The Court held that an adjudicator under the Building and Construction Industry Security of Payment Act 1999 (NSW) commits jurisdictional error by simply awarding the claimed amount after rejecting the respondent's defences, without independently assessing whether the amount claimed represents the reasonable value of construction work under the contract. Where the contract is a 'do and charge' contract (as distinct from a fixed price or cost plus contract), the adjudicator must assess the reasonableness of the charges, including any builder's margin or project management fee, even if the respondent does not expressly raise this issue. A 'do and charge' contract is not necessarily a 'cost plus' contract; it gives rise to an entitlement to a reasonable price, which requires evaluation of reasonableness rather than mere verification that costs were incurred.
The full text is available to signed-in members, including the 2 later cases that cite this judgment.