Say it plainly: Supreme Court partly sets aside SOPA adjudication over overlooked set-offs
In Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4, the Supreme Court of Western Australia partly set aside an adjudicator’s determination under the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOPA) because the adjudicator failed to consider two set-offs claimed by the head contractor. The Court rejected other complaints, finding they were either not clearly raised in the adjudication or were really an attempt at a merits review.
The decision, delivered by Lemonis J on 15 January 2026, is a useful guide to when an adjudicator’s determination can be overturned. It is also a clear warning to both sides of a payment dispute: if a point matters, say it clearly, in plain language, in your payment schedule and adjudication submissions.
Key takeaways
Only jurisdictional error will do. An adjudicator’s determination cannot be appealed. It can only be set aside for jurisdictional error, such as failing to consider a set-off the respondent clearly raised. Getting the contract or the facts wrong is generally not enough.
Adjudicators don’t have to hunt for your arguments. It is up to the parties to identify the issues. An adjudicator is not required to “trawl through hundreds of pages” to find them.
A clearly raised set-off must be considered. If a respondent clearly claims a set-off in its payment schedule and adjudication response, and the adjudicator ignores it, that may be jurisdictional error.
Unclear points can be lost. Claims about previous payments that were only implied in a spreadsheet, and first spelled out after the determination, could not be relied on.
Who needs to know?
Head contractors and principals preparing payment schedules and adjudication responses, particularly where set-offs, backcharges or previous payments are in issue.
Subcontractors and contractors applying for adjudication, or defending a determination in court.
Contract administrators and commercial managers who prepare payment certificates and supporting spreadsheets.
Background
The subcontract and the progress claim
Cooper & Oxley engaged Caledonia Contracting (Caledonia) as a subcontractor on the Hamersley Golf Course redevelopment. There were disputes about Caledonia’s work and the supporting material for its progress claims. Caledonia suspended work on 6 July 2024, and Cooper & Oxley terminated the subcontract for convenience on 9 July 2024.
On 15 August 2024, Caledonia made progress claim 10 for $223,726.84. Cooper & Oxley disputed that the claim was valid. Without prejudice to that position, it issued a payment certificate assessing the claim at negative $543.85 (ex GST), supported by a detailed spreadsheet. Cooper & Oxley treated the claim as if it were a final claim. It valued the work as 100% complete, deducted the value of unfinished work, and then applied set-offs for:
backcharges of $48,420.16
defect remediation of $3,415.90
an outstanding debt of $10,407.96 carried over from progress claim 9.
The adjudication
Caledonia applied for adjudication. The adjudicator found the claim was valid and was not a final claim, so Cooper & Oxley could not deduct the value of unfinished work. He ordered Cooper & Oxley to pay $131,935.76 (inc GST), plus interest and half the adjudication fees.
Cooper & Oxley applied to the Supreme Court for judicial review, arguing that the adjudicator had failed to perform his function under s 38(1)(a) of SOPA.
The grounds of review
Cooper & Oxley relied on two grounds:
Ground 1: the adjudicator failed to consider the termination of the subcontract and its consequences, namely the clause limiting Caledonia’s entitlements after termination (cl 36.8) and Cooper & Oxley’s set-off rights (cl 17.10).
Ground 2: the adjudicator failed to have any, or any proper, regard to the three specific set-offs (backcharges, defect remediation and the progress claim 9 debt).
The legal principles
Lemonis J confirmed the following principles, drawing on earlier decisions under the Construction Contracts Act 2004 (WA):
A determination cannot be appealed, and is not reviewable for non-jurisdictional errors of law. The Court can set aside all or part of a determination for jurisdictional error (s 66).
An adjudicator’s error in construing and applying the contract is not jurisdictional error.
Failing to take into account a respondent’s response, including the merits of a set-off, is jurisdictional error, but only if the failure is material enough to affect the exercise of power. Overlooking something inconsequential is unlikely to qualify.
An error of fact is not necessarily jurisdictional error, although it may be if it shows the adjudicator failed to consider something.
The progress claim and payment schedule set the parameters of the adjudication. The parties must identify the issues, ideally in plain language. Where a party is represented by lawyers, the adjudicator is usually entitled to treat their submissions as defining the issues.
The decision
Ground 1: not made out
The Court found that termination did not change the adjudicator’s task. Cooper & Oxley’s set-off rights under cl 17.10 survived termination, and its counsel accepted that the adjudicator had to consider previous payments and set-offs whether or not the subcontract had been terminated. The determination showed the adjudicator understood that, and had considered set-offs in several places. The fact that he did not refer to cl 17.10 or cl 36.8 by number was not an error.
Cooper & Oxley’s argument about cl 36.8 also changed during the case, and it had not made any submission to the adjudicator about how that clause should be read. The Court noted that Cooper & Oxley’s original reading of cl 36.8, which would have stopped Caledonia claiming for unpaid work after termination, would likely have been void under s 111 of SOPA, which prevents contracting out.
Previous payments: raised too late
At the hearing, Cooper & Oxley tried to broaden its case to argue that the adjudicator ignored its position that it had already paid for some of the claimed work. The Court held that this fell outside Ground 1, and in any event failed.
The payment schedule and adjudication material did not expressly say that any of the claimed work had already been paid for. Cooper & Oxley argued this could be inferred from a “Previous % complete” column in its spreadsheet, but there was no evidence the industry understood it that way, and the adjudicator did not. As the Court observed, saying something has already been paid does not require specialist language. The first time previous payments were clearly raised was in a request to correct the determination after it was made, which the Court found “difficult to understand”.
Ground 2: made out in part
Backcharges: jurisdictional error. The backcharges appeared under their own heading in the spreadsheet, but no amount was carried into the “Net Total this Claim” column, unlike the other set-offs. The Court accepted it was “understandable” that the adjudicator missed them. Even so, read with Cooper & Oxley’s adjudication submissions and its witness’s statutory declaration, the set-off had been claimed and maintained. The backcharges were about 22% of the claim, and the adjudicator did not address them at all. That was jurisdictional error.
Defect remediation: no error. The adjudicator considered the two invoices relied on and found he could not link the work to any defect attributable to Caledonia. He asked the right question. Cooper & Oxley’s complaint that he should have given more weight to related emails was a matter for merits review, not jurisdictional error.
Progress claim 9 debt: jurisdictional error. The adjudicator said he could not find any reason in the payment schedule for the $10,407.96 deduction. The Court found that “not explicable”: the spreadsheet heading identified progress claim 9 as the basis, and payment schedule 9, which was before the adjudicator, showed that exact amount owing. Had the adjudicator considered progress claim 9 and rejected the deduction, that might have been only an error of fact. But he never engaged with the stated basis for it.
The Court’s final observation
Lemonis J closed with an observation for the industry. Progress claims are interim claims, and SOPA intends them to be dealt with quickly, efficiently and fairly. Parties should make sure their positions are clearly expressed, which reduces the need for, and cost of, court proceedings like this one. As his Honour put it, clarity is usually achieved by the use of plain language.
What this means in practice
For respondents (head contractors and principals)
Spell out every set-off. State each set-off, the amount and the basis for it in the payment schedule itself. Make sure the figures carry through to the totals, and don’t leave it to the adjudicator to work out from a spreadsheet.
Say what has already been paid. If you say part of the claim has already been paid, say so expressly and identify the payments. Don’t rely on percentage columns or industry shorthand.
Make your best case in the adjudication. Points raised for the first time after the determination, or in court, are unlikely to help.
Explain how the contract applies. If you rely on a contract clause, explain in your submissions how it applies to the claim. Bear in mind that clauses which restrict SOPA rights may be void under s 111.
For claimants (subcontractors and contractors)
Expect scrutiny of the determination. Determinations can be set aside in part where clearly raised set-offs are overlooked, so it helps to engage with every item in the payment schedule in your adjudication application.
Not every error opens the door. Disagreements about how the adjudicator weighed the evidence or construed the contract will generally not justify setting the determination aside.
How we can help
Lang Litigation and Construction Law advises principals, contractors and subcontractors on payment claims, payment schedules, adjudication applications and responses, and judicial review of adjudication determinations under the Building and Construction Industry (Security of Payment) Act 2021 (WA). If you need help with a payment dispute, contact us.
This article is general information only and is not legal advice. You should seek specific advice about your circumstances.