Building and Construction Industry Payments Act 2004 (Qld) (Act), sections 4, 16 and 99 – whether the adjudication decision was void for jurisdictional error – whether a contractual precondition impeded the Act’s objects
This case provides yet another example of an unsuccessful attempt to create a contractual precondition to prevent a contractor making a payment claim under the Act.
BRB Modular Pty Ltd (applicant) engaged AWX Constructions Pty Ltd (first respondent) as a subcontractor to construct a camp and accommodation village at an LNG processing facility. The contract entitled the first respondent to make a progress claim on the 28th day of each month, subject to compliance of a precondition requiring delivery of a statutory declaration in the prescribed form. The prescribed form required a representative of the first respondent to depose that, to the best of their knowledge, all subcontractors it had engaged had been paid.
On 28 January 2015, the first respondent delivered a payment claim together with a statutory declaration that departed from the prescribed form, by deposing that all subcontractors had been paid ‘other than those owed variations, payable by the head contractor’. The payment claim was endorsed under the Act.
The applicant contended that no reference date had arisen under the Act by virtue of the first respondent’s non-compliance with the contractual precondition. The matter proceeded to adjudication. The adjudicator determined that the contract provided for the working out of a reference date and, by section 99 of the Act, the contractual precondition did not affect a reference date from arising.
The applicant sought a declaration that the adjudication decision was void for jurisdictional error.
Applegarth J held that the adjudicator had jurisdiction to determine the first respondent’s payment claim and dismissed the application.
His Honour held that the operation of section 99 of the Act rendered the contractual precondition ineffective to prevent the first respondent from making its payment claim. He found that the contractual precondition had no real utility in advancing the purpose of the Act; it would allow parties to exclude what was otherwise a statutory entitlement to a progress payment in circumstances where the contractor was unable to declare that all of its subcontractors had been paid.