In December 2013 the Queensland Court of Appeal
overturned two important, controversial BCIPA decisions of lower
The Queensland Court of Appeal's pre-Christmas reversal of
two primary judge decisions handed down in 2013 will provide
certainty on two fronts:
construction work on Queensland mining leases ARE subject to
the Building and Construction Industry Payments Act 2004 (Qld)
(BCIPA) (J&D Rigging Pty Ltd v Agripower
Australia Ltd  QCA 406); and
an adjudication determination found by a court to be affected
by jurisdictional error has no legal effect, so ALL amounts paid
pursuant to the void adjudication must be repaid - not simply that
part found to be in error (BM Alliance Coal Operations Pty Ltd v
BGC Contracting Pty Ltd  QCA 394).
Agripower – Construction work on mining leases is
subject to the Building and Construction Industry Payments
In Agripower the lower court found that the term
"land" in the section 10 definition of "construction
work" includes not just physical land, but also legal rights
to land. As mining leases did not give any legal rights to land (in
the property law sense) the lower court reasoned that work
performed on mining leases did not fall within BCIPA.
The Court of Appeal has now set aside that decision, finding
that the fact the land on which the work is to be performed is not
owned by the principal is irrelevant and that "Requirements of
the law of real property about ownership of things affixed to land
are not imported into section 10". Instead, whether a thing
forms part of land is answered by considering its physical
relationship with the relevant land, for example, is it fixed?
It is now clear that construction work performed on Queensland
mining leases can be covered by the operation of BCIPA. Mine owners
in particular should be alert to claims made under BCIPA, given the
serious consequences under the Act if such claims go
BM Alliance – There is no middle ground for an
adjudication affected by jurisdictional error
In BM Alliance the lower court found the adjudicator had made a
jurisdictional error in allowing a claim for termination costs
($4.35 million), out of a total adjudication award of approximately
$26 million, which was paid by BM Alliance to BCG with other
BM Alliance sought an order that the adjudication be declared
void, with an order that the $26 million plus interest be paid
back. The primary judge ordered that only the sum infected with
jurisdictional error ($4.35 million) be returned, not the whole
amount. This was done to "correct the error which resulted in
the determination of an amount in excess of jurisdiction and to
achieve a just result".
The outcome in the lower court meant that if jurisdictional
error by an adjudicator was found, the party would also have to
show the error affected the whole decision, if it were to avoid the
judge finding a more convenient or just remedy, which might include
part repayment only.
Following the Court of Appeal's decision on 20 December
2013, it is now clear that where a court finds jurisdictional error
in an administrative decision, such as determinations made by
adjudicators under BCIPA, that decision is "regarded, in law,
as no decision at all". There is no legislative intention to
the contrary under the Act, and no declaration that the decision is
void is required. It simply has no legal effect.
The Court of Appeal found that the primary judge was wrong
"to deny BMA the remedy dictated by the finding of
jurisdictional error", and ordered that BCG pay back the $26
million plus interest and other amounts.
This decision is a welcome clarification about the status of
determinations which are found by a court to be void as a result of
jurisdictional error, even where the jurisdictional error concerns
one discrete part of a total claim.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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