10    Valuation of construction work and related goods and services

(1)   Construction work carried out or undertaken to be carried out under a construction contract is to be valued:

(a)    in accordance with the terms of the contract, or

(b)   if the contract makes no express provision with respect to the matter, having regard to:

(i)            the contract price for the work, and

(ii)          any other rates or prices set out in the contract, and

(iii)         any variation agreed to by the parties to the contract by which the contract price, or any other rate or price set out in the contract, is to be adjusted by a specific amount, and

(iv)        if any of the work is defective, the estimated cost of rectifying the defect.

(2)   Related goods and services supplied or undertaken to be supplied under a construction contract are to be valued:

(a)    in accordance with the terms of the contract, or

(b)   if the contract makes no express provision with respect to the matter, having regard to:

(i)            the contract price for the goods and services, and

(ii)          any other rates or prices set out in the contract, and

(iii)         any variation agreed to by the parties to the contract by which the contract price, or any other rate or price set out in the contract, is to be adjusted by a specific amount, and

(iv)        if any of the goods are defective, the estimated cost of rectifying the defect,

and, in the case of materials and components that are to form part of any building, structure or work arising from construction work, on the basis that the only materials and components to be included in the valuation are those that have become (or, on payment, will become) the property of the party for whom construction work is being carried out.

Plaza West Pty Ltd v Simon's Earthworks (NSW) Pty Ltd & Anor [2008] NSWCA 279
In this case, amongst other things, Hodgson J held that:

1. the phrase “calculated in accordance with the terms of the contact” in s 9(a) of the Building and Construction Industry Security of Payment Act 1999 does not engage contract mechanisms determining what is due under the contract, independently of calculations referable to the work performed;
2. Contractors are not deprived of entitlement to payment under the Act because a condition precedent such as obtaining of a superintendent’s certificate, has not been satisfied; and contractors are not ipso facto entitled to payment because of the operation of a deeming provision
3. See also Transgrid v Siemens Limited [2004] NSWCA 395 and John Holland Pty Limited v Road and Traffic Authority of New South Wales [2007] NSWCA 19

Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor [2004] NSWCA 394
Hodgson J said adjudicator under s 10(1)(b) cannot have regard to a cross-claim for damages for delay but can consider a cross-claim relating to defective or incomplete work.

Minister for Commerce v Contrax Plumbing and Ors [2004] NSWSC 823: McDougall J
Hodgson JA comments that although the Act refers to the contract, a contract provision that purports to cap the maximum value of the contract in order to deny a Claimant the right to value work may be in breach of section 34

Transgrid v Walter Construction Group [2004] NSWSC 21 (6 February 2004) : McDougall J
KEY ISSUES: whether jurisdiction to review an adjudicator’s determination – whether there was jurisdictional error of law – whether Superintendent’s certification binding on adjudicator – whether there was denial of natural justice

Quasar Constructions v A J Stockman Pty Ltd [2004] NSWSC 117 (4 March 2004) : Barrett J
KEY ISSUES: whether there was jurisdictional error of law when adjudicator did not have regard to contract price in assessing value of work – whether adjudicator failed to make in accordance with s10(1)(b) any determination of the value of the work