Adam Carlton-Smith, Partner
Peter Lamont, Associate
Jon Erbacher, Trainee Solicitor
The recent Queensland Supreme Court case of Nebmas Pty Ltd
-v- Sub Divide Pty Ltd & Ors demonstrates the importance
of confirming key dates and timeframes in the building and
construction sector to avoid penalty.
In this case, the Court upheld an adjudicator's decision in
relation to notice timeframes under s21(2)of BCIPA (the Building
& Construction Industry Payments Act 2004 (Qld)), despite the
adjudicator having made a mistake of fact. As a result, the
claimant (Sub Divide) was allowed to refer the dispute to
adjudication despite having failed to comply with the notice
requirements clearly stipulated in BCIPA.
Nebmas, the applicant, performed building works as a contractor
and Sub Divide was a subcontractor to Nebmas. Sub Divide served a
payment claim under BCIPA on Nebmas. No payment was made and no
payment schedule was issued by Nebmas. Under BCIPA, Sub Divide
served a notice referring the matter to adjudication in February
2009. The matter proceeded to adjudication and was determined in
favour of Sub Divide for more than $195,000.
Nebmas applied to the Court for a declaration that the decision
was void on the basis that Sub Divide's notice of its
adjudication application did not comply with the timeframes
prescribed in BCIPA. Nebmas also sought an injunction to restrain
Sub Divide from filing the adjudicator's certificate.
The Adjudicator determined that the notice was given within
time. The Court considered whether the notice was out of time, and
whether that would result in the Adjudicator's decision being
Timeframes under BCIPA
Under BCIPA, an adjudication application can't be made
unless the claimant gives the respondent notice of its intention to
apply, within 20 business days immediately following the due date
In this case, the Court determined that contrary to the
Adjudicator's decision, the notice had, in fact, been given
outside the prescribed period of 20 business days.
Arguments before the Court
Nebmas argued that non-compliance with timeframes under BCIPA
resulted in the adjudication application and the adjudication
decision having no legal effect. A previous decision in the case of
Kell & Rigby Pty Ltd v Guardian International Properties Pty
Ltd was relied upon to support this argument because it had
determined that an equivalent provision was a "mandatory
condition" in the validity of the adjudication
Sub Divide, on the other hand, argued that the provision of the
notice was not a pre-condition to a valid adjudication. It relied
primarily on the case of Brodyn Pty Ltd v Davenport arguing that it
was not the intention of BCIPA that exact compliance of these
timeframe requirements was essential to the existence of a
The adjudicator's power
In considering the adjudicator's power, in this case the
Court deemed that technical elements required under BCIPA could be
treated as dependant upon the satisfaction or opinion of the
adjudicator if they related to a procedural step in the claim
process, and allowed for "speedy and effective" dealing
with the payment process "without undue formality or resort to
The Court also held that "the overall purpose of the
legislation would be better served by permitting an adjudicator to
decide what will usually be the factual question of whether the
step has been taken", which in this case was whether the
notice had been given within time.
Was compliance with the timeframe an essential
With reference to the Brodyn case, and the purpose of BCIPA, the
Court found that the timeframes prescribed were not an essential
requirement and therefore non-compliance did not render the
adjudicator's decision as having no legal effect. Accordingly,
the application was not granted and the injunction was
This decision confirms an adjudicator's power to determine
the factual compliance with a statutory provision and in this case,
it meant that a notice given outside of the prescribed time was
upheld because the adjudicator had determined it to be validly
The Nebmas and Sub Divide case demonstrates the importance of
timing and notification. The consequences of missing timeframes
under BCIPA are well known and potentially disastrous.
Parties to a construction dispute under BCIPA should verify key
dates and timeframes with the other party in writing to guard
against uncertainty and outcomes that can otherwise be avoided.
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