Generally, adjudicators will be given considerable latitude as to the manner and form of their determination. The recent Supreme Court of Queensland case of JAG Projects Qld Pty Ltd v Total Cool Pty Ltd & Anor [2015] QSC 211 is an example of the application to the facts of well known principles of the Queensland security of payment regime. The facts of the case can be described in fairly short compass.

Total Cool Pty Ltd (First Respondent) was the beneficiary of an adjudication decision under the Building and Construction Industry Payments Act 2004 (Qld) ("the Act") requiring JAG Projects Pty Ltd (Applicant) to pay $88,000.00. The Applicant did not pay by the due date and the First Respondent issued a statutory demand under the Corporations Act 2001 (Cth), which also went unpaid.

The Applicant sought a declaration that the adjudication decision was void on the following grounds:

  • Two payment claims had been issued for the same work contrary to section 17(4) of the Act;
  • The adjudicator failed to give sufficient reasons; and
  • The adjudicator failed to properly consider the Applicant's submissions.

The Applicant further contended that the First Respondent was disentitled from using the security of payment regime as it was not licensed under the Building and Construction Commission Act 1991 (Qld) at the time of making its payment claim, although it was licensed when it entered into the contract and performed the work.

Decision

Bond J held that the payment claim was valid: there was only one payment claim for the work as the First Respondent proceeded under the invoice which was endorsed under the Act.

Although the First Respondent conceded that the adjudicator's reasons were "sparse" his honour held that as a whole, the adjudicator had demonstrated awareness of the disputes between the parties and had "considered the material" and expressed a conclusion in favour of the First Respondent. This was not a situation where there was "a mere indication by the adjudicator of having read the material and [expressing] a conclusion as to satisfaction". His honour also rejected the Applicant's contention that the First Respondent was disentitled from using the regime established by the Act as the First Respondent held the relevant licence at the time it undertook to carry out the work subject to the payment claim.

This case demonstrates that it is important to engage early with the core issues, which will ultimately prevent disputes from arising and it is therefore important to seek legal advice early rather than applying to the court for relief after an unsuccessful adjudication.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.