No second bite of the cherry: NSW Court of Appeal decides upon matters of jurisdiction and abuse of process under security of payment legislation

Reinforcing the core objectives of the security of payment legislation 4 min read

In this Insight, we consider the New South Wales Court of Appeal’s decision in Kwik Flo Pty Ltd v SE Ware Street Dev Pty Ltd [2026] NSWCA 9.

The decision clarifies when an adjudicator’s finding of no jurisdiction under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) will nevertheless constitute a 'determination' under the SOP Act, and when taking steps to enforce a subsequent adjudication determination with contrary findings on the same jurisdictional issues may amount to an abuse of process.

This decision also reinforces the SOP Act's objective of ensuring contractors and subcontractors have a swift means for securing cashflow outside of formal litigation or arbitration proceedings.

Key facts and background

In or around March 2022, Kwik Flo Pty Ltd (Kwik Flo) and SE Ware Street Dev Pty Ltd (SE Ware) orally agreed to jointly develop SE Ware's land. They later fell into dispute over key terms of that oral agreement.

Kwik Flo claimed it was required to undertake and finance construction activities, and obtain a construction certificate, with SE Ware to pay 30% of the costs associated with the construction certificate.

SE Ware denied agreeing to this contribution, among other aspects of the alleged agreement.

Kwik Flo carried out some preliminary work on the land, but a construction certificate was never obtained and the land remains undeveloped.

Kwik Flo sought payment for the preliminary work undertaken, and two adjudications followed:

• In the first adjudication, the adjudicator decided that the oral agreement upon which Kwik Flo's payment claim was based fell within the exception in s7(2)(c) of the SOP Act (ie the consideration payable to Kwik Flo was not calculated by reference to the value of work carried out) and, therefore, the SOP Act did not apply. Kwik Flo then purported to withdraw this adjudication application and commenced a new application with a different adjudicator.
• In the second adjudication, the second adjudicator reached different findings on jurisdiction and contract terms, issuing a determination that $1.2 million was payable to Kwik Flo.

SE Ware commenced proceedings in the NSW Supreme Court to restrain Kwik Flo from enforcing the second adjudicator's determination.

The primary judge granted the injunctive relief sought by SE Ware, finding that the first adjudicator's jurisdictional decision amounted to a 'determination' under s22 of the SOP Act. As the 'determination' was valid, the primary judge found the steps taken by Kwik Flo to enforce the second adjudicator's determination to amount to an abuse of process, particularly given that the first adjudication determination had already decided upon the relevant issues.

Grounds of appeal

Kwik Flo appealed against the NSW Supreme Court's judgment on two grounds:

• Ground 1: the primary judge erred in concluding that the first adjudicator's finding of no jurisdiction nevertheless constituted a 'determination' under the SOP Act.
• Ground 2: the primary judge erred in granting injunctive relief to restrain the enforcement of the second determination on the basis of abuse of process.

The decision

The Court of Appeal dismissed the appeal, upholding the primary judge's findings on both grounds.

Ground 1: whether a 'determination' was made

The Court of Appeal upheld the primary judge's finding that the first adjudicator's decision on jurisdiction was a 'determination' under the SOP Act.

The following factors were critical to the Court of Appeal's reasoning:

• Purpose and policy underlying the SOP Act: the Court of Appeal reiterated that the SOP Act seeks to prevent the repetitious re-agitation of the same issues,¹ and provides for an expeditious, cash-flow-oriented process, with limited scope for judicial intervention.² Treating the first adjudicator's finding of no jurisdiction as a 'determination' under the SOP Act was consistent with this purpose.
  Importantly, this approach does not deprive a claimant of recourse. If a determination on jurisdiction is infected by jurisdictional error, it remains open to the claimant to seek to have that determination set aside or declared void.³
• Structure of the SOP Act: the Court of Appeal emphasised that the statutory structure, which sets out various procedural steps to be observed in an adjudicative process, provides the basis for the existence of an adjudicator's determination.⁴ In the present case, it was critical to the Court of Appeal's finding on Ground 1 that the first adjudicator's decision on jurisdiction was issued after all relevant procedural steps (including SE Ware's lodgement of an adjudication response) had been observed.⁵

These factors, when taken together with established authorities that provide that a non-court statutory body (eg an adjudicator) possesses incidental powers to decide upon jurisdiction to determine a matter,⁶ gave the Court of Appeal no reason to find that the primary judge erred with respect to Ground 1.

Ground 2: abuse of process

As the Court of Appeal found that the first adjudicator’s decision on jurisdiction was a valid 'determination' under the SOP Act, it likewise agreed with the primary judge's finding that Kwik Flo’s attempt to enforce the second adjudicator's determination amounted to an abuse of process.

That is because the second adjudicator's determination, which Kwik Flo sought to enforce in the NSW Supreme Court, turned on issues (namely, jurisdiction) that had already been validly determined by the first adjudicator.

To support this finding, the court endorsed authorities which underscore that the doctrine of abuse of process can be invoked to strain the pursuit of repetitious claims under the SOP Act.⁷

Accordingly, the primary judge's decision to grant injunctive relief restraining the enforcement of the second adjudicator's determination was upheld.

Insights

This decision has important practical implications for claimants under the SOP Act.

• First, a finding of no jurisdiction by an adjudicator will constitute a valid 'determination', which will ultimately prevent a claimant from obtaining payment under the SOP Act.
• Second, if a claimant receives an adverse finding on jurisdiction, the appropriate course is to seek to have that jurisdictional finding dealt with by the court. Attempting to re-submit the same issue to a second adjudicator and then seeking to enforce the second adjudicator's more favourable decision risks a finding of abuse of process and the prospect of adverse injunctive relief.