In Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd¹ the Queensland Supreme Court considered whether an adjudicator refusing to make a decision was a determination and further, whether a payment made after a payment schedule was issued was considered a “new reason” which an adjudicator must not have regard to.

Summary

In Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2025] QSC 147, the Queensland Supreme Court confirmed that:

1. if an adjudicator decides not to issue a decision due to perceived bias, this is not a “decision” for the purposes of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act); and
2. submissions made in respect to payments made after the payment schedule and in excess of the scheduled amount were new reasons, which:
   • under s82(4) of the BIF Act must not be included in any adjudication response; and
   • under s88(3)(b) of the BIF Act must not be considered by the adjudicator.

Facts of the case

In or around December 2021, Bright Days Herston Pty Ltd (Bright Days) engaged ATG Project & Property Solution Pty Ltd (ATG) under a design and construct contract for the development of a childcare centre in Herston.

By way of a brief summary of events:

• on 25 September 2023, ATG served a payment claim on Bright Days claiming $1,323,003.95;
• on 10 October 2023, the Superintendent issued a payment certificate in the amount of $728,738.00;
• on 17 October 2023, Bright Days served a payment schedule on ATG in response, scheduling an amount of $71,158.00, with reference to an existing credit balance of $369,148.33;
• on 19 October 2023, ATG made an application for adjudication under the BIF Act (Application) which was accepted by an adjudicator (First Adjudicator);
• on 27 October 2023, the solicitors for Bright Days wrote to the First Adjudicator inviting him to reconsider his eligibility to adjudicate the Application due to a potential conflict of interest;
• on 30 October 2023, the First Adjudicator acknowledged a possibility of a perceived conflict of interest and asked by email for the parties’ confirmation to continue acting as adjudicator for the Application. Bright Days objected to the First Adjudicator’s appointment;
• on 1 November 2023, Bright Days paid $719,435.45 to ATG;
• on 2 November 2023, the First Adjudicator informed the parties by email that he did not intend to issue a decision in regards to the Application and made a note that the parties could submit a new application or the Application to a different adjudicator under s94 of the BIF Act; and
• on 7 December 2023, ATG requested the Application be referred to another adjudicator. The Application was accepted by an adjudicator, Mr Morrow (Second Adjudicator) who on 22 January 2024, issued an adjudication decision in favour of ATG in the amount of $1,004,306.52.

Bright Days filed an application to the Supreme Court of Queensland to set aside the adjudication decision, alleging it was void on the grounds of jurisdictional error, namely that:

• the Application was not validly referred to the Second Adjudicator; and
• the submissions of Bright Days were not considered by the Second Adjudicator.

Findings

No valid referral

Bright Days’ primary position was that there was no valid referral to the Second Adjudicator because the First Adjudicator’s decision not to decide the Application amounted to a decision made under the BIF Act.

Treston J refuted this ground by considering that the First Adjudicator’s “decision” did not satisfy the three elements required by the definition of “adjudicating” in s95(9), being accepting, considering, and deciding.

Instead, this “decision” was a declaration of accepting Bright Days’ conflict of interest concerns and retracting his acceptance of the Application by not issuing a decision.

Further, the First Adjudicator’s reference to allocating another adjudicator under s94 of the BIF Act in his “decision” reinforced the notion that the First Adjudicator had not made a decision for the purposes of the BIF Act.

Accordingly, Treston J found that the Adjudicator did have jurisdiction to determine the Application.

Failure to consider submissions

Bright Days asserted that the Adjudicator failed to take into account its submissions about the payment it made to ATG on 1 November 2023 and in doing so, erred in calculating the progress payment to be paid.

Treston J considered that the central issue was whether the payment schedule identified this payment. Her Honour determined that if the Court was satisfied that the payment dated 1 November 2023 was in fact referred to, or was somehow foreshadowed in the payment schedule, that it might have been accepted that the Adjudicator wrongly ignored all submissions relevant to that payment. As the Court found it did not, Bright Days was precluded from raising the 1 November 2023 payment in the adjudication as it constituted a new reason.

Accordingly, the application to the Supreme Court was dismissed.

What do you need to do?

To avoid similar outcomes, respondents to adjudication applications should carefully consider when a decision of an adjudicator is considered a ‘decision’ for the purposes of the BIF Act. As seen in this case, parties can suffer costs consequences by bringing applications which are ultimately unsuccessful.

Further, if you intend to make a payment to a party and rely on that payment as part of your adjudication response, it is imperative that the payment is made before the payment schedule is issued, and that the payment is referred to in the payment schedule.

Help from HWLE

Navigating security of payment legislation can be challenging. Given the short timeframes contained in security of payment legislation, it is important to seek legal advice at an early stage. Obtaining strategic support at an early stage in a dispute can be vital to protecting your business’s interests and successfully completing a project.

Our experienced Construction & Infrastructure team specialise in navigating the complexities of the security of payment legislation and can assist you with any queries you may have in the building process.

This article was prepared by Colin Harris, Partner and Samuel Bates, Solicitor.

¹ [2025] QSC 147.