CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS –
REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO
AND RECOVERY OF
PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where the
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS –REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TOAND RECOVERY OFPROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where theapplicant engaged the first respondentto assist it with a development –where the first respondent gave to the applicant a purported payment claim underthe Building Industry Fairness (Security of Payment) Act 2017 (Qld)(BIF Act) – where the applicant provided a payment schedule in theamount of $nil in response – where the first respondent lodgedanadjudication application – where the second respondent, being theadjudicator, made an adjudication decision in favour ofthe first respondent– where the applicant seeks to have the adjudication decision declaredvoid – whether the adjudicationdecision is affected by jurisdictionalerror – whether s. 75(2)(b) of the BIF Act requires that a payment claimincludes aclaim for payment for work actually carried out in the six-month
period prior to the giving of the payment claim – whether
compliance with
s. 75(2) of the BIF Act is itself, as opposed to the adjudicator forming an
opinion as to whether there has been
compliance, a jurisdictional fact that is
required to found the adjudicator’s jurisdiction to make the adjudication
decision
– whether any of the work claimed in the payment claim was in
fact carried out in the six-month period prior to the giving
of the payment
claim
Building and Construction Industry Payments Act 2004 (Qld), s.
17(4), s. 17A
Building and Construction Industry Security of Payment Act
South East Civil and Drainage Contractors Pty Ltd v AMGW Pty
Ltd [2013] QSC 45
[2013] 2 Qd R 189, followed
Southern Han Breakfast Point Pty Ltd
v Lewence Construction Pty Ltd [2016] HCA 52
(2016) 260 CLR 340, cited
Tailored
Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32
[2009] 2 Qd R 171, considered
Total Lifestyle Windows Pty Ltd v Aniko Constructions Pty Ltd [2021]
QSC 92, cited
TWT Property Group Pty Ltd v Cenric Group Pty Ltd
[2020] NSWSC 72, considered
Judgment (90 paragraphs)
[1]
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - ADJUDICATION OF PAYMENT CLAIMS - where the applicant engaged the first respondent to assist it with a development - where the first respondent gave to the applicant a purported payment claim under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) - where the applicant provided a payment schedule in the amount of $nil in response - where the first respondent lodged an adjudication application - where the second respondent, being the adjudicator, made an adjudication decision in favour of the first respondent - where the applicant seeks to have the adjudication decision declared void - whether the adjudication decision is affected by jurisdictional error - whether s. 75(2)(b) of the BIF Act requires that a payment claim includes a claim for payment for work actually carried out in the six-month period prior to the giving of the payment claim - whether compliance with s. 75(2) of the BIF Act is itself, as opposed to the adjudicator forming an opinion as to whether there has been compliance, a jurisdictional fact that is required to found the adjudicator's jurisdiction to make the adjudication decision - whether any of the work claimed in the payment claim was in fact carried out in the six-month period prior to the giving of the payment claim
[2]
Building and Construction Industry Payments Act 2004 (Qld), s. 17(4), s. 17A
Total Lifestyle Windows Pty Ltd v Aniko Constructions Pty Ltd[2021] QSC 92, cited
[31]
TWT Property Group Pty Ltd v Cenric Group Pty Ltd[2020] NSWSC 72, considered
[32]
Submitting appearances for the second and third respondents
[33]
[1] The applicant (Forme Two) seeks to have an adjudication decision dated 20 March 2024 (Decision) made by the second respondent (adjudicator) pursuant to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) in the sum of $162,505.08[1] in favour of the first respondent (McNab) declared void, in whole or part, as a consequence of alleged jurisdictional error. Related relief is also sought. Forme Two has paid into Court, pursuant to orders dated 17 April 2024, the sum of $186,899.21 in respect of the adjudicated amount plus an amount for interest and adjudication costs.
[2] Forme Two submits the Decision is void for jurisdictional error because the payment claim upon which the Decision is based was not a valid payment claim for the purposes of the BIF Act. Specifically, Forme Two submits that payment claim was invalid because it was sent more than six months after the last piece of work was completed in respect of which a claim for payment was made in the payment claim.
[3] In the result, I am satisfied that the Decision is affected by jurisdictional error, and accordingly is void. The application will be granted. In summary, I conclude that the Decision is void because the payment claim on which the Decision is based was not a valid payment claim. That is because it did not contain any claim for payment for works performed in the six months prior to the payment claim being given. I find that is a jurisdictional fact that was not satisfied.
[34]
General principles about jurisdictional error in the context of the BIF Act
[35]
[4] An adjudicator's decision can be reviewed for jurisdictional error and the Court may declare an adjudication decision void, in whole or in part, for jurisdictional error.[2]
[5] The purpose and operation of the BIF Act must be borne in mind in any application for such relief (and in construing the BIF Act), which include that:
[36]
(a) the object of the BIF Act is to ensure cashflow to construction contractors in recognition of the fact that without cash flow, such contractors may not survive;
(b) the procedure of adjudication is subject to strict, fast timeframes;
(c) s. 101 of the BIF Act preserves the parties' ultimate rights that may be pursued by litigation in the ordinary course;
(d) the procedure of adjudication has been described as "pay now, argue later".[3]
[37]
[6] The purpose and operation of such legislation has been commented on by the High Court in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd,[4] including why an adjudication decision is not subject to judicial review for non-jurisdictional errors of law.
[7] The analysis by Bond J (as he then was) in Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd[2020] QSC 133; (2020) 4 QR 410, 422-428 [32]-[42] (Acciona) is a good summary of most of the principles (not exhaustive) relating to jurisdictional error in the context of the BIF Act, and has been regularly adopted by other judges of this Court.[5] I accept those general principles as there articulated.
[38]
[8] Forme Two engaged McNab to assist it with a development in New Farm in about August 2022. The engagement was pursuant to an unsigned contract. The work to be performed was in the nature of developing consultant design drawings for the development.
[9] On 17 January 2024 McNab sent a purported payment claim under the BIF Act to Forme Two. The covering letter to the payment claim suggested that the claim related to "works completed up to the 25th day of December 2023". The date of the 25th of December 2023 was the relevant reference date for the claim under the contract, and accordingly no work completed after that date could properly form part of that claim.
[10] On 18 February 2024 Forme Two responded to the payment claim by providing a payment schedule, with reasons for withholding payment, for the scheduled amount of $nil.
[11] On 23 February 2024, McNab lodged an adjudication application.
[12] On 11 March 2024, Forme Two provided its adjudication response.
[13] The Decision was made by the adjudicator on 20 March 2024.
[14] On 9 April 2024, McNab commenced proceedings in the District Court to obtain judgment for the adjudicated amount. Judgment has not yet been given.
[15] On 12 April 2024, Forme Two filed this proceeding.
[39]
[16] Forme Two's primary argument as to why the Decision is not valid goes like this. The payment claim, on its face (and as a fact), did not make any claim for payment for any work completed by McNab within the six months prior to the giving of the payment claim. That was contrary to the requirements of s. 75(2)(b) of the BIF Act which applied that provides:
[40]
(2) Unless the payment claim relates to a final payment, the claim must be given before the end of whichever of the following periods is the longest -
(a) ...
(b) the period of 6 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied.
[41]
[17] Forme Two submits that compliance with s. 75(2)(b) of the BIF Act is a basic and essential requirement of the BIF Act (or what is sometimes referred to as a category 1 matter) such that non-compliance (which it says the Court can determine for itself) renders the Decision invalid (as the adjudicator lacked jurisdiction to make the Decision). That is, the actual state of affairs is a jurisdictional fact.
[18] A basic and essential requirement or category 1 matter is to be distinguished from a category 2 matter, being a matter about which an adjudicator is required to form an opinion in order to found jurisdiction. If the adjudicator forms the required opinion about a category 2 matter, the adjudication decision will be valid (as the adjudicator had jurisdiction to make the decision) even if the adjudicator errs in forming the opinion, or the opinion is wrong. That is, the adjudicator's opinion as to the state of affairs is a jurisdictional fact, not the actual state of affairs.
[19] The terminology of category 1 and category 2 matters comes from the New South Wales Court of Appeal decision in Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd[2018] NSWCA 339 (Icon) and particularly at [13]-[15] of that decision. In that decision the Court stated (in effect, relevantly for present purposes) that jurisdiction may depend either on an "identified state of affairs" (the first category) or a "state of satisfaction of the decision maker as to an identified state of affairs" (the second category). The first category jurisdiction depends on a finding of a Court as to whether or not the required state of affairs existed, for the second, the Court is only concerned with whether the relevant opinion has been lawfully formed. I am content to adopt the terminology of category 1 and category 2 matters.
[20] There are no binding cases in Queensland where it has been determined one way or the other if compliance with s. 75(2)(b) of the BIF Act is a category 1 or a category 2 matter. There are decisions dealing with the equivalent provisions in other jurisdictions, and decisions dealing with the precursor provisions of the earlier (Qld) () (initially s. 17(4) and then later s. 17A of the BCIPA). There are also decisions dealing with the current closely related provision, s. 75(3) of the BIF Act, that deals with a final payment rather than interim payments.
[42]
Issue 1: What does s. 75(2)(b) require? Is it work the subject of the payment claim or any work at all under the contract within the six month period?
[43]
[21] Before dealing with the construction issue as to whether compliance with s. 75(2)(b) of the BIF Act is a category 1 or category 2 matter, it is first necessary to address one other contentious issue regarding the construction of s. 75(2)(b). Both parties appear to agree that s. 75(2)(b) of the BIF Act is, in this case, the relevant subsection of s. 75(2) to be applied. The issue is whether the section requires the payment claim to include a claim for payment in relation to work carried out in the six months prior to the giving of the payment claim, or whether all that is required is that work has been carried out under the construction contract in the six months prior to the giving of the payment claim even if there is no claim for payment in relation to work performed during that six month period.
[22] Section 75 of the BIF Act relevantly provides as follows:
[44]
(1) A person (the claimant) who is, or who claims to be, entitled to a progress payment may give a payment claim to the person (the respondent) who, under the relevant construction contract, is or may be liable to make the payment.
>
> (2) Unless the payment claim relates to a final payment, the claim must be given before the end of whichever of the following periods is the longest -
>
> (a) the period, if any, worked out under the construction contract;
>
> (b) the period of 6 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied.
>
> (3) If the payment claim relates to a final payment, the claim must be given before the end of whichever of the following periods is the longest -
>
> (a) the period, if any, worked out under the relevant construction contract;
>
> (b) 28 days after the end of the last defects liability period for the construction contract;
>
> (c) 6 months after the completion of all construction work to be carried out under the construction contract;
>
> (d) 6 months after the complete supply of related goods and services to be supplied under the construction contract.
>
> ...
>
> (9) In this section -
>
> final payment means a progress payment that is the final payment for construction work carried out, or for related goods and services supplied, under a construction contract.
>
> ...
[45]
[23] Forme Two submits that the mandatory requirements of s. 75(2)(b) were not satisfied. On its case, the construction work and related goods and services to which the claim relates were supplied no later than 7 May 2023. The payment claim was given on 17 January 2024. The words "to which the claim relates", it submits, makes clear that some of the work done within six months prior to the payment claim must be included/claimed in the payment claim.
[24] The case authority that most squarely supports the position advanced by Forme Two is Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Ltd[2004] NSWCA 393; (2004) 61 NSWLR 515 (Estate Property Holdings), particularly at 519-520 [17]-[21]. That case concerns the NSW equivalent of s. 75(2)(b), namely s. 13(4)(b) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the NSW Act). In considering the NSW equivalent wording,[6] Hodgson JA, with whom Mason P and Giles JA agreed, held:
[46]
[18] ...in my opinion "construction work ... to which the claim relates" in s 13(4)(b) is also the construction work for which payment is claimed in the claim; and accordingly, the requirement of s 13(4)(b) is that some of that construction work be carried out in the relevant twelve month period....
>
> [19] However, in my opinion s 13 - s 15 of the Act do not provide any basis for dividing up the construction work to which the claim relates into items which may be considered discrete, and asking in respect of each such item whether some work was carried out in the twelve month period. Section 13(2)(b) refers to "the amount" of the progress payment, s 14(4) refers to liability to pay "the claimed amount", and s 15(4) refers to "the unpaid portion of the claimed amount": these provisions weigh against the idea that separate consideration should be given to individual items that make up the claimed amount.
>
> ...
>
> [21] ...This is further confirmed by s 13(6), which suggests that items more than twelve months old may be included in a payment claim, when they have been included in previous claims, so long as the payment claim does relate to some work carried out within the twelve month period.
[47]
[25] That approach has been adopted in NSW decisions following. Shortly after Estate Property Holdings was delivered, Campbell J considered the operation of s. 13(4)(b) of the NSW Act in Property & Equity Developments Pty Ltd v Parnell,[7] holding:
[48]
[12] When one is deciding what is "the construction work to which the claim relates", within the meaning of section 13(4)(b) it is necessary to take into account both the definition of "construction work" in section 5 of the BACISOP Act, and also the terms of the claim itself. The definition of "construction work" in the Act is cast in very broad terms, by reference to the types of tasks which can be carried out in the course of building and engineering work. When one is examining the claim to identify what is the "construction work to which the claim relates" in the present case, where the alleged payment claim proceeds by reference to four identified invoices, it is to the terms of those four invoices that one must turn.
>
> ....
>
> [15] ...For the purpose of section 13(4)(b) BACISOP Act, it is necessary to identify a single time which is the time at which "the construction work to which the claim relates was last carried out". That requires the construction work for which the claim seeks payment to be considered as a whole. If any task for which payment is sought by a payment claim was carried out within twelve months before service of the payment claim, then the entirety of the payment claim is within time.
[49]
[26] Then in Pacific General Securities Ltd v Soliman and Sons Pty Ltd,[8] Brereton J relevantly held:
[50]
[37] Moreover, the requirement of s 13(4)(b) is only that the latest of the construction work the subject of the claim have been carried out in the relevant 12-month period [Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Ltd[2004] NSWCA 393; (2004) 61 NSWLR 515 at [18]]. Accordingly, to make good a challenge on this ground, were it otherwise available, the Owners would have to show that none of the construction work the subject of the payment claim had been performed within 12 months before the claim was made.
[51]
[27] See also EQ Constructions Pty Ltd v A-Civil Aust Pty Ltd[2021] NSWSC 1604 at [39] per Williams J.[9]
[28] McNab contends that Forme Two's construction is a nonsensical construction at odds with the legislative intent because it permits the possibility that in cases where work is ongoing:
[52]
(a) a claim for work completed over six months prior is valid as long as it contains a claim for at least one piece of work completed within the six months;
(b) but a claim for work completed over six months prior only is invalid.
[53]
[29] Accordingly, McNab says that rather than operating as a trailing bar to the making of claims for work, the only sensible operation of s. 75(2)(b) is upon claims made after the provision of all work has ceased - that is, it has no operation whilst work is ongoing. No authority for such a proposition was advanced. Insofar as reference was made to the case in Tailored Projects Pty Ltd v Jedfire Pty Ltd[2009] QSC 32; [2009] 2 Qd R 171 where the Court was asked to consider an earlier equivalent of s. 75(2)(b), the consideration in that case concerned when reference dates accrued under the contract, rather than whether s. 75(2)(b) had operation while work was ongoing. It is unhelpful for the issue here under consideration.
[30] I agree that s. 75(2)(b) of the BIF Act does have application such that historically completed work will not be able to be claimed except for the inclusion in the payment claim of a claim for some item of recent work, but it is not nonsensical. It is consistent with s. 75(5) that permits a payment claim to include an amount that was included in a previous payment claim. It is consistent with the idea of not troubling a receiving party with historical claims unless there is also some recent claim made.
[31] The approach in Estate Property Holdings, particularly at [17]-[21], is the correct approach to apply to the BIF Act. It gives effect to the words "to which the claim relates" in s. 75(2)(b) of the BIF Act. It allows the section to have operation in relation to all interim payments - even when the work is not wholly complete. It allows the distinction to operate effectively between interim payments dealt with in s. 75(2) and the final payment dealt with in s. 75(3) that will come into operation when all the work is actually complete.
[54]
Issue 2: How then is the requirement in section 75(2) of the BIF Act to be characterised?
[55]
[32] Turning back then to whether compliance with s. 75(2)(b) of the BIF Act is a category 1 or a category 2 matter. The question of whether or not the section creates a "jurisdictional fact" (in other words, is a category 1 matter) is a matter of statutory construction.[10] The parties appear to agree that s. 75(2)(a) has no application in this case.
[33] Forme Two contends that compliance with s. 75(2)(b) of the BIF Act is a category 1 matter because:
[56]
(a) s. 75(2) uses the word "must", indicating a mandatory requirement for validity;
(b) whether that mandatory requirement is satisfied in any particular case is a matter of objective fact that can be ascertained from the evidence; it does not overly matter that there might be some complexity in ascertaining the objective fact in a particular case;
(c) the decided cases support that outcome.
[57]
[34] Forme Two relies upon a series of cases at [18] of its written reply submissions as to why compliance with section 75(2)(b) of the BIF Act is a category 1 matter. I highlight the following from those cases.
[35] In the case of South East Civil and Drainage Contractors Pty Ltd v AMGW Pty Ltd[2013] QSC 45; [2013] 2 Qd R 189 (South East Civil), Jackson J concluded that a claimant's non-compliance with s. 17(4) of the BCIPA (an earlier equivalent provision) did result in an adjudication decision being void because compliance with that provision was a basic and essential requirement for the validity of the adjudication decision. The mandatory nature of the obligation was important (at 199 [49]) even though compliance might be considered to be one of the more "detailed requirements" of the legislation (a breach of which generally might not result in an adjudication decision being void). Further, time requirements under the Act were carefully calibrated and important, suggesting time was a critical aspect of the scheme (at 199-200 [50]).
[36] In the case of SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd[2020] QSC 307 (SHA), Bond J (as he then was) was dealing with the timing of final payment claims under s. 75(3) of the BIF Act. He concluded that compliance with the time limit in that section was an objective jurisdictional fact, making it a category 1 requirement: see particularly at [36]-[38]. Forme Two submits that there is no good reason to distinguish the categorisation of compliance with s. 75(3) dealing with the final payment from s. 75(2) dealing with interim payments.
[37] I do not find the cases of EHome Construction Pty Ltd v GCB Constructions Pty Ltd[2020] QSC 291 particularly at page 3, or from [3] to [39], relied upon by Forme Two, to be of any great assistance on the issue as the issue did not squarely arise in those cases for consideration. It just appears to have been assumed in both cases that compliance with either ss. 75(2) or (3) of the BIF Act was a basic and essential statutory requirement.
[58]
(a) TWT Property Group Pty Ltd v Cenric Group Pty Ltd[2020] NSWSC 72 (TWT). This case sets up the issue for consideration at [94]-[98]. Some cases (containing obiter) pointing to compliance with provision being jurisdictional are referenced at [99]-[102], namely Maxcon Constructions Pty Ltd v Vadasz (No 2)(2017) 127 SASR 193 at 227-229 [119]-[120] per Blue J with whom Lovell J agreed (Hinton J dissenting), and Fitz Jersey v Atlas Construction Group[2017] NSWSC 340 at [25]- [26] per McDougall J. Whilst acknowledging those cases, Stevenson J at [104]-[106], himself in obiter, concludes to the contrary. I do not agree with the apparent weight Stevenson J has placed on the fact that the factual enquiry might be quite complex - this is sometimes also the position with other factual enquiries that might be necessary into accepted jurisdictional facts;
(b) EQ Constructions Pty Ltd v A-Civil Aust Pty Ltd[2021] NSWSC 1604 per Williams J (EQ Constructions) adopted the approach of Stevenson J in TWT, commencing from [45];
(c) Iridium Developments Pty Ltd v A-Civil Aust Pty Ltd[2021] NSWSC 1601, per Williams (Iridium), adopting the same approach again.
[59]
[40] The contrary submissions advanced by McNab point to:
[60]
(a) the fact of adjudicators being expressly required to consider their own jurisdiction under the BIF Act (s. 84(2)(a)(i));
(b) the issue being one upon which an adjudicator's specialised knowledge might come to bear - suggestive of being a matter left to the determination of the adjudicator;[12]
(c) the fact that an adjudicator's exercise of power includes addressing the parameters of a payment claim and interpreting the payment claim;[13]
(d) Bond J's decision in SHA being distinguished in respect of the NSW equivalent in EQ Constructions at [48]-[57] per Williams J - that the NSW Act was not restricted to final claims was considered important. McNab points out that s. 75(2) of the BIF Act performs a different function to s. 75(3). Williams J followed her position in her further decision of Iridium at [25];
(e) the Queensland decision of Fryberg J in De Neefe Signs Pty Ltd v Build1 (Qld) Pty Ltd[2010] QSC 279 (De Neefe) (which McNab submits should be followed unless considered to be manifestly wrong) where his Honour considered s. 17(4) of the BCIPA (at [22]) concluding that even if not served in accordance with that section the claim did not cease to be a payment claim merely because of that non-compliance;
(f) the ACT Court of Appeal decision in Canberra Drilling Rigs Pty Ltd v Haides Pty Ltd[2019] ACTCA 15; (2019) 14 ACTLR 95 (Canberra Drilling Rigs) where the Court decided it was more consistent with the structure and purpose of the equivalent ACT Act not to make the timing under the equivalent of s. 75(2) of the BIF Act (s. 15(4) in the ACT Act) a jurisdictional issue.
[61]
[41] I would add to that that it is generally accepted that a requirement stipulated in the Act is more amenable to being construed as a category 1 matter if it "is readily determined and little inconvenience is generally caused by identifying it as an essential precondition to the exercise of the relevant powers" (Icon at [14]). It might be in a particular case that deciding whether there has been compliance with s. 75(2) of the BIF Act may be factually complex.
[42] I am persuaded that compliance with s. 75(2)(b) of the BIF Act is a category 1 matter. That properly acknowledges the importance of time under the statutory scheme, and the use of mandatory language. It is a matter that should be able to be readily determined by the Court in most cases. That in some cases the issue might be factually complex is not determinative. Whilst it might be one of the "detailed requirements" of the scheme, it is a time issue that I do not consider that the legislature intended to leave to the adjudicator to definitively decide. Time is important under the scheme.
[43] Nor do I consider that the issue relies particularly on adjudicators' expertise. To the extent that McNab relies on Downer Construction (Australia) Pty Ltd v Energy Australia (2007) 69 NSWLR 72 (Downer), I do not consider the timing requirement under s. 75(2)(b) of the BIF Act to fall within the determination of the "scope and nature" of a payment claim that benefits from an adjudicator's specialised expertise.[14] In that case, the adjudicator's decision concerned whether water ingress experienced by a tunnel that was being constructed was a "latent defect" for the purposes of the contract and the payment claim. This type of qualitative determination is materially different from what needs to be decided under s. 75(2)(b) of the BIF Act.
[44] In my view, this approach is also consistent with the decision in Fulton Hogan Construction Pty Ltd v QH & M Birt Pty Ltd[2019] QSC 23, that was relied upon by McNab to support the proposition that the parameters and interpretation of a payment claim are to be determined by the adjudicator. In that case, Ryan J noted that "while it may be that the existence of a valid payment claim is a jurisdictional fact, its interpretation is a matter for the adjudicator". I consider that whether the purported payment claim complies with s. 75(2)(b) of the BIF Act is a matter that goes to its validity - and therefore is a jurisdictional fact - while the "scope and nature" of that claim, in the sense described in , goes to its interpretation (which is a matter of the adjudicator).
[62]
Issue 3: Was any of the work the subject of the relevant payment claim carried out in the six months prior?
[63]
[50] Forme Two's submission is that the construction work or related goods and services to which the payment claim relates were last supplied by no later than 7 May 2023.
[51] McNab accepts that the payment claim did not include any claim for an amount on account of work undertaken during the period six months before the payment claim was given.[16]
[52] I have dealt with the proper construction of s. 75(2)(b) of the BIF Act under issue 1 - that section requires that the payment claim contain a claim for payment for at least some work carried out in the six months prior to the giving of the payment claim.
[53] Accordingly, McNab's concession is a sufficient basis upon which I can act to conclude that s. 75(2)(b) of the BIF Act was not in fact satisfied in this case. Regardless of that concession, I would otherwise accept Forme Two's submissions at [16]-[40] of its primary written submissions that persuasively demonstrate why, on a consideration of the relevant payment claim and the evidence of Mr Corbin in the adjudication, it is properly concluded that s. 75(2)(b) of the BIF Act was not in fact satisfied in this case.
[64]
[54] It is not necessary to address other potential issues raised by the parties given the findings made. But lest there be an appeal, I will express findings on the following issues in a brief way.
[65]
Was any work carried out in the six-month period prior to the payment claim being given?
[66]
[55] McNab advanced an argument that Forme Two had failed to establish as a matter of fact that no relevant work (that is, work claimed in the payment claim) was completed by McNab within the six months prior to the giving of the payment claim. Of course, McNab made the concession which is recorded in [51] above, which in this case is determinative.
[56] If I had concluded that Forme Two was required to establish as a matter of fact that no work whatsoever was completed by McNab under the construction contract in the six months prior to the giving of the payment claim, then the competing evidence on the matter would have comprised:
[67]
(a) from Forme Two, hearsay evidence going to the matter - only evidence from a solicitor was relied upon;
(b) from McNab, direct evidence going to the matter at [7(a)], [10]-[46], affidavit of Corbin,[17] that was not challenged.
[68]
[57] Whilst there was no formal objection to Forme Two's hearsay evidence, I prefer the direct evidence and conclude that after 17 July 2023 McNab did perform work under the construction contract, although that work was not the subject of any claim for payment in the amount claimed in the relevant payment claim.
[69]
Did the adjudicator form the necessary opinion?
[70]
[58] If the relevant jurisdictional issue was not as I have found in issue 2, but instead was the adjudicator's opinion - in other words, that compliance with s. 75(2)(b) of the BIF Act is a category 2 matter - it would arise for determination whether the adjudicator actually formed the requisite opinion, thereby establishing jurisdiction to make the Decision.
[59] Forme Two submits that the adjudicator did not form the requisite opinion or view as to whether the work to which the payment claim related was performed within six months of the payment claim. The absence of that opinion, determination or view (or "requisite state of satisfaction" to adopt another phrase sometimes used) means, in Forme Two's submission, that a jurisdictional fact or basic and essential requirement was not present in any event (see, for example, Iridium at [24]-[25]).
[60] The adjudicator deals with compliance with s. 75(2)(b) of the BIF Act from page 25 of the Decision ([92]-[115]). Even reading the Decision generously (although bearing in mind the obligation to give reasons in s. 88 of the BIF Act) the adjudicator does not appear to actually form an opinion about whether there has been compliance with s. 75(2)(b) of the BIF Act.
[61] Whilst McNab refers to the adjudicator saying "the Payment Claim was not compromised by section 75(2)(b)", that does not actually address the opinion that was required to be formed, namely was there any work claimed for in the payment claim that was performed within six months of the giving of the payment claim. I am not prepared to construe those words, which posit a negative proposition in general terms, as implying that the requisite opinion was formed. That is particularly so where there is a lack of accompanying reasons from the adjudicator. The position might have been different had the adjudicator referenced some evidence before him that went to the relevant issue about when certain works were performed.
[62] Accordingly, even if I am wrong in my categorisation of s. 75(2)(b) of the BIF Act as a category 1 matter, assuming it then to be a category 2 matter, I am not satisfied that the requisite opinion by the adjudicator was formed. That is jurisdictional error that would justify the relief sought by Forme Two.
[71]
Was the issue about s. 75(2)(b) properly articulated in the payment schedule?
[72]
[63] The alleged non-compliance of the payment claim with s. 75(2)(b) of the BIF Act was not raised in express terms in the payment schedule. Instead, the general words included in the payment schedule (that could possibly refer to a non-compliance with s. 75(2)(b)) were simply "Non conforming payment claim".
[64] Of course, there can be any number of reasons why a payment claim might be alleged to be non-conforming.
[65] This issue goes nowhere though. I have concluded that the purported payment claim was not a valid payment claim for the purposes of the BIF Act that could found jurisdiction in the adjudicator to make a valid adjudication decision. Nothing that occurred during the adjudication process could fix that fundamental problem. And it was a problem that I consider was apparent on the face of the material before the adjudicator - in that respect I refer to and accept Forme Two's primary written submissions at [16]-[40]; it did not require any detailed analysis of the material before the adjudicator for it to be obvious that there was no claim in the payment claim for work performed within the six months prior to the giving of the payment claim. I consider the view that I have expressed is consistent with the approach taken by Jackson J in South East Civil from [18]-[46] and [54].
[73]
Does s. 75(2)(a) of the BIF Act have application?
[74]
[66] I did not understand McNab's submissions to squarely put that s. 75(2)(b) of the BIF Act did not have operation in this case because s. 75(2)(a) of the BIF Act applied. But I can see some suggestion of that in its primary written submissions, for example at [88].
[67] I reject that s. 75(2)(a) of the BIF Act has any application in this case. As was held in the case of Evans Built Pty Ltd v United Petroleum Pty Ltd[2019] QSC 223 (Evans Built) particularly at [18], the contract here provides (in clause 4.2) for when claims for payment may be made; it does not relevantly provide for a period in which a payment claim (before completion) must be given. To adopt the language used in Evans Built, clause 4.2 stipulates the allowed frequency of payment claims but does not deal with the period within which claims must be served.
[75]
[68] I have found that the Decision is affected by jurisdictional error. The conventional relief is to declare the Decision void. I will hear from the parties as to the precise form of relief and as to costs.
[76]
[1] Including GST but excluding interest and adjudication fees.
[77]
[2]Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd[2011] QCA 22; [2012] 1 Qd R 525, 550-556 [67]-[80] per White JA (McMurdo P and Chesterman JA agreeing).
[78]
[3]Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd[2024] QSC 16, [14]-[16] per Wilson J.
[5] See, for example, Total Lifestyle Windows Pty Ltd v Aniko Constructions Pty Ltd[2021] QSC 92, [12]-[14] per Martin J (as he then was); SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd[2020] QSC 307, [10], [31].
[81]
[6] Section 13(4) is set out at [9] of the judgment.
[9] See also Canberra Drilling Rigs Pty Ltd v Haides Pty Ltd[2018] ACTSC 282 at [95]; Commercial Fitouts Australia Pty Ltd v Miracle Ceilings (Aust) Pty Ltd[2020] SASC 11 at [16]; TWT Property Group Pty Ltd v Cenric Group Pty Ltd[2020] NSWSC 72 at [84]; Iridium Developments Pty Ltd v A-Civil Aust Pty Ltd[2021] NSWSC 1601 at [20].
[85]
[10]Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd[2016] HCA 52; (2016) 260 CLR 340, particularly at 357 [47] per the Court. See also Acciona at [34].
[86]
[11] See, for example, MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd[2024] QCA 94 from [23] per Dalton JA (Brown and Kelly JJ agreeing).
[87]
[12]Downer Construction (Australia) Pty Ltd v Energy Australia (2007) 69 NSWLR 72 at 96 [87]-[88] per Giles JA (Santow and Tobias JJA agreeing).
[38] Forme Two submits that the position adopted and the reasoning in the above cases should not be departed from and should be followed by this Court. It further says that in any event it is consistent with the principles articulated in Icon (particularly at [14]) wherein it is acknowledged that there are aspects of these types of Acts that fall into both categories, and that an example of a category 1 matter is the service of a payment claim within the period specified in the Act. It is also said to be consistent with other decisions in Queensland that have determined that whether or not a payment claim complies with section 68 (that gives the meaning of a payment claim) is a jurisdictional issue.[11]
[39] Forme Two submits that insofar as the following decisions of the New South Wales Supreme Court suggest a different categorisation, those cases should not be followed and the reasoning in SHA (in particular) should be preferred. It submits that there is no relevant difference between a final claim and interim claims in this regard and notes that the BIF Act uses the same language and the same expression, "must" for both section 75(2) and section 75(3). I note the following NSW cases:
[45] Further, the fact that the Queensland legislation expressly requires the adjudicator to consider their own jurisdiction does not change this conclusion. This requirement simply reinforces that the adjudicator must turn their mind to whether the payment claim is valid as part of their consideration of jurisdiction.
[46] Further, I consider that s. 75(8) of the BIF Act supports the conclusion that compliance with s. 75(2) goes to the validity of the payment claim. Since s. 75(8) expressly provides that non-compliance with a different mandatory requirement in s. 75 does not affect the validity of the payment claim, the absence of a similar provision in respect of s. 75(2) suggests to me that noncompliance with s. 75(2) does affect the validity of the payment claim.
[47] There is, in my view, no reason to depart from the analogous approach of Bond J in SHA. Just as s. 75(3) of the BIF Act denotes the outer limit of time for a final claim and creates an objective fact that can be determined by the Court, s. 75(2)(b) denotes an outer limit of time for interim claims and creates an objective fact that can be determined by the Court. I also consider there is no good reason to depart from the approach taken by Jackson J in South East Civil, that I consider properly construes the intent of the BCIPA and equally applies to the BIF Act. Like in South East Civil, in this case the non-compliance with s. 75(2)(b) was obvious enough on a consideration of the payment claim and the other material before the adjudicator, and the adjudicator was statutorily obliged to consider his jurisdiction.
[48] Insofar as the authority of De Neefe is concerned, the decision at [22] concludes without providing any detailed reasons that compliance with s. 17(4) of the BCIPA is not a condition precedent to the existence of, nor an essential element of a valid payment claim. A comparison to the decision of Douglas J in Gisley Investments Pty Ltd v Williams[2010] QSC 178 (Gisley) is invited in footnote 14 which case deals with whether an adjudication application made out of time (where the claimant incorrectly acted on the basis that there was no valid payment schedule) resulted in the adjudication decision being void. Douglas J identified the relevant statutory construction exercise to be undertaken at [16], and concluded at [18] that in the particular case the real objects of the Act were not undermined by not treating the adjudication application (and thereafter decision) as a nullity. To the contrary here, I consider the real objects of the Act concerning time would be undermined by not treating the payment claim (and therefore the Decision) as a nullity. Regardless, I do not consider that the decision in Gisley provides any strong support for the decision in De Neefe. Faced with the competing decisions and reasoning in De Neefe and South East Civil, even though Jackson J did not appear to have been referred to the earlier decision, I prefer and agree with the reasoning in South East Civil. I decline to follow the approach in De Neefe at [22].
[49] Insofar as the case of Canberra Drilling Rigs is concerned, it is distinguishable. The parts of the case relied upon by McNab only concern the issue of whether actual entitlement is a precondition to the payment claim being valid and say nothing about the timing of the claim being made (see at [66] of McNab's primary written submissions).