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[2024] QSC 30
This case concerned the review of an adjudicator’s decision under the Building Industry Fairness (Security of Payment) Act 2017. The respondent in the adjudication alleged in reply submissions that the applicant had performed specific building works without a necessary licence. The applicant was not given an opportunity to respond to these newly raised issues. The adjudicator accepted the respondent’s reply submissions and as a result, found that they did not have jurisdiction. The applicant sought a review of this decision alleging that the adjudicator had made an error of law in denying jurisdiction and in failing to allow procedural fairness to the applicant. In accepting the submissions of the applicant, the court considered the circumstances in which an adjudication decision under the act should be set aside.
Applegarth J
8 March 2024
The first respondent owns a solar farm in Hervey Bay. [8]. The applicant is a licensed electrical contractor. [8]. The parties entered into a contract under which the applicant would operate and maintain the first respondent’s solar farm in exchange for an annual fee, and an additional fee for any additional services rendered. [9]. The contract required the applicant to carry out repair works, and required the applicant to ensure that work carried out in relation to the contract was appropriately licenced. [12]. The contract came to an end in 2023, and the applicant brought an adjudication application under the Building Industry Fairness (Security of Payment) Act 2017 (“BIF Act”) seeking various unpaid fees. [2].
The first respondent in its primary submissions alleged, inter alia, that the applicant carried out or undertook to carry out work without a licence in breach of s 42 Queensland Building and Construction Commission Act 1991 (“QBCC Act”). [19]. Notably, the first respondent did not identify any specific work that was said to be without a licence. [21], [27]. The applicant, in response, accepted that it did not hold a building licence, but asserted that it did not require one because it fell under the “head contractor exemption” in Sch 1A, s 8 QBCC Act. [23]. In submissions in reply the first respondent raised, for the first time, four specific instances of work that it asserted the applicant performed unlicensed. [27]. The adjudicator rejected three of the instances raised by the first respondent but accepted the final one. [28]. The work that the adjudicator found to be unlicenced involved an electrician using “Tough & Wide Gorilla Tape” to tape a small piece of plywood to the floor to cover a worn section of vinyl. [50]. The plywood was not otherwise affixed to the floor, and the total value of the work was $294.24. [50].
The applicant contended that the adjudicator’s decision was infected by three jurisdictional errors.
First, they alleged that it was not afforded procedural fairness as new issues were raised in the first respondent’s reply submissions and the applicant was not given the opportunity to respond. [31]. This was a breach of procedural fairness. [31]–[32].
Second, the applicant submitted that the adjudicator erred in finding that the relevant works required a licence. [45]. The Queensland Building and Construction Commission Regulation 2018 (“QBCC Regulation”) sets out various types of work that are not building work. Relevantly, under Item 30, Schedule 1 of the QBCC Regulation laying of “carpets, floating floors or vinyl” is not building work. [55]. “Floating floor” is defined to mean “a floor that covers a subfloor but is not fixed to the subfloor”. [55]. The Court noted that the word “fixed” in Item 30 should be given a meaning that fits its context. [61]. It would be an odd outcome if the exemption applied to taping carpet or vinyl but not plywood. [62]. The Court therefore held that the plywood covered but was not fixed to the floor. As a result, a licence was not required for the work performed. [64].
Third, the first respondent submitted that even if the adjudicator made a jurisdictional error, it was not a material error that would require the setting aside of the adjudicator’s decision. [76]. The Court rejected this submission in respect of both the procedural fairness and the floating floor issues. An error will be material if the ultimate decision “could have been different” had the error not been made. [78]. As to procedural fairness, had the applicant been given the opportunity to make submissions on the question of whether a licence was needed for the relevant works, the adjudicator may not have led themselves into error. [83]. As to the floating floor issue, the court found that if the error was not made the adjudicator would have found that they had jurisdiction. [94]. As a result, both errors were material.
The first respondent contended that because the adjudicator found a lack of jurisdiction due to the reference date issue, the other jurisdictional errors were not material. [93]. The submission was that the adjudicator would have denied jurisdiction in any event. [93]. The Court rejected this argument because the adjudicator’s decision could give rise to a Dualcorp issue estoppel, such that future adjudicators were bound by the finding that the applicant carried out unlicensed work. [94]. As a result, if the decision stood, it would have “diabolical” consequences for the applicant. [95]. On that basis, the errors in the decision were material. [107].
Under s 101(4) of the BIF Act, the court can set aside only part of a decision affected by jurisdictional error. [119]. The Court considered it appropriate to set aside the adjudicator’s decision except insofar as it related to the reference date point. [124].
L Inglis