whole or any part of an adjudicator's determination if it finds that a jurisdictional error has occurred.
Unlike substantive building disputes between homeowners and contractors heard before the NSW Civil and Administrative Tribunal (NCAT) under the Home Building Act 1989 (NSW), the Supreme Court's role in reviewing adjudication determinations is purely supervisory. It does not remake the decision or recalculate the fees; it simply determines whether the adjudicator had the authority to make the decision they made, and if not, how much of that decision must be set aside.
Severing the Affected Portion of the Determination
The application of section 32A(2) fundamentally alters the risk profile for respondents. Rather than voiding the entire determination, the Supreme Court can sever the specific part affected by jurisdictional error and uphold the valid portions of the adjudicator's award. If an adjudicator makes a reviewable error regarding a $20,000 redesign variation but correctly calculates the remaining $80,000 of the sub-consultant's claim, the Court may isolate and quash the $20,000 portion. This means the architect is likely to remain liable for the $80,000 statutory debt.
Before the severability amendments, the threat of Supreme Court proceedings carried genuine commercial weight. A respondent who identified even a single arguable jurisdictional error could use the prospect of a full quashing to drive settlement negotiations — the sub-consultant faced the possibility of walking away with nothing and restarting the process. That leverage has been substantially eroded. Sophisticated claimants, and the solicitors who advise them on consultant-side briefs, are acutely aware that their core claim — the undisputed portions of the payment schedule — will almost certainly survive any challenge.
What this means in practice is that the threat of Supreme Court proceedings is now most credible where the jurisdictional error infects the whole of the adjudicator's analysis, rather than a discrete variation item. If you are dealing with an adjudicated amount where the contaminated reasoning touches only a single line item, the sub-consultant's solicitors will call your bluff, and the economics of proceedings will rapidly favour settlement at a modest discount.
Practitioners who have run these matters through to hearing will tell you that the costs of a contested Supreme Court application — including interlocutory injunction applications and security for the adjudicated amount — routinely approach or exceed the value of the severable portion, which is precisely why robust payment schedule drafting must do the work that appeals cannot.
Consequently, the strategic deployment of Calderbank offers — formal written settlement offers that carry costs consequences if the receiving party fails to beat the offer at hearing — during Supreme Court proceedings must be carefully calibrated to account for the likelihood that the sub-consultant may still secure partial enforcement of the determination. If the architect's Calderbank offer accurately predicts the severed outcome, the sub-consultant may be ordered to pay the architect's costs from the date the offer was served. However, if the offer is set too aggressively and the sub-consultant retains more than the offered amount after severance, the costs protection is lost.
Practitioners should factor the likely post-severance enforceable amount into any offer, rather than pitching the offer on the assumption that the entire determination will be quashed.
The Commercial Viability of Commencing Proceedings
The severability mechanism forces architectural practices to undertake a brutal commercial risk calculation before commencing proceedings. Engaging in Supreme Court litigation is notoriously expensive, and the prospect of severance means you may spend tens of thousands of dollars on legal fees only to have a portion of the determination quashed, leaving you to pay the balance of the sub-consultant's claim plus your own costs.
The insolvency exposure in this context deserves direct attention because it is consistently underestimated by practice principals who view a Supreme Court appeal as a commercially neutral holding position. A statutory demand founded on an adjudicated amount carries the same machinery as any other statutory demand — once served, your practice has 21 days to apply to set it aside or pay the debt, and the grounds for setting aside a demand based on an adjudicated amount are narrow. An adjudication determination that has been converted to a judgment debt is not the same as a genuinely disputed debt, and courts have generally been reluctant to set aside statutory demands where the underlying amount was the product of a statutory process the respondent participated in.
The practical consequence is that if your practice cannot fund payment of the un-severed portion into court while the appeal runs, the sub-consultant can pursue winding up proceedings even while a Supreme Court challenge is on foot.
For sole-director architectural practices carrying project-specific cash flow, this is not a theoretical risk — it is the scenario that forces commercially driven settlements well before any judge reviews the adjudicator's conduct.
Furthermore, while you are pursuing an appeal that may only partially succeed, the preserved portion of the determination remains an enforceable debt. Failure to pay the un-severed amount creates a separate exposure channel, as the sub-consultant can obtain a judgment debt and issue a statutory demand, triggering potential insolvency proceedings against your practice long before the general timelines under the Limitation Act 1969 (NSW) (AustLII) expire.
To make this exposure concrete, consider the enforcement sequence that unfolds once the adjudicator's determination is issued. First, the sub-consultant requests an adjudication certificate from the Authorised Nominating Authority under section 24 of the Act. That certificate is then filed as a judgment for a debt in a court of competent jurisdiction under section 25, at which point it has the same force as if the court had originally ordered payment. The sub-consultant can then serve a statutory demand under section 459E of the Corporations Act 2001 (Cth), requiring your practice to pay the judgment debt within 21 days.
If you fail to pay or to successfully apply to set aside the statutory demand within that 21-day window, the sub-consultant can file a winding-up application on the basis that your practice is presumed to be insolvent. This entire sequence — from adjudication certificate to winding-up application — can unfold in a matter of weeks, well before a contested Supreme Court review reaches a hearing.
Front-Loading Your Defence Against Sub-Consultants in the Payment Schedule
Because challenging an adjudication determination in the Supreme Court is an uphill, expensive battle fraught with severability risks, your primary defensive posture must be established long before an adjudicator is appointed. This section explains why the payment schedule is where practice principals must lock in their jurisdictional boundaries and definitively reject unfounded variation claims from structural and services engineers.
Documenting Coordination Failures Versus Design Changes
If your architectural practice intends to reject a sub-consultant's claim for redesign variations, the specific reasons must be comprehensively detailed in the payment schedule within the tight statutory timeframe. If the engineer's redesign was necessary to rectify their own detailing errors or failure to coordinate with the primary architectural model, rather than representing a compensable change in client scope, this distinction must be explicitly stated. Relying on vague assertions or generic rejections prevents the adjudicator from understanding the contractual allocation of risk and effectively removes your ability to rely on those arguments later.
To illustrate the difference, compare the following two payment schedule responses to an identical claim by a structural engineer for $45,000 in redesign variations:
A poorly drafted response might state: "The claimed redesign variations are rejected. The structural engineer's work was deficient and no additional payment is warranted."
A robust response would state: "The respondent withholds payment of $45,000 claimed under variation items 3, 7 and 12. Each of these items relates to redesign work necessitated by the claimant's failure to coordinate its structural detailing with the architectural model issued under transmittal T-041 dated 15 January 2026, in breach of clause 4.3(b) of the Sub-Consultant Agreement dated 1 September 2025. Specifically, variation item 3 ($18,000) relates to the redesign of the Level 2 transfer beam connection, which the claimant detailed to a superseded architectural grid that had been updated in Revision C of the architectural drawings issued on 3 December 2025.
The claimant acknowledged receipt of Revision C by email on 5 December 2025. This work does not constitute a compensable variation under clause 9.1 of the Sub-Consultant Agreement because it was required to rectify the claimant's own coordination failure, not a change in the client's scope of works."
The first response gives the adjudicator nothing to work with and, critically, may prevent the architect from expanding on those reasons in its adjudication response submissions. The second response locks in the contractual clause, identifies the specific transmittal and revision history, and draws the distinction between a coordination failure and a compensable scope change — precisely the factual matrix the adjudicator needs to rule in the respondent's favour.
In New South Wales, an architect's primary opportunity to defend against a sub-consultant's payment claim under the SOPA framework is by providing comprehensive reasons for withholding payment within a validly issued payment schedule.
Ensuring you issue a valid payment schedule requires strict adherence to the business day calculation rules prescribed under the Act. Failing to provide detailed reasons within this period strips you of your primary evidentiary foundation and drastically increases the likelihood of an adverse, yet legally unassailable, adjudication outcome.
The reason this statutory deadline is so unforgiving is that the adjudicator's jurisdiction to consider the respondent's defence is confined to the reasons included in the payment schedule. Under section 22(2)(d) of the Act, the adjudicator considers the payment schedule together with all submissions duly made by the respondent in support of the schedule. If a reason for withholding payment is not articulated in the payment schedule itself, the respondent cannot introduce that reason for the first time in its adjudication response.
This means that an architect who fails to state in the payment schedule that a redesign was caused by the engineer's coordination failure — rather than a client-directed scope change — is procedurally barred from raising that argument before the adjudicator, regardless of how strong the underlying evidence may be.
Avoiding Scope Expansion in the Payment Schedule
Warning:
Drafting a payment schedule requires precision; introducing irrelevant grievances or broad contractual disputes can inadvertently expand the adjudicator's jurisdiction beyond the scope of the original payment claim. Adjudicators often commit reviewable jurisdictional errors when they determine matters that were never properly raised, but if an architect's poorly drafted schedule introduces those issues, it may validate the adjudicator's broader assessment. Consequently, an overly expansive payment schedule may inadvertently destroy a viable ground for appeal by implicitly authorising the adjudicator to rule on matters that should have remained outside the adjudication.
Architects should review relevant construction law publications and consider seeking independent legal advice to ensure their payment schedules are tightly drafted. To mitigate exposure when defending against consultant claims, contact Merlo Law for early dispute strategy. Furthermore, ensuring that coordination disputes remain focused on contractual performance rather than escalating into broader site-wide design liability issues is critical. An overly broad payment schedule that introduces allegations about site safety or regulatory non-compliance — matters that fall outside the sub-consultant's payment claim — risks inviting the adjudicator to make findings on issues you never intended to put in play, while simultaneously diluting the specificity of your contractual defence.
Conclusion
Receiving an adjudication determination that awards payment to a sub-consultant for redesign work necessitated by their own detailing errors is intensely frustrating for any architectural practice. The immediate impulse to challenge the decision based on perceived adjudicator bias or incompetence is understandable, but legally fraught. As we have established, the Supreme Court of New South Wales requires proof of a genuine jurisdictional error—such as a breach of natural justice or apprehended bias under the strict "fair-minded lay observer" test—before it will intervene. Mere errors of contract interpretation, or unilateral dissatisfaction with an adjudicator's past rulings, are rarely sufficient to quash a determination.
Furthermore, the introduction of the severability mechanism under section 32A of the SOPA means that even a successful appeal may result in the Court severing only the tainted portion of the decision, leaving your practice liable for the remainder of the statutory debt. This commercial reality underscores the futility of relying on Supreme Court reviews as a primary dispute resolution strategy.
Your most effective defence against unjustified sub-consultant claims must be deployed long before an adjudicator is appointed. Review your internal contract administration processes today, and ensure that your project architects are equipped to draft robust, timely, and highly specific payment schedules that lock in the jurisdictional boundaries of every dispute.
FAQs
What is the difference between an error of law and a jurisdictional error in an adjudication?
An error of law occurs when an adjudicator misinterprets a contract or misapplies a legal principle, which is generally not reviewable under the interim SOPA framework. A jurisdictional error occurs when the adjudicator acts outside their statutory authority, such as denying natural justice or exhibiting apprehended bias. In New South Wales, the Supreme Court typically only intervenes to quash determinations infected by genuine jurisdictional error.
Can an adjudicator's misunderstanding of an architect's coordination role be appealed?
Usually, no. If the adjudicator considers the relevant sub-consultant agreement and the submissions but simply misinterprets the architect's design coordination responsibilities, this is generally classified as a non-reviewable error of law. Unless the misinterpretation amounts to a failure to perform their statutory mandate, the Supreme Court is unlikely to set the determination aside.
Does an adjudicator's involvement in a previous project dispute prove apprehended bias?
No, prior involvement alone is typically insufficient. The threshold for apprehended bias requires demonstrating that a fair-minded lay observer might reasonably apprehend that the adjudicator lacked impartiality. Familiarity with the project or the parties—or even unilateral criticism from a respondent in a past dispute—does not automatically satisfy this strict common law test.
What happens if the Supreme Court finds a jurisdictional error in only one part of a determination?
Under section 32A(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW), the Supreme Court has the discretionary power to sever the specific portion of the determination affected by the error. The Court may quash the tainted part while confirming the remainder of the sub-consultant's adjudicated payment award, which then remains enforceable through the Act's separate enforcement provisions.
Does lodging a Supreme Court appeal stop the requirement to pay the sub-consultant?
No, commencing review proceedings does not automatically operate as a stay on the enforcement of the determination. Architects will often need to seek an injunction and may be required to pay the disputed adjudicated amount into court, or provide security, while the Supreme Court reviews the matter.
Why is the payment schedule so critical when defending against a sub-consultant claim?
Because challenging a determination in the Supreme Court is difficult and costly, the payment schedule is the primary mechanism for an architect to establish their jurisdictional boundaries and detail the reasons for withholding payment. Failing to explicitly state that a redesign was required due to a sub-consultant's coordination failure within the statutory timeframe removes the foundation of your defence.
This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law
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