20 In relation to item 16 it put:
"88. Walter Mining refer the Adjudicator to paragraph 13.9 of the Statutory Declaration of Andrew David Stuckey (Exhibit 2) and submit that additional shotcrete spraying if carried out by Walter Mining, would have been work carried out under the Contract at Contract rates, the cost of which would have been born by Robson Civil."
21 In the adjudication response the plaintiff responded with respect to the backcharges issue, relevantly, as follows:
"57. The Claimant in its application (for example at paragraph 69.2) actually asserts that many of the deductions made by Robson Civil for (in many cases acknowledged) defective work, cannot be validly deducted on the grounds that:
"the Adjudicator cannot make an assessment of the value of a backcharge where the value claimed by Robson Civil is an 'estimate only' and evidence of costs have (sic) actually been incurred has not been included in its Payment Schedule."
58. This submission is of course completely baseless and is indeed contrary to the very wording in the Act.
59. Section 10(1)(b)(iv) of the Act actually uses the word "estimate":
"if any of the work is defective, the estimated cost of rectifying the defect (sic).
60. This section of the Act makes it abundantly clear that the Respondent is only required to provide an estimate of the cost - it would be a ridiculous (sic) if a Respondent was precluded from withholding monies until extensive remedial works were completed because it could not provide the actual costs of the rectifying (sic) the defective work (as is the case here).
61. Secondly, even in circumstances where the remedial and rectification works had been completed (which in some cases in this matter - they have not), the Respondent is required to provide only reasons for withholding payment - the Respondent is not required to provide a full breakdown of evidence and costs with its payment claim. Substantiation is only required in any adjudication response."
22 In the adjudication response the plaintiff responded with respect to the retention issue as follows:
"67. It appears from a review of the adjudication application, that notwithstanding that the deduction for retention is raised squarely in the payment schedule, the Claimant had made no submission on this matter at all.
68. The adjudicator referred to subcontract agreement between the parties ( Exhibit 5 to the application ) and in particular to:
(a) The Schedule on page 1; and
(b) Clause 7
69. The adjudicator will note that, the parties have agreed that the Claimant will provide security for performance of its obligations under the contract in the amount of " 5% of the Subcontract Sum as varied in accordance with this Agreement ".
70. Based on the assessment by Robson Civil that the value of the work completed by the Claimant to the date of the payment claim was $3,487,377.29 (excl GST), Robson Civil has properly retained 5% of this amount to the total value of $174,368.86 as security for the obligations of the Claimant under the contract.
71. Given:
(a) the express contractual term providing an entitlement to deduct security in the amount of 5% of the adjusted Subcontract Sum;
(b) the failure of the Claimant to even address this deduction in its application;
Robson Civil submits that the adjudicator should be quite satisfied that this is:
A valid deduction from the claimed amount.
72. In the alternative to the valuation of the retention provided, and to the extent that the adjusted contract value is greater than the $3,487,377.29 assessed by Robson Civil, having regard to the contract terms (as the adjudicator is required to do pursuant to section 22(2)(b) of the Act), the adjudicator should determine 5% of any such larger amount as the amount to be properly deducted."
23 For present purposes it is not necessary to set out in full how the adjudicator dealt with each of the backcharge items. It is sufficient for present purposes to set out part of the determination with respect to pile repairs because the adjudicator dealt similarly with each of the other items the relevant respect. The adjudicator determined as follows:
"I am satisfied that clause 21 of the construction contract gives the Respondent a right of set off. Clause 21(iv) of the construction contract provides that the Respondent may set off any amount by which the value of the works is diminished as a result of the Claimant's failure to comply with the construction contract, and if the amount cannot be agreed upon by the parties, then the matter is to be referred to an independent quantity surveyor or the institute of arbitrators & mediators.
Since the respondent asserts that the works have been diminished at the fault of the claimant, and disputes that the claimant performed the excavation work with due care and diligence, and the amount of set off has not been agreed upon by both parties, it seems to me that it would be inappropriate for me to determine the amount of set off in a situation whereby the parties have expressly agreed that a matter such as this is to be referred to an independent quantity surveyor or the Institute of Arbitrators & Mediators. Consequently, I shall make no allowance for the amount of set off claimed in respect of pile repairs in my determination."
24 With respect to retention, the adjudicator determined as follows:
"The construction contract states (at p.1 of 5 of the construction contract): "Security: 5% of the Subcontract Sum as varied in accordance with this Agreement."
The Respondent seeks to deduct $174,368.86 (excl GST) from the Claimant's payment claim on account of retention. The Respondent arrived at this value of retention based on the Respondent's assessment of Tax Invoices V3002-001 to V3002-19. I am satisfied that the respondent's method of valuation of the retention money accords with the construction contract.
However, for the reason I have given earlier in my determination, I have restricted my valuation of the payment claim to the amounts claimed in respect of Invoices Nos. V3002-14, V3002-17, V3002-18 and V3002-19 only (in addition to the alleged backcharges claimed by the Respondent).
Accordingly, for the reasons set out in Table 12 below, I determine that the amount to be withheld by the Respondent on account of retention is $31,124.18 (excl. GST)."
25 It is not necessary to set out the table. The exercise which the adjudicator carried out was to reach a total of $622,483.53 in respect of the four invoices he was assessing, which was reached by deducting various credits and then applying a five percent figure to that, amounting to the figure stated of $31,124.18.
THE PARTIES' SUBMISSIONS