Court of Appeal confirms that a late adjudication decision will be void and broadens scope of works not requiring a QBCC licence

In Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors [2021] QCA 10, Civil Contractors appealed a decision of the Queensland Supreme Court, which declared an adjudication’s determination void because:

  1. the adjudicator decided the adjudication after the maximum period allowed under Building Industry Fairness (Security of Payment) Act 2017 (Qld) (Act); and
  2. in addition, Civil Contractors did not hold the requisite QBCC licence to carry out a very minor portion of the works under the contract, which meant that it was not entitled to any payment under the Act.

On appeal, the Queensland Court of Appeal:

  1. confirmed that an adjudication decision delivered after the maximum period is void; and
  2. determined that the minor works, being the relocation of a bike rack and metal seat on a footpath, were not building works for the purposes of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) and consequently did not require a building licence.

Strict time limits for deciding an adjudication application

Section 85(1) of the Act requires an adjudicator to decide an adjudication application within 10 business days after the adjudication response date for a standard payment claim, or 15 business days after the response date for a complex payment claim. The time can be extended in accordance with section 86 of the Act.

If the adjudicator does not decide the application within the required time, under section 94 of the Act, the claimant may either request the QBCC Registrar refer the application to a different adjudicator or make a new application. However, the Act does not state that a late decision is void.

In this case, the adjudicator delivered a decision. Both parties accepted that the decision was made after the timeframe required by the Act. The question therefore was: Does the adjudicator have power to make a decision late, or does the adjudicator’s power to decide the application expire when the time limit expires?

The Court of Appeal determined that following the expiry of the timeframe prescribed by the Act, an adjudicator has no power to decide an application. The Court reasoned this because, among other things:

  1. section 86 provides for a situation where the parties may agree that the adjudicator has additional time to decide the application – the implication being that absent such an agreement, the adjudicator would not have additional time to decide the application;
  2. of the importance of having commercial certainty in the security of payment regime; and
  3. enforcing a strict cut off period in which an adjudicator has to decide an adjudication creates a stronger incentive for the adjudicator to decide in accordance with the timeframes required by the Act.

Under the NSW and Victorian security of payment legislation, a late decision made by an adjudicator is still binding on the parties. Like the Queensland Act, those acts do not expressly state whether a late decision is binding or not. However, the courts in NSW and Victoria have held that it is. The Queensland Court of Appeal decided that those decisions should not be followed because the wording of the Queensland Act is different.

The Court of Appeal also decided that, because the adjudicator did not make a decision within the time required by the Act, he was not entitled to any fees.

Unlicensed building work under the QBCC Act

The Queensland Supreme Court determined that Civil Contractors had carried out building work without holding an appropriate licence under the QBCC Act. Therefore, Civil Contractors was not entitled to any payment under the Act.

There was only very minor work for which Civil Contractors didn’t have a licence. The work was the removal and replacement of a bike rack and metal seat attached to the footpath.

Civil Contractors argued that the bike rack and seat works did not require a building licence because they were structures on a road and therefore fell within the exception to building work in Item 14 of schedule 1 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (Regulation). However, the primary judge held that the exception did not apply because the works were properly described as structures on a footpath, rather than a road, to which no exception applies.

The Court of Appeal disagreed with the primary judge’s decision on this point, finding that the bike rack and seat works were:

  1. part of the construction of the footpath, and therefore fell within the exception in Item 15 of Schedule 1 of the Regulation; and
  2. also structures on a road, and therefore fell within the exception in Item 14 of Schedule 1 of the Regulation.

Takeaway

This case confirms that a favourable adjudication decision can be taken away from a party through no fault of their own, simply because an adjudicator decides an application late. Additionally, it broadens the scope of exceptions not requiring a QBCC building licence.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader’s specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed. 

Key contacts:

Stephen Pyman – Principal & Director

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