Queensland Judgments
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BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd & Ors

Unreported Citation:

[2013] QCA 394


In this matter the respondent, which had constructed a dam for the appellant, had lodged a payment claim under BICIPA and had subsequently obtained an award (as a progress payment) from an adjudicator for the sum of about $25 million.  The primary judge found that the adjudicator had made a jurisdictional error but had then exercised his discretion not to make a declaration of invalidity on the condition that the respondent repay all but a certain amount of the money received as a progress payment.

The first question which arose was whether or not an error in the construction of the contract between the appellant and the respondent by the adjudicator amounted to a jurisdictional error or was merely an error within jurisdiction?  After considering the relevant principles from the decisions in Craig v South Australia (1995) 184 CLR 163 and Kirk v Industrial Court (NSW) (2010) 239 CLR 531, the Court identified that it is necessary to identify with precision what the adjudicator did and how, by reference to the provisions of the Act, it was alleged that he exceeded his powers. In the matter before the Court it was observed that an erroneous construction of a provision of the building contract as to whether or not certain work was or was not within the scope of the contract, could amount to a jurisdictional error.

The second issue determined by the Court was that once it is identified in contested proceedings that an administrative decision is infected by jurisdictional error, the decision is void for that reason and the Court has no ability to give it any effect.  Such an administrative decision is not one which is binding unless and until set aside.  If, however, the decision is not challenged it can be assumed to have effect, however, that is a different case.  In the result, the appellant was entitled to recover all of the money it had paid in satisfaction of the adjudicator’s decision. 

A final matter dealt with by the Court was the rate of interest which was payable on the amount which had to be returned to the appellant.  It appears that the Court did not endorsed the principle that interest was payable at an established rate unless some other rate is shown to be more appropriate.  It also seems that the Court did not accept that the practice of the Court was, necessarily, to award interest on that rate specified in practice directions from time to time relating to default judgments.  Section 58(3) of the Civil Proceedings Act 2011 provides for the payment of pre-judgment interest “at the rate the court considers appropriate”.   However, in the circumstances of the case the Court ordered that interest be payable at the rate of 8.75% being the rate of interest prescribed by Practice Direction No 7 of 2013, pursuant to s 59(3) of the Civil Proceedings Act 2011 (Qld), in respect of money orders.

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