A major national engineering construction contractor and local engineering subcontractor entered into a Contract in March 2007 pursuant to which the Applicant was to carry our civil works to the value of $1.7m at a Western Australian location.

In December 2007, the subcontractor submitted a Payment Claim in the sum of approximately $400k.

The contractor served the subcontractor with a Notice of Claim for damages and a right to set-off or deduct from any payments due. A dispute arose, and the subcontractor sought adjudication under the Construction Contracts Act (WA). The Institute of Arbitrators and Mediators Australia appointed Steve Lieblich as Adjudicator.

Steve found that the subject payment dispute arose with the serving of the Notice of Claim for damages.

Despite a conference in which the parties were encouraged to settle the dispute by negotiated mutual consent, the parties asked Steve to determine the matter.

He found that the Respondent was liable to pay the Applicant the sum of approximately $300k of the Payment Claim, as follows: the full amount claimed in the Payment Claim, less approximately $70k of liquidated damages and approximately $20k for damages pursuant to delays to a portion of the works, which may be due and thus may be deducted as a set-off amount from the Payment Claim in accordance with the Contract.

The contractor was also liable to the subcontractor one half of the adjudication costs, plus interest on the outstanding sum.