Karam Group Pty Ltd ATF The Karam (No. 1) Family Trust v Hca Queensland Pty Ltd & Ors

The case of Karam Group Pty Ltd ATF The Karam (No. 1) Family Trust v Hca Queensland Pty Ltd & Ors involved a dispute regarding a payment claim served under a construction contract between Karam Group Pty Ltd and HCA Queensland Pty Ltd. The contract, valued at $38 million excluding GST, pertained to the design and construction of apartments in Coorparoo. The disagreement arose after the first respondent, HCA Queensland Pty Ltd, served a payment claim on Karam, which was subsequently delivered a payment schedule by Karam. The second respondent then made an adjudication decision in respect of the payment claim. Both parties agreed that the adjudication decision was affected by jurisdictional errors but differed on the extent of the errors and the appropriate remedy. Karam sought to set aside the decision in its entirety, while HCA sought to preserve parts of the decision that were not affected by the errors.

The legal issues before the court centered on the extent of the jurisdictional errors in the adjudication decision and the appropriate remedy. The court had to determine whether only a part of the adjudication decision was affected by jurisdictional error and, if so, whether the court should exercise its discretion to preserve the unaffected parts of the decision. The court considered the statutory framework provided by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) and the discretionary power conferred by s 101(4) of the Act, which allows the court to identify and preserve parts of the decision not affected by jurisdictional errors.

The court examined the specific errors in the adjudication decision, including the determination regarding the repayment of liquidated damages, variations to the agreed works, and delay costs. It found that while some parts of the decision were indeed affected by jurisdictional errors, other parts were not. The court exercised its discretion under s 101(4) of the Act and decided to preserve the part of the decision that determined the delay costs for EOT117. The court set aside the remainder of the adjudication decision, which was affected by jurisdictional errors.

The court also made orders concerning the costs of the proceedings and restraining HCA from pursuing certain claims in future adjudication applications. In summary, the court allowed part of the adjudication decision to remain binding while setting aside the rest, and directed that HCA pay the applicant's costs.