Welcome back to Construction Insights, your fortnightly resource for staying informed on the evolving landscape of construction law and industry developments. This fortnight features cases regarding payment claim specificity, approved variations and refusing to consider submissions.
Case update: Refusal to consider submissions
Court of Appeal confirms reluctance to find jurisdictional error – fully substantiated payment claims are critical.
The recent decision in Builtcom Constructions Pty Ltd v VSD Investments Pty Ltd (No 2) [2025] NSWCA 134 reaffirms that Courts are unlikely to overturn adjudication decisions just because an adjudicator overlooked submissions that it considered did not comply with Security of Payment legislation.
A contractor (Builtcom) issued a final payment claim to a principal (VSD) for approximately $30.6 million. At adjudication, the adjudicator awarded Builtcom ~$8.5 million, refusing to consider certain submissions because supporting documentation was provided in the adjudication application, not the payment claim. The adjudicator applied the Cardno test, requiring payment claims to be detailed enough for the respondent to respond effectively in the payment schedule.
Builtcom commenced proceedings in the NSW Supreme Court, seeking to set aside the decision on the basis that the adjudicator committed jurisdictional error in making its decision. The primary judge disagreed with Builtcom and the adjudication decision was upheld.
On appeal, Builtcom argued that the primary judge erred in finding that:
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- An adjudicator’s decision on whether a submission is “duly made” is not reviewable.
- The adjudicator’s refusal to consider certain submissions, though an error of law, was not a jurisdictional error.
The Court of Appeal upheld the primary decision. It confirmed that adjudicators have discretion to decide if submissions are ‘duly made’, and such decisions are generally not subject to judicial review. Although the adjudicator’s strict application of the Cardno test amounted to an error of law, the majority of the Court found that this error of law did not, by itself, give rise to a jurisdictional error. The appeal was dismissed.
Takeaway
This decision is a reminder that precision in payment claims is vital for claimants, and all supporting documentation should be included in a payment claim. Whether a submission is considered duly made is a matter for an adjudicator, and courts are unwilling to overturn adjudication decisions even if an adjudicator has committed an error of law.
Read the full judgement here: PDF – Builtcom Constructions Pty Ltd v VSD Investments Pty Ltd (No 2) [2025] NSWCA 134 | NSW COURT OF APPEAL
Case update: Principals cannot renege on approved variations
The Supreme Court confirms that Principals cannot renege on approved variations
In a significant ruling, the Supreme Court in Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust (No 2) [2025] NSWSC 593 has confirmed that principals cannot retract or dispute variations once approved under a construction contract. This decision provides additional certainty for contractors once variations are formally approved.
Calibre Construction Group Pty Ltd (Calibre), the contractor, sought $270,434 for unpaid variations. In response, the principal, Kaloriziko Pty Ltd (Kaloriziko) sought to recover $689,922 from nine variations it had already paid, asserting that its approvals were provisional or “on account”, and thus subject to later adjustment.
The Supreme Court clarified that the “on account” concept – where payments are provisional and adjustable – applies solely to progress payments not variations. Under the Contract, the Principal’s Representative had the authority to direct and price variations, rendering them final as approved work. The Contract provided no basis for treating these approvals as provisional or revisable. Once approved – and in many cases paid – Kaloriziko could not later dispute the variations. The Court emphasised that approval by the Principal’s Representative locked in the variation’s status, leaving no avenue for subsequent disputes.
Takeaway
This decision affirms that approved variations are binding and cannot be contested in later proceedings. It also underscores the need for principals to exercise caution and diligence when approving variations, noting the restrictions on contesting same.
Read the full judgement here: PDF – Calibre Construction Group Pty Ltd v Kaloriziko Pty Ltd atf Ryde Combined Unit Trust; Kaloriziko Pty Ltd atf Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd (No 2) [2025] NSWSC 593 | NSW SUPREME COURT
Case update: Refusal to consider submissions and offsetting adjudicated amounts
Court of Appeal confirms reluctance to find jurisdictional error – fully substantiated payment claims are critical.
The Supreme Court of Queensland’s decision in Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2025] QSC 147 clarifies two key points under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act):
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- an adjudicator’s withdrawal does not constitute a “decision”; and
- payments made after the payment schedule are not considered in determining the adjudicated amount.
Bright Days Herston Pty Ltd (Bright Days), the principal, contracted ATG Project & Property Solutions Pty Ltd (ATG), the contractor, to design and deliver a childcare centre in Herston, Queensland. A payment dispute arose when:
- ATG issued a payment claim for $1,323,003.93 (including GST).
- The Superintendent certified $782,738.00 (including GST).
- Bright Days issued a payment schedule for $71,158.00 (being the GST component of the above).
- ATG sought adjudication, resulting in an award of ~$1 million.
The initial adjudicator, accepted the adjudication application but withdrew on 2 November 2023 due to a potential “appearance of bias” after Bright Days objected, citing his employer’s engagement with their solicitors on an unrelated matter. ATG then requested the registrar to refer the application to a second adjudicator, who awarded the $1 million.
Bright Days challenged the second adjudicator’s decision, arguing:
- Jurisdictional error: The first adjudicator’s withdrawal was effectively a decision, rendering the second adjudicator’s jurisdiction invalid.
- Failure to consider payment: Bright Days made a payment of $719,435.45 on 1 November 2023, after the payment schedule, which should have been offset against the adjudicated amount.
The Supreme Court dismissed Bright Days’ application:
- Withdrawal not a decision: The Court found that the first adjudicator’s withdrawal was not a substantive decision under the BIF Act. He had not considered or ruled on the dispute’s merits, allowing a referral to a new adjudicator under section 94.
- Post-schedule payment irrelevant: Citing Chevron Park Pty Ltd v Groupline Constructions Pty Ltd & Ors, the Court held that adjudicators assess progress payments based on the payment claim and schedule as of the reference date. The payment, made after the schedule, was outside this scope. Bright Days’ reliance on Duro Felguera Australia Pty Ltd v Samsung C&T Corporation (a WA case) failed due to legislative differences – the BIF Act ties payments to a “reference date”, unlike WA’s broader “payment dispute” framework.
Takeaway
This decision reinforces that:
- An adjudicator’s withdrawal does not bar referral to another adjudicator.
- In Queensland, adjudicator’s are not required to consider payments made after the payment schedule to offset adjudicated amounts in adjudications.
Read the full judgement here: PDF – Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2025] QSC 147 | QLD SUPREME COURT
Queensland Transport and Roads Investment Program (QTRIP) to overhaul tender process
On 17 June 2025, the Queensland Government announced their plan to implement recommendations from an independent review to improve the tender process for major transport projects across Queensland.
The review led by infrastructure expert, Rodd Staples, highlighted the major delivery delays and costs which have been spiralling out of control.
Key recommendations of the review include:
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- More stringent reporting requirements aimed at reducing the risk of unrealistic budget expectations and poor planning.
- Increasing industry knowledge and awareness of projects to prevent premature biddings. Previously, premature biddings have resulted in unrealistic costs and have priced out effective competition.
- Ensuring project cost allocations are not publicly announced before the market has a chance to competitively tender.
- Plans to enhance how the QTRIP is structured, introducing consistency in contract packaging and commercial models, and better risk management frameworks to help ensure a more robust and cost-effective delivery in the future.
The goal of these recommendations is to cut down on project delays and unexpected costs. This way, the government can deliver more projects on time and budget, and reward contractors who offer the best value for their work.
Key contacts:
