Building and Construction Industry Payments Act 2004 (Qld) – injunction application – policy considerations – balance of convenience
This was an application for an injunction to prevent enforcement of an adjudication decision until proceedings challenging that decision were determined. The application was refused. It was held the policy considerations behind the Building and Construction Industry Payments Act 2004 (Qld) (Act) weighed against the granting of the injunction.
In September 2014, an adjudication decision was made in favour of Earthpro Pty Ltd (respondent).The decision required Sunshine Coast Regional Council (applicant) to pay $1.4 million to the respondent. The applicant brought proceedings challenging the validity of the adjudication decision (proceedings). The applicant sought an injunction preventing the respondent from enforcing the adjudication decision until determination of the proceedings.
The respondent conceded that the applicant had a prima facie case in the proceedings.
The application for an injunction was refused and the applicant was ordered to pay the respondent's costs of the application.
In considering the balance of convenience, P Lyons J noted it was in the applicant's favour that it had paid the adjudicated amount into court pending determination of the proceedings, and that the applicant had sought orders for an early determination of the proceedings.
However, weighing against these factors was the policy behind the Act. His Honour highlighted the legislative intention to maintain cash flow, and that an adjudication decision should be effective until an inconsistent decision is made by a court. It was acknowledged that in some instances an applicant may have such strong prospects of success to justify granting an injunction notwithstanding the policy considerations behind the Act. This case did not fall into that category.
It was also acknowledged that the risk a contractor would be unable to repay an adjudication amount, where the adjudication decision is successfully challenged by the principal, is a relevant consideration in an application for an injunction such as this. However, there would need to be very strong evidence that the respondent would be unable to make such a repayment (there was none in this case) for this consideration to outweigh the policy considerations behind the Act. It is generally considered that, on its face, the Act assigns this risk to the principal.