In Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49,¹ the Court of Appeal overturned a Supreme Court ruling that found jurisdictional errors and overturned parts of two separate adjudication determinations.

While the Court agreed that the primary judge correctly stated the legal principles in finding jurisdictional error, it found the primary judge’s application to be controversial, especially where inferences were drawn about the adjudicator’s internal reasoning process.

In upholding the appeal, the Court reaffirmed SOPA’s ‘pay now, fight later’ approach, and noted that establishing jurisdictional error requires a significant breach of procedural fairness. The cross-appeal was dismissed.

Background

In March, we wrote an article on the Supreme Court’s first instance decision in Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49. To recap:

• two SOPA adjudications worth $81M were made by the sub-contractor Martinus against the head contractor Qube in relation to the Moorebank Intermodal Terminal Project;
• Qube challenged the two determinations citing jurisdictional error;
• the Supreme Court allowed Qube’s challenge and partially set aside the determinations.

Martinus appealed and Qube cross-appealed. The key issues were whether the adjudicator’s determination was affected by jurisdictional error, either because of the failure to consider submissions ‘duly made’, breach of procedural fairness, or legal unreasonableness.

Appeal

The Court of Appeal allowed all eleven grounds of Martinus’ appeal against the primary judge’s findings of jurisdictional error and dismissed Qube’s complaints of jurisdictional error raised in the cross-appeal.

The Court of Appeal consistently emphasised the overarching objectives of SOPA and the high threshold required to establish jurisdictional error. Their Honours held that most issues that had been identified by the primary judge as jurisdictional error were non-jurisdictional issues and within the adjudicator’s proper jurisdiction.

The Court of Appeal was critical of the primary judge for concluding the adjudicator failed to consider Qube’s submissions simply because they were not explicitly identified in the determination. Citing Ceerose,² their Honours stated it was ‘quite unrealistic’ to expect adjudicators to address every repetitive argument in detail, especially given SOPA’s time-sensitive nature. Further, while adjudicators must consider certain matters under s 22(2) of SOPA, a failure to mention a specific claim in their reasoning does not prove failure to consider, just as judicial opinions are not required to address every piece of evidence or submission.

The Court of Appeal determined that the adjudicator fulfilled its duty to properly consider the reasons outlined in Qube’s payment schedule. The adjudicator was not required to address additional reasons Qube only introduced in its response submissions.

The Court of Appeal found that even if the adjudicator had failed to grasp the subtlety of a submission made in Qube’s response regarding the Payment Schedule, it was an error within the adjudicators’ jurisdiction.

Key takeaways

This appeal judgment is a positive step for SOPA. It re-affirms the authority of adjudicators and the Courts’ reluctance to set aside determinations on the grounds of jurisdictional error.

* This article is the second instalment of a two-part series. The case is currently the subject of an urgent application seeking special leave to the High Court of Australia. At the time of writing, the outcome of the application has yet to be handed down.

This article was written by Lucas Keogh, Partner, Rhys Moran, Senior Associate, and Edward Wong, Associate.

¹ [2025] NSWCA 49.

² Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225.