WA court ruling confirms restrictions around revealing adjudication evidence

The ruling confirms that things said and done during the adjudication process under the Building and Construction Industry (Security of Payment) Act 2021 (WA) – SOPA – are classed as inadmissible unless both parties consent to disclosure.

The decision confirms that section 55(4) of SOPA offers a powerful substantive protection of the adjudication system, and is a critical risk point for respondents considering post‑adjudication strategies.

How it happened

AARO Group Pty Ltd (AARO), a subcontractor, had previously obtained two adjudication determinations under SOPA requiring Monadelphous Engineering Associates Pty Ltd (Monadelphous) to pay approximately A$3.3 million (approx. US$2.38m), excluding GST. The determinations were filed as court judgments and AARO commenced enforcement in respect of one of the determinations, recovering A$2 million through a debt appropriation order.

Monadelphous then commenced separate Supreme Court proceedings alleging contractual breaches by AARO and claiming losses in the region of A$18 million. It then applied to suspend enforcement of the SOPA judgments under the Civil Judgments Enforcement Act 2004 (WA), arguing that “special circumstances” justified a stay.

Central to Monadelphous’ application was affidavit material seeking to explain:

• why it had not properly responded in the adjudications;
• the alleged non‑performance or defective performance by AARO; and
• why enforcement of the adjudicated sums would be unjust.

However, much of this evidence depended on the contents of documents that had been produced and relied on during the adjudication processes.

The challenge for Monadelphous was that s55(4) of SOPA renders such evidence inadmissible in any court or arbitration proceeding, unless the proceedings concern the validity of the adjudication or both parties consent to the evidence being used. In this case, neither exemption was applicable.

As a result, Monadelphous was not challenging the adjudicators’ jurisdiction or the validity of the determinations, but was instead attempting to re‑open the merits of the payment disputes. AARO did not consent to the use of adjudication material.

In reaching its conclusion, the Supreme Court relied on established authority. First, a 2012 Supreme Court case, Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd, in which it held that a similar provision under the former statutory regime provided that adjudication material may be admissible only where the legitimacy or validity of the adjudication is in issue; and secondly, a 2025 Supreme Court case, Grounded Construction Group Pty Ltd v KW Civil & Construction Pty Ltd, which confirmed that s (4) prevents parties from using court proceedings to re‑argue the merits of adjudicated payment disputes.

The court considered Monadelphous’ application to be analogous to the latter, noting that allowing reliance on adjudication material would cut across SOPA’s statutory architecture and undermine its cash‑flow purpose.

As a result, large portions of Monadelphous’ evidence were ruled inadmissible, with further parts excluded as hearsay or impermissible opinion. This meant the stay application lost its evidential basis and so could not succeed.

Once the adjudication evidence was stripped out, Monadelphous had a significantly narrowed evidentiary record, with a burden remaining on the company to establish “special circumstances”; and the court noting that the mere existence of substantial counterclaim or parallel litigation was not enough to constitute that.

Importantly, the court also reiterated that the relevant inquiry is whether there is a real risk the claimant would be unable to repay the adjudicated amount if later ordered to do so, not whether it could satisfy a much larger damages claim. On the admissible evidence, that threshold was not met.

This meant the application to suspend enforcement was dismissed, with the SOPA judgments remaining enforceable and the existing debt appropriation order standing. Monadelphous was ordered to pay AARO’s costs.

What this means for you

The decision confirms that, unless the validity of an adjudication determination is directly challenged, evidence of anything said or done during the adjudication process cannot be relied upon in subsequent court proceedings.

That restriction proved decisive, leaving the respondent unable to make out “special circumstances” to suspend enforcement of the SOPA determination. It suggests that courts will not easily find that there are special circumstances in which it will stay enforcement. 

The ruling confirms that s55(4) operates as a strict evidentiary barrier, meaning parties cannot use court or arbitration proceedings to ventilate what occurred during adjudications unless validity is in issue – and that any attempt to attempts to explain or excuse adjudication outcomes by reference to adjudication processes are likely to fail.

Those who now find themselves seeking to stay enforcement proceedings must do so with evidence that is entirely independent of the adjudication process.