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[2026] NSWSC 938
Supreme Court of NSW
2026-08-06
Hmelnitsky J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Abax Contracting Pty Ltd v SD Civil Engineering Pty Ltd [2026] NSWSC 938
Hearing dates: 29 July 2026
Date of orders: 06 August 2026
Decision date: 06 August 2026
Jurisdiction: Equity - Technology and Construction List
Before: Hmelnitsky J
Decision: (1) Summons dismissed.
(2) The plaintiff is to pay the first defendant’s costs as agreed or assessed.
(3) Direct the parties to bring in short minutes of order by 4:00PM on 13 August 2026 dealing with the funds paid into Court pursuant to the order made on 18 June 2026.
Catchwords: BUILDING AND CONSTRUCTION — Adjudication determination under s 22 of the Building and Construction Industry Security of Payment Act 1999 (NSW) — Judicial review — Whether determination void for jurisdictional error — Whether plaintiff was denied procedural fairness — Where first defendant advanced waiver and estoppel argument before adjudicator — Where first defendant annexed a bundle of 49 email chains to its adjudication application in support of waiver and estoppel argument — Where adjudicator drew support from a particular email in the bundle in reaching his conclusion that waiver and estoppel was established — Whether determination was made on a basis not advanced by first defendant and not answered by plaintiff
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 17(1)(a)(i), 20, 22, 34
Cases Cited: Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394
Demex Pty Ltd v McNab Building Services Pty Ltd (2023) 113 NSWLR 282; [2023] NSWCA 261
Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151
Category: Principal judgment
Parties: Abax Contracting Pty Ltd (Plaintiff)
SD Civil Engineering Pty Ltd (First Defendant)
Christopher Harris (Second Defendant)
Representation: Counsel:
D Weinberger SC (Plaintiff)
D Byrne (First Defendant)
Solicitors:
BCP Lawyers & Consultants (Plaintiff)
McCullough Robertson (First Defendant)
File Number(s): 2026/252660
Publication restriction: Nil
This is an application for an order quashing an adjudication determination made by the second defendant, Mr Christopher Harris (the Adjudicator), in favour of the first defendant, SD Civil Engineering Pty Ltd (SD Civil), on 8 June 2026 (the Determination), or alternatively an order declaring the Determination to be void and of no effect.
The plaintiff, Abax Contracting Pty Ltd (Abax), is the developer of a building project in Rouse Hill known as ‘The Hills Hub’ (the Project). Artazan Property Group (NSW) Pty Ltd (APG) was engaged by Abax as superintendent on the Project.
SD Civil is a builder. It was engaged by Abax pursuant to a Letter of Intent dated 2 February 2026 to carry out certain pre-construction works for the Project while the parties negotiated a proposed design and construct contract (D&C Contract). It is not in dispute that the Letter of Intent is a construction contract for the purposes of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act).
The main issue before the Adjudicator was whether SD Civil complied with certain terms of the Letter of Intent entitling it to be paid for certain pre-construction works. One of SD Civil’s arguments was that Abax had either waived strict compliance with those terms or alternatively that Abax was estopped from insisting on its strict contractual rights in relation to those terms. The Adjudicator accepted this argument. The main issue in dispute in the present application is whether the Adjudicator afforded Abax procedural fairness in reaching that conclusion. Abax’s case is that the Adjudicator placed critical reliance on certain correspondence in a way that had not been foreshadowed in SD Civil’s application for adjudication and that, as such, it was denied a fair opportunity to respond to what turned out to be (in the Adjudicator’s view) a key piece of evidence supporting SD Civil’s argument.
“SD Group may only carry out Pre-Construction Works where the scope and estimated cost of the relevant activity has been submitted to APG (and who will be the Superintendent under the Contract) and approved in writing by APG prior to the cost being incurred. SD Group has no entitlement to payment for any Pre-Construction Works or costs incurred without that prior written approval. All claims must be supported by appropriate invoices and records and are subject to certification by APG. Pre-Construction claims for consultants will include consultant invoice plus 5% plus agreed monthly preliminaries (based on hours).”
APG was the superintendent under the Letter of Intent. There is no dispute that, as the Adjudicator found, APG acted for and on behalf of Abax in relation to the Letter of Intent: see paragraph [28] below.
Clause 2 defined ‘Pre-Construction Works’ as including the following activities:
“i. Detailed Design development through to IFC including lodgement and obtainment of CC1
ii. Quotes and submissions for Consultant and Sub-Contractor engagement
iii. Engage with consultants and prepare engagement with subcontractors (formal engagement post contract agreement)
iv. Confirm programme for duration of project
v. Lodgement of authority applications for essential services
vi. Resolve all design related RFIs
vii. Develop project resourcing, reporting lines, project management plan and processes of reporting on the project status
viii. Execute the Contract
ix. Site inspections and investigation works.”
“(c) … SD Group acknowledges that any cost or commitment incurred without prior written approval of APG is incurred at SD Group’s risk and will not be reimbursable;
(d) If the arrangement created under this LOI [Letter of Intent] or this LOI is terminated, then:
(i) Abax will only be liable to SD Group for the part of the Authorised Amount payable for the works properly performed by SD Group, as assessed and determined by APG, subject always to any such amount (in aggregate) being limited to, and not exceeding, the Authorised Amount; …”
On 1 May 2026, SD Civil served Abax with a payment claim dated 30 April 2026 for the sum of $148,925.70 (including GST) for design coordination work said to have been performed by four members of SD Civil’s staff in March and April 2026 (Payment Claim).
On 4 May, Abax terminated the Letter of Intent.
On 8 May, APG sent a letter to SD Civil attaching a payment schedule for an amount of $0 (Payment Schedule). The letter identified two reasons for withholding payment, which may be summarised as follows:
That SD Civil had not complied with cl 1 of the Letter of Intent because it ‘did not submit any estimated cost to APG and no written approval was received from APG prior to cost being incurred’.
That following termination of the Letter of Intent, Abax was only liable for ‘the part of the Authorised Amount payable for the works properly performed’ by SD Civil, referring to cll (c) and (d)(i) of the Letter of Intent.
On 22 May 2026, SD Civil lodged an application for adjudication pursuant to s 17(1)(a)(i) of the Act in which it responded to the reasons given by Abax for withholding payment (the Adjudication Application). In relation to the first reason, SD Civil said that any approval requirements had been satisfied by the parties’ conduct. It contended that Abax had either waived the requirement for prior written approval or that Abax was estopped from relying on the requirements in the Letter of Intent.
SD Civil relied on a series of 49 email chains. These were arranged chronologically in Annexure A to the Adjudication Application. It is necessary to set out SD Civil’s contentions concerning these emails in some detail. At paragraphs 23 to 25 of its written submissions, SD Civil said:
“23. Contrary to the position set out in the Payment Schedule, the Claimant [SD Civil] has complied with the requirements of the Letter of Intent. That is, the Superintendent provided approval throughout the Project of the work the Claimant was performing.
- Set out in Annexure A to this letter is a chronology of 49 email chains exchanged between the Claimant and the Superintendent, or to which either or both of the Superintendent and a representative of the Respondent [Abax] were copied.
- These emails demonstrate that:
(a) the Claimant was in regular contact with each of the Respondent and the Superintendent explaining the work it was performing and that it intended to perform, and identifying risks along the way. This included a weekly meeting between the parties;
(b) the Respondent and the Superintendent engaged in this correspondence providing confirmation of various information and requirements for the Project, as well as acknowledging the progress of, and approving the performance of, the Claimant’s work;
(c) either or both of the Superintendent and a representative of the Respondent were copied into correspondence between the Claimant and prospective consultants, as the Claimant carried out its work under the Letter of Intent;
(d) the Superintendent variously provided instructions to complete work and the Claimant complied with those instructions. As part of the Superintendent’s approval of the Claimant performing that work, he did not require the Claimant’s scope and costing to be approved before commencing that work; and
(e) the Claimant otherwise continued performing the work required of it by the Letter of Intent, with the knowledge and approval of each of the Respondent and the Superintendent.”
“32. It is clear from each of the Superintendent’s and the Respondent’s conduct – as set out in the chronology contained at Annexure A – that each of them made an election not to rely on any requirement for the Claimant to expressly submit and have approved in writing its scope of work and costing, prior to performing the Pre-Construction Works.
- Rather, as is explained by Mr Pescara, the Superintendent and the Respondent were at all relevant times aware of precisely the work the Claimant was carrying out, and what work it forecasted carrying out. It also actively engaged in the progression of that work and provided its approval in relation to that work.
- Indeed, throughout the Project the Superintendent instructed the Claimant to carry out particular work or perform specific services, which the Claimant did. The parties also frequently participated in meetings which discussed the status of the works and what the Claimant forecasted was left to perform.
- Yet, prior to the service of the Payment Claim, neither the Superintendent nor the Respondent:
(a) requested that the Claimant seek any more formal approval before performing the work;
(b) told the Claimant that, despite the correspondence and engagement about the work, the Claimant was not going to be paid for the work without taking some other step; or
(c) objected to the Claimant performing the work without further steps being taken.”
“30. Contained at Tab-5 is a bundle of emails dated between 13 January 2026 and 29 April 2026. The emails in the bundle consist of:
(a) emails between Mr Darcy [Managing Director of SD Civil], me, the Superintendent and other APG personnel providing progress updates on the Project and the work being performed by SD [Civil];
(b) engagement between Mr Darcy, me, the Superintendent and other APG personnel as to next steps on the Project, including allocation of responsibility and respective parties identifying and providing the information they were required to provide for the Project;
(c) meeting invitations and agendas where SD [Civil] personnel met with the Superintendent and, at times, Tom Baxter of Abax, to discuss progress and next steps. This included a weekly meeting between these parties;
(d) email correspondence between, and meetings with, prospective consultants to negotiate scopes of work and pricing for those consultants to be considered for the Project. The Superintendent was usually copied to these emails and attended such meetings; and
(e) the provision by the Superintendent of instructions to perform various works.
- The bundle of emails demonstrates that SD [Civil]:
(a) has performed a significant volume of the Pre-Construction Works;
(b) none of the Superintendent, other representatives of APG or Abax required SD [Civil] to submit its scope or pricing, or otherwise instructed SD [Civil] not to continue with its work prior to such scope and pricing being approved; and
(c) both APG and Abax personnel were constantly informed about the work being performed by SD [Civil] and its forecast work, and engaging with SD [Civil] personnel about this, by reason of the email correspondence between the parties and the regular Project status meetings.
- Because neither the Superintendent nor Abax required such approval to be obtained before commencing work, I did not submit scope or pricing information for approval. I also understood that nothing further was required of SD [Civil] in order for it to be paid for the work it performed, and Abax would pay the sum claimed.”
“We are working on design review, consultant engagement, CC1 required docs, tendering, D&C contract, methodology and program. Which means that we are allocating significant amount of time and resources to this project. We are preparing our first February claim which will be submitted next Friday for your review and approval.”
“Claimant responding in relation to the draft building contract and providing an update on the status of the Claimant’s performance of the works and following up on responses required from the Superintendent.”
SD Civil also pointed to an alleged verbal approval of an earlier payment claim issued on 27 March 2026 (described as ‘Claim 1’). In his statutory declaration Mr Pescara stated that neither APG nor Abax issued a payment schedule in response to Claim 1. Mr Pescara apparently followed up with each of APG and Abax at least three times and was ‘informed verbally on several occasions that the claim was approved’. SD Civil did not receive a written response to Claim 1 until 8 May 2026 and payment of that claim is still outstanding. Nevertheless, Mr Pescara said that the verbal approval gave him confidence that neither APG nor Abax took issue with the process by which SD Civil was performing the Pre-Construction Works and claiming payment, and that no further steps needed to be taken by SD Civil in order to be paid for the work it performed. SD Civil said that it continued performing the Pre-Construction Works and submitted the Payment Claim in reliance upon Abax’s (and APG’s) waiver of any strict requirement for prior written approval of the scope and cost of the works.
SD Civil also submitted that if the requirement for written approval operated to disentitle it from being paid for the work it performed, the requirement would be void under s 34 of the Act for having the effect of excluding, modifying or restricting its right to a progress payment under the Act.
In relation to Abax’s second reason for withholding payment – that termination of the Letter of Intent affected SD Civil’s entitlement to Payment – SD Civil submitted that cl (d)(i) was not relevant in circumstances where the Letter of Intent was terminated three days after the Payment Claim was issued on 1 May 2026. SD Civil said that its entitlement to a progress payment must be assessed as at the date the Payment Claim was issued.
On 28 May 2026, Abax lodged a response to the Adjudication Application pursuant to s 20 of the Act (the Adjudication Response). In relation to SD Civil’s allegation that there had been a verbal approval of Claim 1, Abax said that the Adjudication Application did not identify any communication by which Abax evinced an intention to abandon cl 1 of the Letter of Intent. That is, Abax’s Adjudication Response focused on whether there was any correspondence positively communicating an election. It contended that the majority of the work the subject of the Payment Claim was performed in March 2026, before any alleged verbal approval of Claim 1. In its submission, this meant that any verbal approval given after 27 March could not possibly have induced SD Civil to incur costs prior to that date.
Abax made lengthy submissions in response to SD Civil’s arguments about waiver and estoppel. So far as waiver was concerned, its submissions included the following:
“The Claimant’s waiver argument fails because the Respondent (or APG) never communicated, unequivocally or at all, that it was abandoning clause 1 of the LOI. The Claimant identifies no such communication. At paragraph 32 of the Application, it asserts only that ‘it is clear from each of the Superintendent’s and Respondent’s conduct – as set out in the chronology contained at Annexure A – that each of them made an election not to rely on any requirement’. The chronology contains no such election, and it is not clear at all that such an election was made.”
“65. Each element of estoppel by conduct is absent.
- First**, no clear and unequivocal representation**. The Claimant’s alleged ‘representation’ consists of: (a) general engagement by APG in project correspondence; and (b) verbal statements alleged to have been made on ‘several occasions’ that Claim 1 ‘was approved’ (Pescara Statutory Declaration paragraph 34).
- The first is not a representation about clause 1 at all. The second is bare assertion.
- Mr Pescara identifies no specific occasion, no specific speaker, no specific words. In any event the assertion is irreconcilable with the documents. On 4 March 2026, Mr Pescara’s own meeting agenda recorded Claim 1 as ‘to be reviewed by APG’. On 2 April 2026, Mr Pescara’s own agenda recorded ‘SD Feb claim to be reviewed and approved’ as an outstanding item. On 10 April 2026, Mr Pescara wrote to Mr Felli asking ‘Do you have an update regarding approval of SDG’s claim 1?’ If Mr Pescara had been told Claim 1 was approved, he would not still have been chasing approval of it on 10 April 2026. It is clear this claim was not approved, which is why there is a dispute.” (footnotes omitted)
| | Claimant’s contention (summary) | Respondent’s answer | | 24 | Annexure A is a chronology of 49 email chains demonstrating compliance. | The Respondent does not accept that the chronology demonstrates compliance with clause 1 of the LOI. The chronology shows engagement on Project matters but contains no submission of scope and estimated cost for the personnel time the subject of the Payment Claim, and no written approval of any such scope and cost. The chronology in fact shows the Claimant followed clause 1 for consultants … and did not extend that process to its own personnel time. … |
| | Claimant’s contention (summary) | Respondent’s answer | | 32 | It is clear from the chronology that the Respondent and Superintendent elected not to rely on the requirement for scope and costing approval. | Denied. The chronology shows the opposite — the Respondent and Superintendent insisted on clause 1 compliance for consultants and never communicated, in writing or otherwise, that clause 1 was being waived in respect of the Claimant’s personnel time. The Claimant has not identified any specific communication amounting to election. … | | 35 | Prior to service of the Payment Claim, neither the Superintendent nor the Respondent: (a) requested more formal approval; (b) told the Claimant it would not be paid; or (c) objected to the work. | Silence and inaction do not constitute waiver. Waiver requires positive conduct that is unequivocally inconsistent with the right asserted. The Respondent’s position is reinforced by the fact that, throughout the period of alleged ‘inaction’, the Respondent and Superintendent were administering clause 1 in respect of consultants … and on 25 March 2026 expressly required cost reconciliation … |
On 8 June 2026, the Adjudicator made his Determination under s 22 of the Act. The Adjudicator upheld SD Civil’s claim on the basis that Abax had waived the requirement for prior written approval in the Letter of Intent and that Abax was estopped from relying on that requirement.
Among other preliminary findings and observations, the Adjudicator said the following about the role of APG at paragraph 12 of the Determination:
“The LOI identifies that third party [APG] as having a role under the LOI which appears to be the equivalent of a Superintendent under a standard form Australian Standard construction contract. For the sake of convenience, clarity, and consistency with the submissions, that third party will henceforth be referred to as the Superintendent, acting for and on behalf of the Respondent [Abax].” (emphasis added)
The Adjudicator made relatively detailed reference to the correspondence that had been placed before him. In paragraphs 16 to 33 of the Determination, the Adjudicator referred to numerous of the Annexure A emails in considering the question of how, precisely, the Letter of Intent applied to SD Civil. He did not reach a firm conclusion as to that matter, although he did observe that some of Abax’s correspondence ‘represented a significant departure from the intent of the Letter of Intent’. At one point, he observed that in one email sent by the superintendent (APG) to SD Civil, Abax was ‘not insisting on clause 1 compliance’.
The Adjudicator’s decision ultimately rested on his conclusions concerning the estoppel and waiver arguments. After referring to the 20 February email he said:
“35. The email was sent to the Superintendent and a Respondent representative before any of the works under the Payment Claim commenced, and it goes directly to the issue of waiver and/or estoppel. As noted above, it was in this email that the Claimant advised it could not engage the consultants until the D&C contract was finalised, because the draft contract contained additional terms that had not been allowed for and the Claimant had concerns about proposed risks and rewards in the draft D&C contract.
- On the basis of this email, the Respondent knew very well from before any claims were submitted that the Claimant was of the view that it was not required to submit its scope and estimated costs for pre-approval before it had a right to claim for the actual costs incurred, and the Respondent knew this at a time when it had become apparent that the LOI could not work in its original intended form with the Claimant directly engaging consultants if the Respondent insisted on the D&C terms as drafted. But instead of addressing that view, the Respondent remained silent about relying on clause 1 for nearly three months, while the Claimant incurred further costs. The Respondent’s submissions that it did not know that the Claimant expected to be paid without prior approval are rejected.”
“I therefore do not accept the Respondent’s submission that it is an essential element of either waiver or estoppel that conduct must be ‘clear and unequivocal’, or that ‘conduct that is also explicable on some other footing will not suffice’. To the contrary, as noted by Brennan J in Walton[s] Stores v Maher above in the very paragraph the Respondent relied upon, it is the Respondent’s awareness of the Claimant’s assumption that it will be paid, as communicated by the Claimant on 20 February 2026 and which the Respondent failed to correct, that establishes the inducement.”
“I therefore reject the Respondent’s submission that four essential elements of estoppel are absent. Regarding each of the Respondent’s four arguments:
a) a clear and unequivocal representation is not a required element of estoppel, and it is the Respondent’s silence after being made aware that the Claimant was of the view that it would have an entitlement to payment that establishes the inducement of a belief that the payment will be made (subject to an assessment of the actual claim);
b) the performance of the LOI scope explicitly does not ensure a D&C contract will be executed, and in circumstances where the Claimant has expressly stated that it will submit a claim for its staff costs it is unsustainable to assert that the Claimant was not intending to claim its costs;
c) there is no timing problem because the Claimant’s case turns on the email of 20 February 2026, before any of the works under the Payment Claim were undertaken; and
d) the Respondent’s actions are unconscionable because the Respondent knew the Claimant’s interpretation of their legal relationship was that it would be paid for the hours it was expending, even when the process of the LOI for the Claimant to engage consultants could not be followed due to the clauses the Respondent had drafted, and the Respondent made no attempt to give a different view, even avoiding formal assessment of claims and giving verbal approval of the first claim [Claim 1].”
“I therefore accept the Claimant’s submission that the Superintendent’s conduct as set out in its chronology (and the evidence referenced in that chronology) establishes that the Superintendent and the Respondent made an election not to rely on any requirement to submit and have approved in writing its scope and costing prior to performing works, that the Claimant relied on the conduct (by silence) of the Superintendent and the Respondent such that the Respondent is now estopped from relying on a strict requirement (to the extent that one might exist in the changed circumstances) for approval before commencing because it would be unconscionable for the Respondent to do so.”
On 18 June 2026, Abax approached the Court seeking interlocutory relief in the form of an order restraining SD Civil from taking steps to enforce the Determination or any judgment obtained as a result of filing a certificate under s 25 of the Act in relation to the Determination until further order. Peden J granted Abax leave to file in Court a summons dated 18 June 2026 and made orders abridging time for service. Her Honour granted the interlocutory relief sought in the summons on terms requiring Abax to pay the sum of $164,563.28 into Court.
The summons seeks final relief in the form of an order quashing the Determination or, alternatively, an order declaring the Determination to be void and of no effect.
Abax seeks relief on the ground that it was denied procedural fairness. It says that the Adjudicator decided the case on a basis that SD Civil did not advance and Abax therefore did not answer; namely, that the 20 February email communicated to Abax an assumption that SD Civil could recover its own time-costs without prior approval and that Abax’s silence in response induced SD Civil to continue performing work. Abax says that it was denied an opportunity to make submissions about the 20 February email. It says that SD Civil had not relied on it in the way the Adjudicator relied on it and that it could not reasonably have known that the Adjudicator might uphold the arguments about waiver and estoppel by reference solely to that email.
Abax submits:
“SD Civil did not submit that the 20 February Email was sent to Abax. It did not submit that it communicated to Abax an assumption that SD Civil was not required to submit its scope and estimate costs for pre-approval. It did not submit that Abax’s silence after this email was the inducing conduct. It did not submit that its case ‘turned on’ the 20 February Email rather than the alleged verbal approval of Claim 1.”
There was no dispute that the Adjudicator was required to afford procedural fairness in the making of the Determination: Brodyn Pty Ltd (t/as Time Cost and Quality) v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 at [55]-[57] (Hodgson JA, Mason P and Giles JA agreeing); Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151 at [99] (McColl JA, Beazley ACJ and Macfarlan JA agreeing).
In the context of the Act, that obligation is somewhat attenuated by matters such as s 21(2), which limits the material that an adjudicator may consider, the strictly limited timelines in which the Adjudicator is required to make a determination and the interim nature of the determination: Demex Pty Ltd v McNab Building Services Pty Ltd (2023) 113 NSWLR 282; [2023] NSWCA 261 at [30] (Kirk JA, Mitchelmore and Adamson JJA agreeing). At [32], Kirk JA said:
“Consistently with the effect of what was said in Brodyn, and with the arguments put by the appellant in this case, it should be understood that only if there has been a substantial denial of procedural fairness by an adjudicator in determining an adjudication application will there be jurisdictional error under the Act. Put another way, the content of the requisite procedural fairness is reduced …. What this means in practice will turn on the particular circumstances of cases. But generally a conclusion of invalidity would only be reached if there was a significant departure from what would ordinarily be the requirements of procedural fairness for a person exercising a statutory power, and where that departure could be characterised as leading to substantial practical injustice in all the circumstances. This approach reflects the fact that the Act provides for a ‘rough and ready’ process …, not intended readily to be held invalid on judicial review.”
“… Even so, consistently with [the] approach just stated, a reviewing court should view sceptically arguments involving high degrees of specificity in this regard.”
In this case, I do not consider that there was a failure, much less a substantial failure, to afford procedural fairness to Abax.
The use which the Adjudicator made of the 20 February email was consistent with the way SD Civil advanced its case. SD Civil relied on the entire bundle of emails, including the 20 February email, in support of its argument that Abax had either waived strict compliance with clause 1 of the Letter of Intent or that Abax was otherwise estopped from relying on clause 1 to deny payment. It specifically contended that APG and Abax were aware from those emails of ‘precisely the work [SD Civil] was carrying out, and what work it forecasted carrying out’. In that respect, the Adjudication Application made specific reference to the statutory declaration of Mr Pescara who said of these same emails that (among other things) they demonstrated how neither APG nor Abax required SD Civil to comply with clause 1 of the Letter of Intent despite being ‘constantly informed about the work being performed by [SD Civil] and its forecast work’.
These contentions in the context of an estoppel argument leave no real room for doubt that SD Civil relied on the whole of the email correspondence to establish that (a) APG and Abax knew what work SD Civil planned to do, (b) SD Civil expected it would be paid for that work despite there having been no strict compliance with the Letter of Intent and (c) armed with this knowledge, neither APG nor Abax responded to insist on strict compliance with the Letter of Intent. The 20 February email had obvious relevance to the first part of that argument. In terms, it informed APG that SD Civil was doing work in circumstances where there had been no prior written approval and that it intended to issue an invoice for it.
Abax dealt with the bundle of emails in its Adjudication Response, both collectively and, in many instances, individually. In paragraph 66 of its response (see paragraph [23] above) Abax asserted that SD Civil’s estoppel case relied on a ‘representation’ that was nothing more than a ‘general engagement by APG in project correspondence’. The ‘correspondence’ to which it was referring was the bundle of emails. The suggestion that the emails were nothing more than ‘general engagement by APG in project correspondence’ reflected its own understandably tendentious characterisation of the emails (see paragraph [24] above). It was, however, clear that SD Civil relied on the emails as showing more than just ‘general engagement’ about the Project. It relied on them in its own understandably tendentious way to show that each of the elements of waiver and estoppel were made out. It is a fair criticism of SD Civil’s Adjudication Application to say that it did not spell those elements out in granular detail, but the overall picture it sought to paint was very clear.
At the same time, Abax picked out various of the emails to show that the waiver and estoppel case could not succeed. For example, it relied on specific emails to show that SD Civil continued to treat the requirements of the Letter of Intent as being binding.
Abax’s main complaint is that it was not given an opportunity to respond to the suggestion that the 20 February email alone gave rise to an estoppel. The emphasis here is on the word ‘alone’, because it of course knew that SD Civil relied on the bundle of which the 20 February email formed part for exactly that purpose.
However, I do not accept that the estoppel identified by the Adjudicator depended solely on the 20 February email. It is true that the 20 February email was the email which the Adjudicator thought made clear to APG and Abax (presumably relying on agency principles insofar as Abax was concerned, as to which see his finding at paragraph 12 of the Determination: paragraph [28] above) that SD Civil intended to do and charge for work even though no prior written approval had been obtained. But he necessarily also relied on the balance of the correspondence to show that, having been apprised of this fact, APG (and, through it, Abax) was content to allow SD Civil to proceed. It was undoubtedly for this reason that the Adjudicator said at paragraph 48 of the Determination that APG’s ‘conduct as set out in [SD Civil’s] chronology (and the evidence referred to in that chronology)’ established waiver and estoppel. In relying on the whole course of correspondence in this way, the Adjudicator was doing exactly what he had been invited to do by SD Civil: to find that the course of correspondence as a whole established that the elements of waiver and estoppel were made out.
In my view, there was no denial of procedural fairness in the Adjudicator relying on the 20 February email in this way.
SD Civil submitted that the Adjudicator in any event rested his decision on an alternative basis, namely that there had been a verbal approval by Abax of an earlier payment claim. This was referred to as ‘Claim 1’, which had been issued on 27 March 2026 and in respect of which SD Civil had also not obtained written approval in accordance with the Letter of Intent but as to which it claimed it had received verbal approval. Part of its waiver and estoppel case was that it had relied on this later verbal approval in incurring the costs that were the subject of the Payment Claim now in dispute.
An obvious difficulty with this argument was that it gave rise to a timing problem. The claimed verbal approval could only have been given well after the costs which were the subject of the disputed Payment Claim had already been incurred. It was this ‘timing problem’ to which the Adjudicator was referring in paragraph 46(c) of his Determination (paragraph [32] above), his point being that there was no timing problem once one appreciated that the estoppel had arisen earlier on the basis of the 20 February email.
The Adjudicator dealt with this aspect of SD Civil’s argument at paragraph 49 of the Determination, where he said:
“While it is strictly not necessary to reach a conclusion on the Claimant’s allegation of a verbal approval of Claim 1, I find the Respondent’s submissions on the Claimant’s seeking updates on Claim 1 disingenuous. It is normal that requests for payment require approval, and the LOI notes that all claims are subject to certification by the Superintendent. The Claim is recorded as submitted on 27 March 2026, and there are no payment terms in the LOI. The follow-up email on 10 April 2026 is only ten business days later, and no further follow-up requests were made. When the Payment Claim was served on 1 May 2026, the Claimant did not ask for an update for [C]laim 1 and instead gave a reminder that [C]laim 1 had not been paid. That evidence is consistent with the Claimant having been verbally advised shortly after 10 April 2026 that [C]laim 1 was approved and would be paid. On the basis of this contemporaneous evidence, I favour the Claimant’s submissions over the Respondent’s denials.”
The orders of the Court will be as follows:
Summons dismissed.
The plaintiff is to pay the first defendant’s costs as agreed or assessed.
Direct the parties to bring in short minutes of order by 4:00PM on 13 August 2026 dealing with the funds paid into Court pursuant to the order made on 18 June 2026.
**********
Abax Contracting Pty Ltd
SD Civil Engineering Pty Ltd
(2004) 61 NSWLR 421
(2023) 113 NSWLR 282
(2017) 95 NSWLR 82