Last Updated on 29/10/2025 by Damin Murdock
The High Court’s decision in Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 remains an important authority on how adjudication determinations under the Building and Construction Industry Security of Payment Act 2009 (SA) (the Act) can be challenged in the courts. The ruling provides clarity on when an adjudicator’s decision may be set aside and underscores the purpose of the Security of Payment legislation in ensuring quick, interim progress payments in the construction industry.
Key Facts
Maxcon Constructions engaged Vadasz under a subcontract which required payments to the subcontractor to be withheld until a certificate of occupancy was issued. Crucially, that certificate depended on the builder certifying compliance with the head contract.
When a dispute arose over a payment claim, an adjudicator was appointed under the Act. The adjudicator ruled that the retention clause in the subcontract was void, as it amounted to a “pay when paid” provision, which is prohibited under the Act. Maxcon challenged this determination, arguing that the adjudicator had made an error of law.
The case raised two critical questions:
- Did the adjudicator make an error of law in finding the retention provision void?
- If so, could that error be a basis for the Supreme Court to quash the determination? In particular, was certiorari available for non-jurisdictional error of law on the face of the record under the Act?
High Court’s Decision
The High Court dismissed Maxcon’s appeal, confirming that:
- The retention clause was indeed a “pay when paid” provision, and therefore void under the Act.
- The Security of Payment Act preserves the Supreme Court’s jurisdiction to quash determinations for jurisdictional error.
- However, the Act does not permit review for non-jurisdictional errors of law on the face of the record.
In effect, even if an adjudicator misinterprets a contract or statute (an error of law within jurisdiction), their determination will stand unless it involves a jurisdictional defect.
The High Court drew a clear line between jurisdictional and non-jurisdictional errors. Jurisdictional error occurs when the adjudicator acts outside the scope of powers conferred by the Act, for example, failing to comply with statutory preconditions or determining issues outside the Act’s framework. Such errors justify judicial review and quashing of the determination. Non-jurisdictional error of law includes mistakes in interpreting a contract or statute while acting within power. These cannot be grounds for setting aside an adjudicator’s determination.
The Security of Payment scheme is designed to provide a fast and efficient mechanism for interim payments in the construction industry. Allowing review for every legal error would frustrate this purpose by bogging down determinations in lengthy court challenges. Instead, the Act strikes a balance so that jurisdictional errors can be corrected immediately, while non-jurisdictional errors can be addressed later through litigation or arbitration. This ensures that cash flow continues in the construction industry, which is the lifeblood of contractors and subcontractors.
Conclusion
For contractors, subcontractors, and principals alike, the message is clear, adjudication decisions under the Act are generally final and binding on an interim basis, subject only to challenge for jurisdictional error.
The decision in Maxcon Constructions Pty Ltd v Vadasz reinforces the limited scope of judicial review under the Security of Payment regime. A determination can be set aside only for jurisdictional error, not for non-jurisdictional mistakes of law.
By upholding this principle, the High Court has preserved the Act’s purpose to provide swift and reliable payment resolutions that keep construction projects moving, with more detailed disputes reserved for later, comprehensive proceedings.
Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
