In September 2021, Sun Engineering (Qld) Pty Ltd (Sun Engineering), as Contractor, and Ravenswood Gold Pty Ltd (Ravenswood), as Principal, entered into a construction contract.
On 4 April 2023, Sun Engineering applied for adjudication of a payment claim under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) in the amount of $13,146,506.45. On 19 July 2023, after the time for deciding the adjudication application as extended, the adjudication decision provided an adjudicated amount of $9,170,485.24 payable by Ravenswood (Decision).
On 25 July 2022, Sun Engineering sent an email to the Registrar which requested the adjudication application be referred to another adjudicator stating that:
- Ravenswood had given notice that it would be seeking to have the Decision set aside and declared void;
- while Sun Engineering maintained the validity of the Decision, it was aware that a purported but void determination is not a determination; and
- in circumstances where an adjudicator fails to make a determination, the BIF Act permits Sun Engineering to request the Registrar refer the adjudication application to another adjudicator.
The Registrar refused to make the referral.
The next day Ravenswood commenced proceedings against Sun Engineering seeking an order that the Adjudication Decision be declared void on the grounds of jurisdictional error.
Following the Registrar’s refusal to refer the adjudication application to another adjudicator, Sun Engineering filed an originating application seeking urgent orders.
Sun Engineering submitted that was that if the Decision was declared void on the basis contended for by Ravenwood, that effect of that declaration would be that there was no decision at all. Further, if the Decision was no effect, and there is an absence of a further decision, the provisions of the BIF Act would entitle Sun Engineering to the appointment of another adjudicator.
What did the Court find?
In considering Sun Engineering’s application, Kelly J referenced the relevant section of BIF Act (being section 94). This section permits a claimant to commence a new adjudication application where an adjudicator “does not decide the application within the period required…”. In considering the wording of the relevant section of the BIF Act, His Honour said that this language refers to a situation “where there has been a failure to decide as distinct from a situation where a decision is made which is void and unenforceable because of jurisdictional error.”
Kelly J also said that if the BIF Act were to allow void and unenforceable adjudication decisions to be referred to another adjudicator, it would also be admitting as acceptable or possible the prospect of multiple adjudicators providing adjudications about the one adjudication application.
Why is it important?
This case demonstrates the distinction between a void and unenforceable adjudication decision and a decision that has not been made at all. It is only where an adjudicator has failed to deliver a decision within the relevant time period allowed by the BIF Act, that a claimant becomes entitled to request that the application be referred to another adjudicator (or to make a new adjudication application).
How can HWLE help you?
We have considerable experience in relation to the BIF Act and payment disputes, including the adjudication process and our lawyers can provide tailored advice at all stages.
This article was written by Colin Harris, Partner and Ellie Clark, Law Clerk.