Applying for a declaration that an Adjudication Decision is void
is a commonplace response to an adverse Adjudication Decision. What
needs to be borne in mind is that the mere filing of such
Application will not, without more, stop the successful claimant
from enforcing the Adjudication Decision. This was reinforced
recently in the New South Wales Supreme Court decision of Atlas
Construction Group Pty Limited v Fitz Jersey Pty
The parties entered into a contract for a large mixed use
Atlas served a Payment Claim which was the subject of an
Adjudication Decision (the Adjudicator determined that the claimant
was entitled to about $ 11 million).
Fitz Jersey, believing that the Payment Claim had been delivered
outside of the statutory 12 month period provided by section
13(4)(b) of the Building and Construction Industry Security of
Payment Act 1999 (NSW) applied to the Court for a declaration
that the Adjudication Decision was void
Crucially (and inexplicably), Fitz Jersey did not seek
Atlas' undertaking that it would not seek to enforce the
Adjudication Decision nor did it apply to the Court for an order
restraining Atlas from taking steps enforce the Adjudication
Atlas obtained the Adjudication Certificate, filed it in the
Court, obtained a garnishee order and obtained the amount of the
Adjudication Decision from Fitz Jersey's bank account.
Fitz Jersey then (after the money had been paid) sought relief
against the garnishee order.
Before McDougall J Fitz Jersey argued that it was incumbent upon
Atlas (when obtaining the garnishee order) to tell the Court that
Fitz Jersey had commenced the Proceeding.
That argument was (perhaps unsurprisingly) not persuasive. At
 His Honour said:
But an application for what is essentially an administrative
decision, to issue a garnishee order, is not to be equated with an
ex parte application to a judge seeking injunctive or equivalent
relief. The material that is to be put before the court on an
application for issue of a garnishee order is specified in the
rules. I do not understand why it is incumbent on an applicant for
a garnishee order to do more. I am, of course, prepared to accept
that there may be circumstances where, notwithstanding the
requirements of the rules, it could be seen to have been in bad
faith to procure the issue of a garnishee order, so that the court
might set it aside accordingly. But the circumstances of this case
seem to me to fall well short of any such bad faith.
In absence of an undertaking or an injunction the Court accepted
that Atlas was perfectly entitled to proceed as it did and the
Application was dismissed with costs.
Further, His Honour indicated that even if he were to consider
the Application as one for an interlocutory injunction, he would
refuse the relief sought. From the Judgment it would appear that
the fact that Atlas had obtained the money and that there was no
evidence to suggest that Atlas could not repay the money if called
upon to do so, weighed heavily upon His Honour's mind.
Take home points
Principals need to consider their rights carefully when they
receive an adverse Adjudication Decision. Importantly, they need to
quickly determine whether they intend to apply to have the
Adjudication Decision declared void and, if they are so intending,
they need to either obtain the other side's undertaking to not
enforce the Adjudication Decision or they need to seek an
interlocutory injunction in the Supreme Court2.
We note that there is some conflict in the authorities as to
what evidence needs to be marshalled in order for a principal to be
able to forcefully argue that the balance of convenience favours
the granting of an injunction3. We observe that a mere
allegation that a claimant will not be able to repay and
Adjudicated Amount (such as occurred in the present case) will
certainly not get the principal across the line.
We recommend that you obtain legal advice as a matter of the
utmost urgency if you receive an adverse Adjudication Decision.
1 NSWSC 72.
2 Subject to the terms of the Adjudication
Decision, a claimant can generally obtain an Adjudication
Certificate 5 business days after the Adjudication Decision is
received; see sections 29 and 30 of the Building and
Construction Industry Payments Act 2004 (Qld)
3R J Neller Buidling Pty Ltd v Kjerulf
David Ainsworth  1 Qd R 390 cf BRB Modular Pty Ltd v
AWX Constructions Pty Ltd & Ors  QSC 222
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guide to the subject matter. Specialist advice should be sought
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