The Critical Path – C&I Newsletter, August 2026
Market Insights
CLARITY IS KING: LESSONS FROM COOPER & OXLEY GROUP PTY LTD V KOITKA [2026] WASC 4
In the first judicial review of an adjudicator’s determination under the Building and Construction Industry (Security of Payment) Act 2021 (WA), the Supreme Court of Western Australia partially quashed the determination after finding the adjudicator committed jurisdictional error by failing to consider backcharges and an outstanding debt claimed as set-offs. This decision sends a clear message: parties wishing to rely on set-offs, backcharges or previous payments in an adjudication, must articulate those claims plainly and expressly – where this occurs an adjudicator is obliged to separately consider them. This article examines the Supreme Court of Western Australia’s recent decision in Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4.
This article was written by Kate Morrow, Partner, and Elizabeth Lester, Solicitor.
ENFORCEMENT AND EVIDENTIARY LIMITS UNDER SOPA: KEY TAKEAWAYS FROM AARO GROUP PTY LTD V MONADELPHOUS ENGINEERING ASSOCIATES PTY LTD [2026] WASC 143
The Supreme Court of Western Australia has reinforced SOPA’s strong enforcement regime, confirming that adjudication material will generally be inadmissible in enforcement proceedings where it addresses the merits of the underlying dispute. In Aaro Group Pty Ltd v Monadelphous Engineering Associates Pty Ltd [2026] WASC 143, the Court’s refusal to suspend the enforcement of the judgments highlights the importance of relying on fresh, admissible evidence to establish special circumstances.
This article was written by Natasha Breach, Partner, Michael Harris, Special Counsel, and Emily Graham, Solicitor.
RECENT RECORD FINES HIGHLIGHT WORKSAFE’S FOCUS ON EXCLUSION ZONE FAILURES
A Western Australian construction company has been hit with a record $1.75 million fine – the highest penalty ever imposed under WA’s workplace safety laws – after a worker was fatally struck by a falling structural steel column. This record penalty echoes other recent prosecution activity in Western Australia for exclusion zone breaches in the construction industry.
This article was written by Danielle Flint, Partner, and Audrey Ooi, Associate.
MITIGATION OF LOSS: HAVING OTHERS RECTIFY OR COMPLETE THE BUILDER’S WORKS FOLLOWING A BREACH OF CONTRACT
An entitlement to damages following a breach of contract or negligence may be reduced to the extent the claimant could have taken reasonable steps to reduce the loss. Builders often claim that because they were not given the opportunity to rectify defective work that there has been a failure to mitigate loss. The New South Wales and now Victorian Court of Appeal have provided some welcome clarity around what is reasonably expected by claimants in mitigating their loss following a breach of a construction contract. This article discusses the decisions in Ceerose Pty Ltd v The Owners – Strata Plan No 89074 [2025] NSWCA 235 and Bata v Pathik [2026] VSCA 138 and in particular, circumstances in which it may be reasonable for a claimant to allow others to rectify defects or complete the work of the builder and have that cost recoverable as damages at law.
This article was written by David Jury, Partner, and Timothy Connelly, Senior Associate.
ARGUE NOW, PAY LATER? RECENT LIMITS ON RECOURSE TO PROJECT SECURITY
This article considers two recent interlocutory decisions concerning project security in construction contracts: Alstef Australia Pty Ltd v Brisbane Airport Corporation [2026] NSWSC 764 (Alstef) and York Property Holdings Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd (Tomkins) [2026] QSC 156. The cases show that recourse may be restrained where there is a strong prima facie case that the statutory framework, or the proper construction of the underlying contract, does not support the call. Following Alstef and Tomkins, contract updates may be required to ensure a party can have recourse to security when it needs to do so.
This article was written by Angela Armstrong, Partner, Brian Rom, Partner, and Daniel Read, Graduate.
PAY NOW, ARGUE LATER: NSW COURT OF APPEAL CLARIFIES PAYMENT CLAIMS AND “SELF-CONTAINED UNITS” IN AJ PORTELLI MEDICAL V BLACK SHEEP BUILDING
This article considers the NSW Court of Appeal’s decision in AJ Portelli Medical Pty Ltd ATF A J Portelli Medical Trust v Black Sheep Building Pty Ltd [2026] NSWCA 99, which provides important guidance on payment claims under the Building and Construction Industry Security of Payment Act 1999 (NSW). The decision reinforces the “pay now, argue later” philosophy underpinning the Security of Payment Act, and clarifies that specialist disability accommodation with shared facilities does not constitute “residential building work” for the purposes of the Home Building Act 1989 (NSW).
This article was written by Matthew Graham, Partner, Shaniece Haifa, Associate, Rafael Priest, Graduate.
BACK TO THE ADJUDICATOR: SUPREME COURT REVIVES VOID DETERMINATION
In Tomkins Commercial & Industrial Builders Pty Ltd v Starline Interiors Pty Ltd [2026] QSC 21, the Supreme Court of Queensland confirmed that a court may remit an adjudication application back to an adjudicator after an adjudication decision has been declared void for jurisdictional error, even where the statutory adjudication timeframe has expired. The Court also confirmed it may effectively restart the adjudication timetable to enable a fresh determination to be made.
The decision is significant because a successful judicial review challenge may no longer bring an adjudication dispute to an end. Instead, where the error is capable of correction, the dispute may simply be sent back to the adjudicator for redetermination. Parties should therefore carefully consider whether judicial review is likely to produce a substantive outcome or merely delay payment.
This article was written by Paul Gordon, Partner, and Kurt Wildermuth, Special Counsel.
CROSSING THE LINE: WHEN AGGRESSIVE AND THREATENING BEHAVIOUR JUSTIFIES IMMEDIATE CONTRACT TERMINATION – MACDONALD & CO V KHARTY [2026] VSC 336
In the recent decision of MacDonald & Co v Kharty [2026] VSC 336, the Victorian Supreme Court held that aggressive and threatening behaviour constituted repudiation by renunciation. Such conduct entitled the principal to terminate the subcontract at common law without first complying with the contractual show cause procedure under the subcontract. The decision is one of the first Australian decisions to recognise that threatening behaviour towards a contractual counterparty justifies immediate termination of a contract.
The decision reveals that aggressive and threatening behaviour is no longer just a Workplace Health and Safety issue, but a contractual one.
This article was written by Leighton Moon, Partner, Tara Nelson, Special Counsel, and Lachlan Spriggs, Solicitor.
SPECIAL REFEREE’S REPORT ADOPTED IN FACADE SUBCONTRACT DISPUTE
In Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd (No 3) [2026] VSC 316, the Supreme Court of Victoria considered whether to adopt a special referee’s report under Order 50.04 of the Supreme Court (General Civil procedure) Rules 2025 (Vic). The dispute concerned a façade installation subcontract for a development at 447 Collins Street, Melbourne (Project). The Court essentially adopted the special referee’s report and rejected Yuanda Vic Pty Ltd’s (Yuanda) objections to the referee’s conclusions on termination, unpaid contract work, variations and recoupment of paid variations.
This article was written by Paul Graham, Partner, and Campbell Dawes, Solicitor.
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