Building and Construction Industry Payments Act 2004 (Qld) (Act) – whether the applicant was denied natural justice – whether the payment claim included payments for the supply of goods or for damages for breach of contract – whether the adjudicator erred in the interpretation of the contract – whether such an error is a jurisdictional error – whether the adjudicator was bound by an issue estoppel
This case is an example of a denial of natural justice by the adjudicator who made his decision based on reasons not advanced by either party. It clarifies how the principles of issue estoppel apply to adjudication decisions. It also distinguishes between claims under the Act and claims for damages.
Allstate Access (Australia) Pty Ltd (first respondent) issued payment claims to Caltex Refineries (Qld) Pty Ltd (applicant). The claims went to adjudication, and the adjudicator decided that the applicant should pay the first respondent over $4million.
The applicant challenged the decisions on a number of bases:
- First, a denial of natural justice The payment claim included costs payable for the replacement of damaged scaffolding components. The adjudicator found that the contract expressly entitled the first respondent to claim for damaged equipment in a progress payment, despite the fact that neither party argued that there was such an express term.
- Secondly, a jurisdictional error The applicant argued there was a jurisdictional error because the claim for costs payable for damaged equipment was a claim for damages which could not be included in any payment claim.
The first respondent argued there was an issue estoppel in relation to the jurisdiction argument raised by the applicant, as a similar argument had been advanced in a previous adjudication between the parties.
The adjudicator's decision was declared of no effect.
The applicant was denied natural justice as it could not have anticipated that the adjudicator would reach his conclusion based on an argument not advanced by either party.
Although P McMurdo J agreed that the claim was for damages, His Honour found that this was a misinterpretation of the contract, rather than a jurisdictional error.
Issue estoppel did not apply in this case because the 'matters fundamental...to the prior decision' differed from the reasoning in the adjudication decision under consideration.
Issue estoppel in relation to an adjudication decision is limited to preventing a claimant from pursuing a progress payment inconsistently with the determination of an issue by an adjudicator which was fundamental to that decision.