The State of Queensland Acting through the Department of Transport and Main Roads v Black Cat Civil Pty Ltd & Ors  QSC 5
Adjudicators must ensure their reasons in an adjudication decision reflect a genuine consideration of the contract and the parties’ respective submissions.
Despite an adjudicator reaching a conclusion that may have been wrong and not favoured by a court, such a decision will not be invalid, provided it was made within jurisdiction.
The State of Queensland acting through the Department of Transport and Main Roads (DTMR) entered into a construction contract with Black Cat Civil Pty Ltd (Black Cat) for the upgrade and widening of a section of the Peak Downs Highway.
On 24 February 2022 Black Cat made a claim for additional cost and time it said was the result of encountering near non-rippable rock (NNRR) during excavation works, which Black Cat asserted was a latent condition.
On 3 May 2022 Black Cat served a payment claim on DTMR for about $10 million, which included the claims for the NNRR.
On 17 May 2022 DTMR issued a payment schedule of about $3 million. One of the reasons for the lesser sum proposed by DTMR was its rejection of Black Cat’s claims for NNRR.
Black Cat subsequently lodged an adjudication application in respect of the NNRR claims, including evidence that a competent and experienced contractor would not have reasonably been able to identify the NNRR later encountered.
In its adjudication response, DTMR also submitted its own evidence that if a competent and experienced contractor had used a field guide to determine rock strength during the process of carrying out inspections and investigations of the site, then it could have identified and assessed rock strength and so discovered the presence of NNRR.
The adjudicator preferred Black Cat’s evidence, finding that the NNRR was a physical condition that differed materially and substantially from that which would reasonably have been anticipated by a competent and experienced contractor and, as a result, was a latent condition as defined in the contract.
DTMR asserted that this decision was void for two related reasons:
- the adjudicator did not provide adequate reasons to four of the conclusions stated in the decision, and so each of those conclusions was arbitrary; and
- the adjudicator failed to give the necessary reasons for each of the four conclusions in the way required by s 88(5)(b) of the BIF Act.
Bradley J held that there was a logical basis and intellectual justification for the adjudicator’s conclusion. The adjudicator had not overlooked evidence, but rather had rejected the evidence submitted by DTMR, and preferred the evidence submitted by Black Cat. The reasons in the adjudication decision reflected a genuine consideration of the contract and the parties’ respective submissions.
The adjudicator may have been wrong in his conclusion, but such an error would not invalidate the decision as it was still made within jurisdiction.