Building, engineering and related contracts often include a
pre-agreed dispute resolution mechanism to cater for those
occasions when things aren't going too well. So, when the
proverbial hits the fan and disputes are afoot, the question is
whether a contractor, subcontractor or consultant can also pursue
their statutory remedies under the Security of Payments Act.
In the recent case of Civil Mining & Construction Pty
Ltd v Isaac Regional Council, the Queensland Supreme Court
found that there was no impediment to the contractor pursuing its
interim remedies under the Building and Construction Industry
Payments Act (Qld) 2004 (the Act) alongside a dispute
resolution process under the contract.
Isaac Regional Council (Isaac) and Civil Mining &
Construction (CMC) entered into a contract for the
construction of substantial road works in North Queensland.
There had been an extensive history of disputes on the project
and on 11 August 2014, CMC served its final payment claim for a
substantial amount of money. Unsurprisingly, Isaac submitted a
payment schedule for a lot less than the amount claimed and
submitted that the use of adjudication, when the contractual
dispute resolution process was underway, was an abuse of process.
That is, the dispute process under the contract would deal with the
same matters as adjudication, therefore, adjudication under the Act
shouldn't be allowed.
CMC denied it was abusing its entitlements under the Act and
said it would proceed to adjudication in respect of its final
payment claim. Issac stated that a combination of two previous
failed adjudications, Issac's dispute of CMC's claim and
CMC's pursuit of the dispute through the contractual process
made any adjudication under the Act an abuse of process.
The courts quickly disposed the first two issues in favour of
CMC and went on to address the third issue. That is, Issac sought
to rely on previous decisions which held that in certain
circumstances where the contractual dispute process had been
engaged, adjudication was considered oppressive.
The courts looked closely at the authorities Isaac cited and
found that those determinations were made against very different
factual backgrounds. In the case of Falgat v Equity
Australia, the judge restrained a builder from pursuing its
statutory remedies under the equivalent NSW Act where the builder
had also sued for moneys owing. In J Hutchinson v Galform,
the judge granted an injunction where the subcontractor had agreed
that the legal proceedings should determine the subcontractor's
right to be paid. Neither of these were the same as the present
matter so the courts distinguished them from the dispute at
The court found that the purpose of the Act was for CMC to have
the benefit of the expeditious nature of the statutory process in
pursuit of a valid claim. In addition, there was no impediment to
the concurrent pursuit of the process under the contract and under
The court also found that as an adjudicator's decision is an
interim one and does not finally resolve the rights of the parties
under the contract, the process under the Act may be pursued
concurrently with the dispute mechanism under the contract.
When faced with a long and arduous dispute, there could be
circumstances in which that dispute, or part of that dispute, could
be determined by adjudication on an interim basis, which could see
some cash in the door in the interim.
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