Introduction

The recent decision in Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4, is the first decision of the Supreme Court of Western Australia concerning the judicial review of an adjudicator’s determination made pursuant to the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOPA). The decision provides important guidance on the scope and limits of judicial review of adjudicators’ determinations under the SOPA and delivers a pointed message to industry participants: clarity and precision in payment claims, payment schedules and adjudication submissions is paramount.

This case serves as a timely reminder that if you wish to rely on set-offs, backcharges or previous payments in an adjudication, those claims must be articulated plainly and expressly. As failing to do so may mean that even a meritorious position is lost, merely because it was never properly brought to the adjudicator’s attention. Whereas where an adjudicator fails to consider a claim / set off that has been clearly articulated this could amount to a jurisdictional error.

Background

Cooper & Oxley Group Pty Ltd (Cooper & Oxley) engaged Caledonia Contracting Pty Ltd (Caledonia) as a subcontractor for the Hamersley Golf Course redevelopment. A dispute arose between the parties concerning Caledonia’s work and the sufficiency of the supporting material provided for its progress claims.

Caledonia suspended works and Cooper & Oxley terminated the subcontract pursuant to clause 36.7, a “no fault termination” provision entitling it to terminate for convenience at any time.¹

Following termination, Caledonia submitted Progress Claim 10 in the sum of $223,726.84. Cooper & Oxley responded disputing the validity of the claim, and without prejudice to that position, assessed the claim in the negative amount of $543.85 (excluding GST), issuing Payment Certificate 10. Cooper & Oxley’s assessment incorporated set-offs for backcharges ($48,420.16), defect remediation ($3,415.90) and an outstanding debt from Progress Claim 9 ($10,407.96).

On 17 September 2024, Caledonia applied for adjudication of the progress claims under the SOPA. On 16 October 2024, the adjudicator, Mr William Koitka (Koitka) delivered his determination, finding that Cooper & Oxley was required to pay Caledonia $131,935.76 (including GST), plus interest and a share of the adjudication fees. Cooper & Oxley subsequently sought judicial review of the determination in the Supreme Court of Western Australia.

Relevant contractual provisions

Three clauses of the subcontract were central to the dispute, being:

1. 1. clause 17.10 – which conferred a broad right of set-off upon Cooper & Oxley against any monies due to Caledonia.²
   2. clause 36.7 – permitted Cooper & Oxley to terminate for convenience at any time by notice, described as a “no fault termination”.³ and
   3. clause 36.8 – which limited Caledonia’s entitlement following a no-fault termination to:
      1. any amount then due but unpaid;
      2. an amount for works carried out in accordance with the subcontract to the date of termination which was not included in a previous payment claim and which was properly payable; and
      3. the costs of certain goods and materials reasonably ordered.⁴

Importantly, the Contract provided that clauses 17.10 and 36.8 (amongst others) survived the expiry or earlier termination of the subcontract.

Grounds of review

Cooper & Oxley alleged jurisdictional error on two grounds, being:

1. Ground 1: that the adjudicator had failed to perform his functions under section 38(1)(a) of the SOPA, by failing to consider:
   1. that Cooper & Oxley had terminated the subcontract pursuant to clause 36.7 and Caledonia’s entitlements were therefore limited by clause 36.8;
   2. Cooper & Oxley’s rights of set-off under clause 17.10 of the subcontract.
2. Ground 2: that the adjudicator failed to perform his functions under section 38(1)(a) of the SOPA, by failing to have any, or any proper, regard to Cooper & Oxley’s entitlement to set-off the sum of $62,243.97 (excluding GST) in respect of:
   1. backcharges;
   2. defect remediation; and
   3. outstanding debts due.

Applicable legal principles

The Court confirmed that an adjudicator’s decision is not subject to appeal and is not amenable to review for non-jurisdictional errors of law. Proceedings may only be brought on the basis that the adjudicator has made a jurisdictional error.

Critically, if an adjudicator makes an error in construing, and subsequently applying, a construction contract, that error will not constitute a jurisdictional error. However, a failure by an adjudicator to take into account a respondent’s response to a claim (including the merits of any set-offs) will constitute jurisdictional error, because it is a failure to consider a matter required by the SOPA. His Honour added an important qualification: the failure to take a matter into account must be of such a nature as to affect the exercise of power by the adjudicator. As a failure to consider an inconsequential matter would be unlikely to give rise to jurisdictional error.

It was also observed that an adjudicator is not required to “trawl through hundreds of pages of materials put forward by the parties to discern what points might be raised”.⁵ It is incumbent on the parties to indicate the issues and matters they contend the adjudicator needs to consider, and this is best done in plain language.

Decision

Ground 1: Not made out

The Court held that the adjudicator’s finding (that the purported termination on 9 July 2024, had no bearing on determining the adjudication application) was directed to Caledonia’s contention that the termination was invalid, and therefore limited the scope of matters Caledonia could raise.

In substance, the adjudicator did have regard to the issues falling within clauses 17.10 and 36.8. The adjudicator accepted in the determination that he needed to consider matters Cooper & Oxley had raised by way of set-off, giving several examples and expressly referring to Cooper & Oxley’s “right to set-off”.⁶ The fact that the adjudicator did not specifically refer to clauses 17.10 and 36.8 did not give rise to jurisdictional error.

As to clause 36.8, the Court noted that Cooper & Oxley’s own position on its proper construction evolved over the course of the proceedings. In its initial submissions, Cooper & Oxley contended that clause 36.8(b) prevented Caledonia from claiming for any work the subject of a previous progress claim – an interpretation which counsel ultimately accepted at the hearing was incorrect. The correct interpretation was that it prevented a claim only where the previous claim had been paid or otherwise satisfied. Because clause 36.8(b) did not alter how claimed previous payments were to be taken into account and introduce no additional limitations. Importantly, Cooper & Oxley did not put on any submissions to the adjudicator as to how clause 36.8 should be interpreted.

Cooper & Oxley’s counsel also accepted that regardless of whether the subcontract was terminated, the adjudicator was required to take into account previous payments and set-offs. This effectively conceded that termination did not alter the substance of the task before the adjudicator.

The Court also rejected an attempt by Cooper & Oxley to expand Ground 1 to encompass a contention that the adjudicator failed to have regard to previous payments. This was rejected on two bases:

1. the contention did not properly fall within Ground 1, which was predicated on the termination affecting the treatment of set-offs and payments; and
2. the Court was not satisfied that Cooper & Oxley had, in its payment schedule or adjudication material, clearly asserted that it had made previous payments for the work claimed.

The Court observed that the first express reference to previous payments appears to have been made only after the adjudication, in submissions seeking correction of the determination.

Ground 2: Made out in part

Backcharges: Jurisdictional error found

The Cooper & Oxley spreadsheet contained a separate section headed “BACK CHARGES” listing various items totalling $48,420.16.⁷ However, no amount was entered in the “Net Total this Claim” column for those items, unlike the defect remediation and outstanding debts sections.⁸ The Court acknowledged that it was understandable the adjudicator did not appreciate that a set-off was being claimed. Nonetheless, the Court was satisfied that the Cooper & Oxley spreadsheet, taken together with Cooper & Oxley’s written submissions and the supporting statutory declaration (which referred to backcharges being “applied” and subject to set-off in the sum of $62,243.97), did indicate that a set-off was claimed. The backcharges represented approximately 22% of Caledonia’s total claim, were raised in submissions and in the statutory declaration, and the adjudicator was required to separately consider them. The failure to do so constituted a jurisdictional error.

Defect remediation: No jurisdictional error

The adjudicator expressly addressed the two defect remediation claims at paragraphs 214 and 216 of the determination.⁹ He considered the invoices provided and concluded that he was unable to establish a link between the work described in the invoices and any defect attributable to Caledonia. The Court found that the adjudicator asked the right question and Cooper & Oxley’s complaint fell “very much within the realm of a merits review” and did not constitute jurisdictional error.¹⁰

Outstanding debts due (Progress Claim 9): Jurisdictional error found

The adjudicator stated in the determination “I am not able to find any reason in the payment schedule for this deduction”.¹¹ The Court found this was not explicable, as both the Cooper & Oxley spreadsheet and the heading in the determination itself made clear that the sole basis for the deduction was Progress Claim 9. Payment Schedule 9, which was before the adjudicator, stated the current payment due was “($10,407.96)”, with brackets conveying that Caledonia owed that amount to Cooper & Oxley.¹² The Court drew the inference that the adjudicator did not have regard to whether Progress Claim 9 supported the claimed set-off, and found this constituted jurisdictional error.

Industry implications

This decision carries several important lessons for participants in the WA building and construction industry, including:

1. clarity in payment schedules and adjudication submissions is paramount, including as to previous amounts paid;
2. adjudicators are not required to trawl through materials to work out the parties’ positions;
3. the distinction between jurisdictional error and merits review remains critical; and
4. set-off claims must be expressly and unambiguously articulated.

This article was written by Kate Morrow, Partner and Elizabeth Lester, Solicitor.

¹ Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4, 60, 64.
²Ibid, 61.
³Ibid, 61, 64
⁴Ibid.
⁵Ibid, 50.
⁶Ibid, 96.
⁷Ibid, 136.
⁸Ibid, 78.
⁹Ibid, 150.
¹⁰Ibid, 158.
¹¹Ibid, 160.
¹²Ibid, 162.