Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor
The recent Queensland Court of Appeal decision of Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor [2019] QCA 177
considered, inter alia, whether section 38(4) of the Acts Interpretation Act 1954 (Qld) (AIA) applies to the service of adjudication applications, and if so, whether 12 days after lodgement constitutes service “as soon as possible”.
This involved a consideration of section 21(5) of the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) which provides that a copy of an adjudication application must be served on the respondent but does not specify when it must be served by. Section 21(3)(a) requires the application to be in the approved form.
Key Points
The decision at first instance was upheld, ruling that service of an adjudication application upon a respondent as soon as possible after lodgement of the application is necessary for there to be a valid adjudication decision. If service does not occur as soon as possible, an adjudicator may decline jurisdiction to determine the application.
Background
The appellant (Niclin) was engaged by the respondent (SHA) to design and construct four petrol stations under separate construction contracts. On 28 November 2018, after payment claims and payment schedules were issued under BCIPA, Niclin lodged adjudication applications for each contract with the Queensland Building and Construction Commission (QBCC). Niclin served the applications on SHA on the same day, however in serving the adjudication applications, Niclin failed to serve the adjudication application forms themselves.
SHA submitted in its adjudication response that this service issue was fatal as service of the form is mandatory pursuant to section 21(5) of BCIPA. Niclin served the adjudication application forms on SHA the following day.
Adjudication decisions for three of the four applications were detailed by an adjudicator on 18 January 2019 in which the adjudicator held he did not have jurisdiction to determine the applications because the forms had not been served on SHA. At the time of these decisions, the fourth adjudication had not been considered by an adjudicator.
Niclin made an application to the Queensland Supreme Court contesting the adjudicator’s decisions, seeking that:
- the adjudicator’s decisions be declared void as he did have jurisdiction to determine the applications in the absence of the forms; and
- the three applications be remitted to the adjudicator.
Decision at first instance
The Court held that service of an adjudication application form was necessary under BCIPA to confer jurisdiction to determine the application on an adjudicator. Consequently, the adjudicator had not erred in his decision to decline jurisdiction.
Relevantly, the Court found that whilst BCIPA provides no timeframes for service of an adjudication application, the application must be served in the approved form. This includes the adjudication form which plainly contemplates something close to contemporaneous service of the application on the respondent. Therefore, the Court held that service by Niclin should have been affected as soon as possible after the applications were lodged, and that 12 business days after lodgement was not as soon as possible, particularly in light of the brutally fast timeframes BCIPA imposes. The court held that in light of this failure, the adjudicator was correct to decline jurisdiction.
Niclin appealed the Supreme Court’s decision.
Decision on appeal
The Queensland Court of Appeal considered whether section 38(4) of the AIA applies to section 21(5) of BCIPA so that Niclin was required to serve the adjudication application as soon as possible, and if so, whether service 12 business days after lodgement satisfied this requirement.
The Court held that section 38(4) of the AIA does apply as it would be inconsistent with BCIPA’s purpose of ensuring the expeditious resolution of disputes to impose no timeframe for service of an adjudication application after lodgement. It was held that the absence of timeframes for service in BCIPA does not displace the application of the AIA, and therefore the primary judge was correct in this ruling.
In relation to the second consideration, the Court concurred with the primary judge and held that, when service is possible sooner, 12 business days cannot be said to be as soon as possible. Reference was again made to the purpose of BCIPA to ensure the expeditious determination of adjudication applications to support this conclusion.
The decision at first instance, that the adjudicator was correct to decline jurisdiction due to Niclin’s failure to serve the application form as soon as possible, was therefore upheld.
Effect of decision on future applications
BCIPA has been repealed and replaced by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF ACT). Whilst the requirement for adjudication applications to be in the approved form remains, applications must now be given to the respondent under section 79(3). Despite this subtle difference between the wording of serve and given, it is our view that the principle remains the same.
Moreover, the Court relied upon the purpose of BCIPA, to expeditiously ensure payment to those undertaking building work, to support the application of section 38(4) to the service of adjudication decisions. The BIF Act aligns with this purpose, imposing strict timeframes to ensure payment. The Court’s reasoning can therefore be applied to the BIF Act, meaning that the AIA will apply to the giving of adjudication applications.
Therefore, claimants making adjudication applications under the BIF Act should be aware that:
- they must give a copy of the approved adjudication form, Form S79, with an adjudication application;
- they must give the application on the respondent as soon as possible; and
- whether an application has been given as soon as possible will be determined on a case by cases basis, however it is clear in any event that twelve days to affect service where solicitors act for both parties is considered too long and will be fatal to the application.
If you have any concerns regarding adjudication and the relevant timeframes, contact Aleisha MacKenzie at Construct Law Group on (07) 3139 1874 or email us at info@constructlaw.com.au.
Erin Collins, Paralegal
