26 September 2019

Serve your adjudication application ASAP, or rocky times ahead

This article was written by Scott Watson and Prudence Lupton.

Summary

A recent decision of the Queensland Court of Appeal, Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor [2019] QCA 177, emphasises the importance of complying with the legislative requirement to serve any adjudication application on the respondent ‘as soon as possible’ after lodgement with the Adjudication Registry. 

In upholding both the decision of the adjudicator and the primary judge, the Queensland Court of Appeal determined that service of the complete copy of an adjudication application 12 business days after lodgement with the Adjudication Registry was not ‘as soon as possible’.  Further, the Court held that failure by a claimant to comply with legislative form and time requirements regarding the service of adjudication applications will prevent an adjudicator from having jurisdiction to decide such applications.

The decision

Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor [2019] QCA 177 concerned an appeal against the findings of the primary judge, Ryan J, that:

a)  in the circumstances where section 21(5) the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”)[1] does not provide a specific timeframe for service of an adjudication application on the respondent, it is appropriate to rely upon the Acts Interpretation Act 1954 (Qld) such that service must be ‘as soon as possible’ after the adjudication application was made;

b)  while there is some flexibility in the requirement of ‘as soon as possible’, in the context of the BCIPA which imposes “brutally fast timeframes”, service of the complete copy of an adjudication application 12 business days after lodgement of that application with the Registry is not as soon as possible; and

c)   service of the adjudication application, as required under section 21(5) of the BCIPA, is a precondition before an adjudicator has jurisdiction to decide the application.

Applegarth J, with Gotterson JA and Philippides JA agreeing, upheld the decision of the primary judge.  His Honour found that, given the relevant legislation “provides for the expeditious resolution of disputes over payments”, the primary judge correctly concluded that a requirement to serve the adjudication application on the respondent ‘as soon as possible’ was applicable.

Applegarth J stated that while a “requirement to serve an adjudication application ‘as soon as possible’ imposes a demanding timeframe”, it also “permits regard to be had to the exigencies of service in a particular case.”  His Honour concluded that as a matter of fact, by serving a complete copy of the adjudication applications on the respondent 12 business days after lodgement, Niclin Constructions Pty Ltd did not comply with this timing requirement.  Therefore, in the absence of effective service, the adjudicator did not have jurisdiction to determine the adjudication applications.

Key takeaway

Claimants must ensure that any adjudication application is served on the respondent as soon as possible following lodgement with the Adjudication Registry.  Failure to comply could result in an adjudicator determining there has not been effective service and therefore, that the adjudicator is not seized of jurisdiction to decide the relevant adjudication application.



[1] An equivalent provision is now found in section 79 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld).


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