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CITE

Unreported Judgment

Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017[2023] QSC 168Kelly J
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Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017[2023] QSC 168

Reported at

Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017[2023] QSC 168

Reported at

SUPREME COURT OF QUEENSLAND

CITATION:	Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017 & Anor [2023] QSC 168
PARTIES:	SUN ENGINEERING (QLD) PTY LTD ACN 060 655 087 (applicant) v REGISTRAR APPOINTED UNDER SECTION 150 OF THE BUILDING INDUSTRY FAIRNESS (SECURITY OF PAYMENT) ACT 2017 (first respondent) RAVENSWOOD GOLD PTY LTD ACN 637 527 309 (second respondent)
FILE NO/S:	BS No 9346 of 2023
DIVISION:	Trial Division
PROCEEDING:	Originating Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	31 July 2023
DELIVERED AT:	Brisbane
HEARING DATE:	28 July 2023
JUDGE:	Kelly J
ORDERS:	1. The originating application filed 27 July 2023 is dismissed. 2. The applicant shall pay the respondents’ costs of and incidental to the originating application filed 27 July 2023 to be assessed on the standard basis.
CATCHWORDS:	STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – OTHER MATTERS – where the applicant and the second respondent are parties to a construction contract – where the applicant applied to the first respondent for adjudication of a payment claim under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) – where the adjudicator made a decision identifying, inter alia, the adjudication amount – where the second respondent commenced proceedings against the applicant seeking an order that the decision of the adjudicator be declared void on the grounds of jurisdictional error – where the applicant, on the day prior to the commencement of the judicial review proceeding, requested that the first respondent refer the adjudication to another adjudicator pursuant to s 94 of the Act – where the first respondent refused to make the referral – where the applicant commenced proceedings seeking an order that the first respondent refer the adjudication application by 1pm on 31 July 2023 – where s 94 permits the first respondent to make the referral in the event that an adjudicator fails to make a determination – where the applicant contends that a void determination by the adjudicator is akin to a failure to make a determination – whether the applicant’s construction of s 94 is correct and permits the first respondent to make the referral Building Industry Fairness (Security of Payment) Act 2017 (Qld), s 94 Cardinal Project Services Pty Ltd v Hanave Pty Ltd (2011) 81 NSWLR 716, cited Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors [2021] QCA 10, cited BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd & Ors [2015] 1 Qd R 228; [2013] QCA 394, cited Henry v Henry (1996) 185 CLR 571; [1996] HCA 51, cited Jadwan Pty Ltd v Secretary, Department of Health and Aged Care (2003) 145 FCR 1, cited Jeffery & Katuskas v SST Consulting (2009) 239 CLR 75; [2009] HCA 43, cited Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd [2020] NSWCA 172, cited
COUNSEL:	B E Codd, with M T de Waard, for the applicant S Barclay for the first respondent M D Ambrose KC, with H Clift, for the second respondent
SOLICITORS:	Level Field Lawyers for the applicant Holding Redlich for the second respondent

Matters of background

[1]
The applicant (“the contractor”) and the second respondent (“the principal”) are parties to a construction contract dated 22 September 2021 (“the Contract”). The Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“the BIF Act”) applies to the Contract.

[2]
On 4 April 2023, the contractor applied to the first respondent (“the Registrar”) for adjudication of a payment claim under the BIF Act in the amount of $13,146,506.45 (“the adjudication application”). Pursuant to s 86 of the BIF Act, the time for deciding the adjudication application was extended to 18 July 2023. On 18 July 2023, the adjudicator (“Mr Sive”) advised the contractor and the principal that he had made a decision which would be released when his fees were paid. Those fees were paid and on 19 July 2023, Mr Sive’s decision (“the decision”) was communicated to the parties. The decision identified the adjudicated amount as $9,170,485.24 including GST, the due date for payment and the rate of interest.

[3]
By an originating application filed on 26 July 2023 (“the judicial review proceeding”), the principal started a proceeding against the contractor seeking an order that the decision be declared void on the grounds of jurisdictional error.

[4]
On the day prior to the commencement of the judicial review proceeding, the contractor had sent an email to the Registrar which relevantly provided:

“1.
We act for [the contractor], the claimant in the adjudication application numbered QBCC 2274385 made pursuant to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the Act).

2.
As you are aware, the … decision was made on 18 July 2023 and communicated to the parties on 19 July 2023.

3.
The [principal] has given notice that it will be seeking to have the decision set aside and declared void in the Supreme Court.

4.
Whilst the [contractor] maintains the decision was validly made, the [contractor] is aware that a purported but void determination is not a determination.

5.
In circumstances where an adjudicator fails to make a determination, section 94 of the Act permits the claimant to request the registrar refer the original application to another adjudicator.

6.
Notwithstanding the [contractor’s] views of the correctness of the original decision, this letter is a request to the Registrar pursuant to section 94(2)(a) of the Act to refer the original application to another adjudicator.

7.
The [contractor’s] request is not a binding election or in any way a concession in respect to the original determination.

8.
However, having regard to the available authorities, the [contractor] is required to make the request within the statutory time constraints of section 94(2) of the Act in order to preserve its position. The authorities on point make it clear that it is both proper and necessary to exercise this right notwithstanding the original decision has not been (and may not be) later declared void.

9.
Please:

(a)
confirm receipt of this request as a matter of priority;

(b)
confirm by close of business 26 July that the Registrar is referring the application to another adjudicator; and

[5]
The registrar refused to make the referral.

[6]
By an originating application filed 27 July 2023, the contractor started this proceeding in which it seeks an order that the Registrar refer the adjudication application to an adjudicator other than Mr Sive by 1pm on 31 July 2023.

[7]
On the afternoon of Friday 28 July 2023, the proceeding came on for urgent hearing in the applications list.

The relevant provisions of the BIF Act

[8]
Section 3 of the BIF Act sets out the purpose:

“3
The main purpose of Act

(1)
The main purpose of this Act is to help people working in the building and construction industry in being paid for the work they do.

(2)
The main purpose of this Act is to be achieved primarily by—

(a)
requiring the use of statutory trusts for particular contracts related to the building and construction industry; and

(b)
granting an entitlement to progress payments, whether or not the relevant contract makes provision for progress payments; and

(i)
making payment claims; and

(ii)
responding to payment claims; and

(iii)
the adjudication of disputed payment claims; and

(iv)
the recovery of amounts claimed; and

(d)
enabling the use of a statutory charge in favour of subcontractors for payment of the work they do.”

[9]
Section 85 provides for the period within which the adjudicator must decide an adjudication application. Section 86 of the BIF Act provides that a claimant and respondent to an adjudication application may agree in writing that an adjudicator have additional time to decide an adjudication application.

[10]
Section 88 provides that an adjudicator is to decide the amount of the progress payment, the date on which any amount became or becomes payable and the rate of interest payable on any amount.^[1] Subsections 88(5)–(7) are then in the following terms:

“(5)
The adjudicator’s decision must—

(a)
be in writing; and

(b)
include the reasons for the decision, unless the claimant and the respondent have both asked the adjudicator not to include the reasons in the decision.

(6)
The adjudicator must give the registrar—

(a)
a copy of the decision; and

(b)
notice of all fees and expenses paid, and to be paid, to the adjudicator for the decision.

Maximum penalty—40 penalty units.

(7)
The adjudicator must give the registrar the information mentioned in subsection (6) at the same time the adjudicator gives a copy of the decision to the claimant and the respondent.”

[11]
As soon as practicable after being given a copy of a decision by an adjudicator, but not later than five business days after being given the decision, the registrar must give the claimant a certificate of the decision.^[2]

[12]
Section 94 then provides:

“94
Claimant may make new application in certain circumstances

(1)
Subsection (2) applies if an adjudicator, who accepts a referral to decide an adjudication application (the original application), does not decide the application within the period required under section 85.

(2)
The claimant may do either of the following within 5 business days after the period mentioned in subsection (1)—

(a)
request the registrar refer the original application to another adjudicator; or

(b)
make a new adjudication application (the new application) under section 79.

(3)
If the claimant requests the registrar refer the original application to another adjudicator—

(a)
the registrar must refer the application to another adjudicator within 4 business days after the request is made; and

(b)
no fee is payable for referring the original application to another adjudicator.

(4)
Also, if another adjudicator accepts the referral, this division applies for the original application with the following changes—

(a)
the claimant must give the adjudicator a copy of his or her submissions included in the original application within 5 business days after the adjudicator accepts the referral;

(b)
the respondent must give the adjudicator a copy of his or her submissions included in an adjudication response, if any, for the original application within 5 business days after the adjudicator accepts the referral;

(i)
the adjudicator receives the copy of the submission from the respondent; or

(ii)
if the respondent does not give the adjudicator the copy of the submission within the period mentioned in paragraph (b)—immediately after the end of the period;

(d)
in deciding the adjudication application, the adjudicator must not consider any submissions other than—

(i)
the submissions mentioned in paragraph (a) or (b); or

(ii)
further written submissions asked for by the adjudicator under section 84(2)(b).

(5)
This division applies to the new application in the same way it applies to any other adjudication application made under section 79.

(6)
However, the claimant may, despite section 79(2)(b), make the new application within 5 business days after the claimant becomes entitled to act under subsection (2).”

[13]
Section 95 is concerned with the adjudicator’s fees and relevantly provides:

“(6)
An adjudicator is not entitled to be paid any fees or expenses foradjudicating an adjudication application if the adjudicator fails to make a decision on the application.

(7)
An adjudicator does not fail to make a decision only because—

(a)
the adjudication application is withdrawn; or

(b)
the adjudicator decided he or she did not have jurisdiction to adjudicate the application; or

(d)
the adjudicator refuses to communicate the adjudicator’s decision on an adjudication application until the adjudicator’s fees and expenses are paid.

(8)
Also, if a court finds that the adjudicator’s decision is void and unenforceable, the adjudicator is still entitled to be paid any fees or expenses for adjudicating the application if the adjudicator acted in good faith in adjudicating the application.

(9)
In this section—

adjudicating, an adjudication application, includes accepting, considering and deciding the application.”

[14]
Section 97 provides:

“97
Withdrawing from adjudication

(1)
An adjudication application—

(a)
is withdrawn if the claimant has given a written notice of discontinuation to the adjudicator and respondent; or

(b)
is taken to have been withdrawn if the respondent has, before an adjudicator has decided the application, paid the claimant the amount stated in the payment claim the subject of the adjudication application.

Note –

Despite the withdrawal of an adjudication application an adjudicator is still entitled to be paid fees for considering the application, see section 95.

(2)
If subsection (1)(b) applies, the claimant must as soon as practicable inform the adjudicator and the respondent that the adjudication application has been withdrawn because of payment.

(3)
As soon as practicable after an adjudication application is withdrawn, the claimant must inform the registrar that the application has been withdrawn and whether it was withdrawn as mentioned in subsection (1)(a) or (b).

Maximum penalty—20 penalty units.”

[15]
Section 101(4) of the BIF Act contains what might be described as a severance provision in the following terms:

“(4)
If, in any proceedings before a court in relation to any matter arising under a construction contract, the court finds that only a part of an adjudicator’s decision under this chapter is affected by jurisdictional error, the court may—

(a)
identify the part affected by the error; and

(b)
allow the part of the decision not affected by the error to remain binding on the parties to the proceeding.”

The contractor’s contentions

[16]
In this proceeding, the contractor did not:

(a)
assert that the decision was invalid or unenforceable.

(b)
undertake or otherwise proceed on the basis that it was withdrawing the adjudication application.

[17]
Rather, in this proceeding, the contractor submitted that “if the decision is ultimately declared void on the basis contended for by [the principal], that declaration will necessarily operate ab initio such that the effect of the declaration would be that there was no decision at all.”^[3] The contractor further submitted “… if a decision is of no effect at the time it was given such as to be no decision at all, and no further decision which was of effect was made before the lapse of time under s 85, … s 94 would operate to entitle [the contractor] to the appointment of another adjudicator.”^[4] In advancing that submission, the contractor placed significant reliance upon two decisions of the New South Wales Court of Appeal in Cardinal Project Services Pty Ltd v Hanave Pty Ltd^[5] and Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd.^[6]

Consideration

[18]
The critical language in s 94(1) is “… if an adjudicator … does not decide the application within the period required under section 85”. Those circumstances confer upon the claimant an entitlement to act under 94(2) within five business days.^[7] Where s 94(1) uses language that the adjudicator “does not decide the application”, it is referencing 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. That is, s 94(1) contemplates a situation where the power of the adjudicator to make a decision is spent because the adjudicator has failed to make a decision within time rather than the situation where the adjudicator has purported to exercise the power to decide within time by making a decision affected by jurisdictional error. In this regard, I note that s 95 draws a distinction between a “[failure] to make a decision on the application” (s 95(6)) and a decision which “is void and unenforceable” (s 95(8)). Subject to the situations identified in s 95(7), there is a failure to decide for the purposes of s 94(1) where the adjudicator has not within the relevant period given to the adjudicator, the claimant and the respondent a decision in writing, with reasons, which decides the amount of the progress payment, the date on which any amount became or becomes payable and the rate of interest payable on any amount. Whether those circumstances are engaged should be readily and easily ascertainable as a matter of objective fact. It is only in circumstances where there has been such a failure to decide within the relevant period, that the claimant becomes entitled to act so as to request the application be referred to another adjudicator or make a new adjudication application under s 79.

[19]
The construction I have identified as correct is countenanced by the BIF Act when read as a whole and having regard to its purpose. The BIF Act contemplates that an adjudication decision affected by jurisdictional error will still have factual consequences. In Jadwan Pty Ltd v Secretary, Department of Health and Aged Care,^[8] Gray and Downes JJ said:

“[42]
In our view, Bhardwaj cannot be taken to be authority for a universal proposition that jurisdictional error on the part of a decision-maker will lead to the decision having no consequences whatsoever. All that it shows is that the legal and factual consequences of the decision, if any, will depend upon the particular statute. As McHugh, Gummow, Kirby and Hayne JJ said in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 388 – 389:

‘An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.’”

[20]
It may be accepted that a decision involving jurisdictional error will be “no decision at all” unless the statutory provisions under which it is made requires a contrary conclusion.^[9] When regard is had to the scheme of the BIF Act, it can be discerned that an adjudication determination is to be treated as having factual consequences for the purpose of the Act even though it may be affected by jurisdictional error. In this regard, the following may be observed:

(a)
the making of the decision as a matter of fact places an obligation on the adjudicator to give the registrar a copy of the decision, it being an offence for the adjudicator not to do so;^[10]

(b)
the adjudicator must give the registrar the copy of the decision at the same time that the adjudicator gives a copy of the decision to the claimant and the respondent;^[11]

(c)
even if the court finds that the adjudicator’s decision is void and unenforceable, the adjudicator is entitled to be paid any fees or expenses for adjudicating the application if the adjudicator acted in good faith;^[12] “adjudicating” an application being defined to include deciding the application.^[13]

(d)
The BIF Act contains a provision which recognises that a court may find that “only part of an adjudicator’s decision ... is affected by jurisdictional error” andmay “identify the part affected by the error … and allow the part of the decision not affected by the error to remain binding on the parties to be proceeding”.^[14]

[21]
It has been recognised by the Court of Appeal that the BIF Act has an evident purpose of facilitating the recovery of progress payments and that there is, in that commercial context, a desirability for commercial certainty.^[15] The contractor’s construction significantly undermines commercial certainty because it would introduce elements of conjecture about the claimant’s entitlement to act under subsection 94(2) in a broad range of circumstances involving alleged jurisdictional error. It also countenances the prospect of multiple adjudicators providing adjudications about the one adjudication application.

[22]
The construction I have identified is also consistent with what commentators have described broadly as the presumption against unreasonable consequences.^[16] Were the contractor’s interpretation and general approach correct, it would be open to a claimant to resist proceedings for judicial review of an adjudicator’s decision whilst, in a separate proceeding, maintaining a right to compel the registrar to refer the adjudication application to another adjudicator on the ground that there had been no decision at all because the decision was affected by jurisdictional error. The contractor’s construction would give rise to the prospect of multiple court proceedings in which the claimant might adopt contradictory positions. The postulated circumstances would be manifestly unfair to the respondent principal and would tend to bring the administration of justice into disrepute among right thinking people.^[17] The High Court has recognised, as a general proposition, that it is “prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue”.^[18]

[23]
The New South Wales authorities called in aid by the contractor are distinguishable because they considered legislation which, unlike the BIF Act:

(a)
contemplated a right to have a new adjudicator appointed only where the original application had been withdrawn by the complainant and, hence, in asserting the right to appoint a new adjudicator, the claimant was not maintaining inconsistent rights;^[19]

(b)
contained no provision recognising the right of the adjudicator to be paid for a decision notwithstanding that it was declared void and unenforceable.^[20]

(c)
contained no provision requiring the adjudicator to provide, and making it an offence for the adjudicator not to provide, the decision to the registrar.

Orders

1.
The originating application filed 27 July 2023 is dismissed.

2.
The applicant shall pay the respondents’ costs of and incidental to the originating application filed 27 July 2023 to be assessed on the standard basis.

Footnotes

[1]Section 88(1) of the BIF Act.

[2]Section 91(1) of the BIF Act.

[3]Applicant’s outline [23].

[4]Ibid [31].

[5](2011) 81 NSWLR 716.

[6][2020] NSWCA 172.

[7]Section 94(6) of the BIF Act.

[8](2003) 145 FCR 1 at [42].

[9]BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2015] 1 Qd R 228 at 260 [66].

[10]Section 88(6) of the BIF Act.

[11]Section 88(6) of the BIF Act.

[12]Section 95(8) of the BIF Act.

[13]Section 95(9) of the BIF Act.

[14]Section 101(4) of the BIF Act.

[15]Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors [2021] QCA 10 at 13 [46].

[16]Herzfeld & Prince, Interpretation, 2nd Edition [9.30].

[17]See generally Jeffery & Katuskas v SST Consulting (2009) 239 CLR 75 at 93 [27]–[28].

[18]Henry v Henry (1996) 185 CLR 571 at 591.

[19]Building and Construction Industry Security of Payment Act 1999 (NSW), s 26(2) see Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd [2020] NSWCA 172 at [45].

[20]Cf Building and Construction Industry Security of Payment Act 1999 (NSW), s 29.

Editorial Notes

Published Case Name:
Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017 & Anor
Shortened Case Name:
Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017
Reported Citation:
(2023) 15 QR 395
MNC:
[2023] QSC 168
Court:
QSC
Judge(s):
Kelly J
Date:
31 Jul 2023
Selected for Reporting:
Editor's Note

Appeal Status

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Cases Cited List of Cases Cited by this judgment

Case Name	Full Citation	Frequency
BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd	[2015] 1 Qd R 228; [2013] QCA 394	3 citations Jump To Cite 1 - [2013] QCA 394 Cite 2 - [2015] 1 Qd R 228 Cite 3 - [2015] 1 Qd R 228
Cardinal Project Services Pty Ltd v Hanave Pty Ltd	View on:NSWLR(2011) 81 NSWLR 716	2 citations Jump To Cite 1 - (2011) 81 NSWLR 716 Cite 2 - (2011) 81 NSWLR 716
Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd	(2021) 7 QR 34; [2021] QCA 10	2 citations Jump To Cite 1 - [2021] QCA 10 Cite 2 - [2021] QCA 10
Henry v Henry	View on:JADE(1996) 185 CLR 571	2 citations Jump To Cite 1 - (1996) 185 CLR 571 Cite 2 - (1996) 185 CLR 571
Henry v Henry	View on:JADE[1996] HCA 51	1 citation Jump To Cite 1 - [1996] HCA 51
Jadwan Pty Ltd v Secretary, Department of Health and Aged Care	(2003) 145 FCR 1	2 citations Jump To Cite 1 - (2003) 145 FCR 1 Cite 2 - (2003) 145 FCR 1
Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd	View on:JADE(2009) 239 CLR 75	2 citations Jump To Cite 1 - (2009) 239 CLR 75 Cite 2 - (2009) 239 CLR 75
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd & Ors	View on:JADE[2009] HCA 43	1 citation Jump To Cite 1 - [2009] HCA 43
Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd	View on:JADE[2020] NSWCA 172	3 citations Jump To Cite 1 - [2020] NSWCA 172 Cite 2 - [2020] NSWCA 172 Cite 3 - [2020] NSWCA 172
Project Blue Sky v Australian Broadcasting Authority	View on:JADE(1998) 194 C.L.R 355	1 citation Jump To Cite 1 - (1998) 194 C.L.R 355

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Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017[2023] QSC 168

Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017[2023] QSC 168

SUPREME COURT OF QUEENSLAND

Footnotes

Editorial Notes

Appeal Status

Cases Cited List of Cases Cited by this judgment

Cases Citing List of cases on Queensland Judgments citing this Judgment