Lendlease Building Pty Ltd v BCF Airport Systems Pty Ltd & Ors - [2024] QSC 164

SUPREME COURT OF QUEENSLAND

CITATION: Lendlease Building Pty Ltd v BCS Airport Systems Pty Ltd &
Ors [2024] QSC 164
PARTIES: LENDLEASE BUILDING PTY LTD
(plaintiff)
v
BCS AIRPORT SYSTEMS PTY LTD
(first defendant)
AND
JOHN TUHTAN
(second defendant)
AND
REGISTRAR APPOINTED UNDER S 150 OF THE
BUILDING INDUSTRY FAIRNESS (SECURITY OF
PAYMENT) ACT 2017 (QLD)
(third defendant)
FILE NO: 2108 of 2023
DIVISION: Trial Division
PROCEEDING: Trial
ORIGINATING Supreme Court at Brisbane
COURT:
DELIVERED ON: 30 July 2024
DELIVERED AT: Brisbane
HEARING DATE: 12 and 13 June 2023
JUDGE: Sullivan J
ORDER: The application is dismissed.
CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND
RELATED CONTRACTS – REMUNERATION –
STATUTORY REGULATION OF ENTITLEMENT TO
AND RECOVERY OF PROGRESS PAYMENTS – PAYMENT CLAIMS – where the plaintiff was the principal
contractor under a head contract for construction work to be
performed at the Gold Coast Airport – where the plaintiff entered into a sub-contract with the first defendant – where the
first defendant delivered a payment claim to the plaintiff in the
amount of $1,215,733.23 – where an adjudication decision was
made in respect of the sub-contract in the amount of
$995,081.18 – where the plaintiff seeks a declaration that the adjudication decision is void – whether such a declaration
ought to be made
ADMINISTATIVE LAW – JUDICIAL REVIEW –
GROUNDS OF REVIEW – JURISIDCITIONAL MATTERS
– where an adjudication decision in the amount of $995,081.18
was made under the Building Industry Fairness (Security of
Payment) Act 2017 (Qld) – where the border between
Queensland and New South Wales runs through the
construction work to be performed – where the plaintiff asserts
that s 61(4) excludes from the operation of the Act construction
work carried out outside of Queensland – whether the proper
construction of s 61(4) of the Act gives rise to a jurisdictional
fact – whether a payment claim in a cross-border project must
reasonably identify the location of the construction work
ADMINISTRATIVE LAW – JUDICIAL REVIEW –
GROUNDS OF REVIEW – PROCEDURAL FAIRNESS –
where the plaintiff submits that a failure by the adjudicator to consider submissions was a breach of natural justice in the
decision-making process – whether the adjudicator failed to consider the submissions – whether any such failure was
material
ADMINISTRATIVE LAW – JUDICIAL REVIEW –

REVIEWABLE DECISIONS AND
CONDUCT – DISTINCTION BETWEEN ADMINISTRATIVE AND JUDICIAL FUNCTIONS – where
the land upon which the Gold Coast Airport is sited is regulated under the Commonwealth Places (Application of Laws) Act 1970 (Cth) - whether the adjudicator was exercising judicial
power within the meaning of s 4 of that Act
Accident Compensation Act 1985 (Vic), s 85
Acts Interpretation Act 1954 (Qld), s 27(b)
Building and Construction Industry Security of Payment Act
1999 (NSW), s 7(3), s 13, s 32
Building Industry Fairness (Security of Payment) Act 2017
(Qld), s 3, s 61, s 64, s 65, s 66, s 68, s 70, s 75, s 91 ,s 92, s 4
s 93, s 98, s 99, s 100, s 101
Commonwealth of Australia Constitution Act, s 71
Acciona Agua Australia Pty Ltd v Monadelphous
Engineering Pty Ltd (2020) 4 Qd R 410
Acciona Infrastructure Australia Pty Ltd v
Holcim (Australia) Pty Ltd [2020] NSWSC 1330
Allianz Australia Insurance Limited v Probuild Constructions
(Aust) Pty Ltd [2023] NSWCA 56
Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty
Ltd (2015) 297 FLR 203
Attorney-General (Cth) v Alinta Limited (2008) 233 CLR 542
Attorney-General (Commonwealth) v Breckler (1999) 197
CLR 83
Attorney-General (NSW) v 2UE Sydney Pty Ltd (2006) 226
FLR 62
Avopiling (NSW) Pty Ltd v Menard Bachy Pty Ltd [2012]
NSWSC 1466
Barrett v TCN Channel Nine Pty Ltd (2019) 96 NSWLR 478
Birdon Pty Ltd v Houben Marine Pty Ltd & Ors (2011) 197
FCR 25
Brandy v Human Rights and Equal Opportunity Commission
and Ors (1995) 183 CLR 245
Brodyn Pty Ltd v Davenport [2004] 61 NSWLR 41
BSA Advanced Property Solutions (Fire) Pty Ltd v Ventia
Australia Pty Ltd (2022) 108 NSWLR 350
Carnation Australia Pty Ltd v Commissioner of Stamp Duties
[1994] 2 Qd R 366
Casey v DePuy International Ltd [2023] FCA 254
Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR
225
Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010]
NSWCA 190
Chu Kheng Lim v Minister for Immigration, Local
Government and Ethnic Affairs (1992) 176 CLR 1
Citta Hobart Pty Ltd v Cawthorn (2022) 96 ALJR 476
Cockram Construction Ltd v Fulton Hogan Construction Pty
Ltd & Anor (2018) 97 NSWLR 773
Commonwealth v Anti-Discrimination Tribunal (Tasmania)
and Anor (2008) FCR 85
Coordinated Construction Co Pty Ltd v J M Hargreaves
(NSW) Pty Ltd & Ors (2005) 63 NSWLR 385
Dranichnikov v Minister for Immigration and Multicultural
Affairs (2003) 197 ALR 389
Equa Building Services Pty Ltd v A&H Floors 2 Doors
Australia Pty Ltd [2022] NSWSC 152
Forte Sydney Carlingford Pty Ltd v Li [2022] FCA 1499
Goodwin Street Developments Pty Ltd v DSD Builders Pty
Ltd (2018) 98 NSWLR 712
Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd
[2022] 183 ACTLR 245
Ibarran v Members of the Companies Auditors and
Liquidators Disciplinary Board (2007) 231 CLR 350
John Holland v TAC Pacific Pty Ltd [2010] 1 Qd R 302
KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd &
Ors [2019] QSC 178
Luton v Lessels (2002) 210 CLR 333
Malek Fahd Islamic School Limited v Minister for Education
and Training (No 2) [2017] FCA 1377
McNab Building Services Pty Ltd v Demex Pty Ltd (No 2)
[2022] NSWSC 1496
Ming Tian Real Property Pty Ltd v SGS Platinum Pty Ltd
(2020) 145 ACSR 329
Mok v Director of Public Prosecutions of the State of New
South Wales (2016) 257 CLR 402
MWB Everton Park Pty Ltd (as trustee for MWB Everton
Park Unit Trust) v Devcon Building Co Pty Ltd [2024] QCA
94
MZAPC v Minister for Immigration and Border Protection
(2021) 95 ALJR 441
Niclin Constructions Pty Ltd v Robotic Steel Fab Pty Ltd &
Anor [2023] QSC 218
Northbuild Construction P/L v Central Interior Linings P/L
& Ors [2011] QCA 22
Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd &
Anor [2011] NSWSC 165
Plaintiff M1/2021 v Minister for Home Affairs (2022) 96
ALJR 497
Precision Data Holdings Ltd & Ors v Wills & Ors (1991) 173
CLR 167
Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd
(2017) 95 NSWLR 82
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty
Ltd & Anor (2018) 264 CLR 1
Project Blue Sky v Australia Broadcasting Authority (1998)
194 CLR 355
Public Service Association of South Australia Incorporated v
Industrial Relations Commission of South Australia & Anor
(2012) 249 CLR 398
R v Trade Practices Tribunal; Ex parte Tasmanian Breweries
Pty Ltd (1970) 123 CLR 361
Reg v Hegarty; Ex Parte City of Salisbury (1981) 147 CLR
617
S.H.A Premier Constructions Pty Ltd v Niclin Constructions
Pty Ltd [2020] QSC 307
Southern Han Breakfast Point Pty Ltd (in liq) v Lewence
Construction Pty Ltd & Ors (2016) 260 CLR 340
State of Queensland v Epoca Constructions Pty Ltd & Anor
[2006] QSC 324
T & M Buckley Pty Ltd v 57 Moss Rd Pty Ltd [2010] QCA
381
Thiess Pty Ltd v Warren Brothers Earthmoving Pty
Ltd [2013] 2 Qd R 75
Wiggins Island Coal Export Terminal Pty Ltd v
Monadelphous Engineering Pty Ltd & Ors [2015] QSC 307

COUNSEL: P Franco KC and D Hume for the plaintiff
G Beacham KC and D Byrne for the first defendant
GJ Del Villar KC S-G and FJ Nagorcka for the Attorney-
General (Qld)
SOLICITORS: Baker McKenzie for the plaintiff
Holding Redlich for the first defendant
Crown Law for the Attorney-General (Qld)
Introduction

This proceeding has been brought by Lendlease Building Pty Ltd (“Lendlease”).
Lendlease seeks a declaration that an adjudication decision issued on 6 December 2022 in the amount of $995,081.18 (inclusive of GST) be declared void, at least in part.
Lendlease was the principal contractor under a head contract for construction work which was to be performed at the Gold Coast Airport.
Lendlease entered into a sub-contract with the first defendant, BCS Airport Systems
Pty Ltd (“BCS”). BCS is referred to in the relevant sub-contract as the sub-contractor.
The adjudication decision is made in respect of the sub-contract between Lendlease and BCS. For the purpose of clarity, I will refer to the sub-contract in these reasons
simply as “the contract”.
The issues in this proceeding centre around two unusual circumstances. The first is that the border between Queensland and New South Wales runs both through the Gold Coast Airport and, more particularly, the area where the construction work under the contract was to be performed by BCS.
The second issue is that the land upon which the Gold Coast Airport is sited is a
designated “Commonwealth Place” and is regulated under the Commonwealth Places
(Application of Laws) Act 1970 (Cth) (“CPAL Act”). In the context of those
circumstances, the issues in this proceeding can be summarised in the following ways.
First, what is the proper construction of s 61(4) of the Building Industry Fairness
(Security of Payment) Act 2017 (Qld) (“BIF Act”)? This question involves a
consideration of how that section excludes from the operation of the BIF Act construction work which is carried out outside of Queensland. It involves the further question of whether the proper construction gives rise to a jurisdictional fact, and what any such jurisdictional fact consequently requires to be established in order to preclude the operation of the BIF Act.
Secondly, does the BIF Act require a payment claim in a cross-border project to purport in a reasonable way to identify the location of the construction work? If so, did the payment claim in issue here purport in a reasonable way to identify the location of the work the subject of VPR23?
Thirdly, does a component claim known as VPR23 fall outside the operation of the BIF Act by reason of s 61(4)? VPR23 formed the large part of the sum awarded in the adjudication decision in favour of BCS. Broadly speaking, VPR23 is a delay damages claim made pursuant to cl 19 of the contract.
Fourthly, did the adjudicator in the present case fail to consider Lendlease’s
submissions on the operation of s 4 of the CPAL Act and s 61(4) of the BIF Act? If so, was any such failure material, including, if relevant, in light of the findings of the Court on the previous issues? This particular issue was couched as a failure to provide Lendlease with natural justice in the decision-making process.
Fifthly, in determining the application, was the adjudicator exercising “judicial power” within the meaning of the CPAL Act? On this issue only, the Solicitor- General for the State of Queensland (“SQ”), participated in the proceeding and made
specific submissions.
In respect of the last issue, each of the parties and SQ submitted that the Court ought not to express a view on the issue if the application could otherwise be fully resolved by reference to the earlier issues. I will abide by the request of the parties and the SQ.
Before turning to any of the issues, it is appropriate to set out the relevant background facts.
Contract and background facts
The contract between Lendlease and BCS is dated 3 July 2019. It was for the design and construction of certain baggage handling works at the Gold Coast Airport.
As with most contracts involving significant construction tasks, the contract itself has a variety of constituent parts. In this case, there is a head page, a Formal Instrument of Agreement, a set of standard terms, an appendix, schedules and a series of annexures. In summarising the contract below, I will make reference to various of those constituent parts.
The head page of the contract provided relevantly as follows:
“MAJOR WORKS SUBCONTRACT
PROJECT: Gold Coast Airport - Southern Terminal Expansion -
Project Lift
SITE ADDRESS: East Avenue, Bilinga
…
SUBCONTRACTOR: BCS Airport Systems Pty Ltd
…
WORKS: Baggage Handling Systems
…
ANNEXURES
Annexure A: Subcontract Sum
…
Annexure D: Drawings
Annexure E: Scope of Work
…
Annexure G: Special Conditions
…”
The site address given is one which is within Queensland, and the project is referred to as the Gold Coast Airport, but as stated above, it is uncontentious in this proceeding that part of the construction works which were to be performed were sited in New South Wales.
The Formal Instrument of Agreement defined Lendlease by that descriptor, but
described BCS as the “sub-contractor” for the purposes of the contract.
The standard terms of the contract were, in part, amended by certain other special conditions contained in Annexure G. For the purposes of continuity, when I set out the standard terms below, I have simply incorporated those amendments contained in Annexure G and footnoted the special condition clause in which the amendment appears. With that qualification, the standard terms of the contract relevantly provided as follows:
“SUBCONTRACT CONDITIONS
…
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In the Subcontract, unless the context requires otherwise:
…
Drawings - the drawings and other documents identified in Annexure
D: Drawings.
…
Subcontract Sum - the amount stated in the Appendix, as may be further described in Annexure A: Subcontract Sum, or such other sum or sums as may become payable under the Subcontract.
…
Works - the whole of the work to be executed in accordance with the Subcontract by the Subcontractor, including Variations provided for by the Subcontract, which is to be handed over to Lendlease.
WUC (‘work under contract’) - the work which the Subcontractor is
or may be required to carry out and complete under the Subcontract
and includes Variations, remedial work, Plant and temporary works.
…
15. MATERIAL AND WORKS
15.1 Quality of Materials, WUC and work
…

(b)

The Subcontractor must perform WUC and complete the Works in accordance with:

(i)

Annexure C: Drawings Annexure D: Scope of Work and Annexure E: Specification;[1]

(ii)

any directions of Lendlease, including directions to perform any Variation; and
[1]            I note that this sub-clause misdescribes the lettering adopted for the Annexure; nothing turns on this.
(iii) all other requirements of the Subcontract.

…
19. TIME
…
19.3 Entitlement to extension of time

(a) If the Subcontractor satisfies Clause 19.3 and demonstrates to
Lendlease’s satisfaction that:

(i) Substantial Completion will be delayed by an event referred to in the Appendix;
(ii) to the extent the delay occurs on or before the Date for Substantial Completion, the delay affects activities which are critical to achieving Substantial Completion by the Date for Substantial Completion; and
(iii) if the delay has more than one cause, each of the causes is an event of the type referred to in Clause 19.3(a)(i).
subject to Clause 19.5, Lendlease must extend the Date for Substantial Completion by the number of days by which, as a result of the delay, the Subcontractor will be delayed in achieving Substantial Completion.
…
(6) Where the Subcontractor is granted an extension of time pursuant to clause 19.3(a), the Subcontract will be entitled to be paid (as an adjustment to the Subcontract Sum) the reasonable additional direct costs determined by Lendlease (acting reasonably) that the Consultant has reasonably and necessarily incurred due to, and arising directly from, the relevant delay, provided that:

(a) the Subcontract must claim such costs in compliance with clause
19.2;
(b) such costs must not include any off-site overheads;

(c) such costs have not been, and will not be, paid under any other
express provision of this Agreement; and

(d) the Subcontractor’s entitlement to claim for such costs is capped
at the daily rate specified in the Appendix.
For clarity, the parties agree that delay and disruption costs arising from a Variation (if any) are deemed to be included in the value of
the Variation determined under clause 21.5. The Subcontractor will have no claim with respect to, or in connection with, any delay or cause of delay, other than as set out in this clause 19.3.[2]
[2]            Clause 19.3(b) was amended by Special Condition 15.1 in the form of the underlining.

…
19.8 Sole remedy
The Subcontractor’s entitlement to an extension to the Date for
Substantial Completion under Clause Error![3] Reference source not found (a) and delay costs under clause 19.3(b) are the
[3]            This error appears in the contract; nothing turns on it.
Subcontractor’s sole remedy for any delay or disruption in the
execution of WUC, whether caused by an act or omission of Lendlease (including any suspension of WUC or change to workings hours directed by Lendlease under Subcontract), a breach of the Subcontract by Lendlease, negligence or other default of Lendlease, or howsoever otherwise caused.
Subject to Clause 4(c) and Clause 4(d) of Schedule F: Programming Requirements, the Subcontractor accepts the risk of all increased costs and other Losses resulting from any delay or disruption in the execution of WUC.[4]
[4]            Clause 19.8 was amended by Special Condition 15.2 in the form of the underlining.
…
22.    MEASUREMENT, PAYMENT AND ADJUSTMENT OF
THE SUBCONTRACT SUM

…
22.2 Payment claims
…

(c) A payment claim must show:

(i) the Subcontract value of WUC completed (excluding Variations, but allowing for Variation omissions), valued in accordance with Clauses 22.3 and 22.4;
(ii) the value of work completed on Variations, valued in accordance with Clause 21.5;
(iii) the total amount determined under Clauses 22.2(c)(i) and 22.2(c)(ii), less the amount previously paid to the Subcontractor; and
(iv) any other amounts to which the Subcontractor is then entitled under the Subcontract.
…”

The contract then contained an appendix, which was to be read with the standard terms. That appendix relevantly provided as follows:
“APPENDIX
Subcontract Conditions

Clause Term Particulars
…

1.1 Date for Practical Head Contract Project Dates for
Completion Practical Completion are
Separable Portion 1 - 18/3/2021
Separable Portion 2 - 20/5/2021
…

1.1 Stage(s)

Separable Portion 1 (SP1)- comprising all WUC necessary for GCA to commence ORAT and otherwise operate the new baggage handling system installation, new baggage handling room mezzanines and baggage handling HLC upgrade, and all other WUC not described in SP2 in relation to the Baggage handling works.

Separable Portion 2 (SP2)- comprises BHS Separable Portions 2&3 and final validation and completion of the baggage handling HLC upgrade as described in the

AvLogix BHS performance

Specification (Tender Issue

19/07/2018); generally being those WUC relating to the baggage handling system that are to be conducted in the existing baggage hall.
…

1.1 Subcontract Sum

The lump sum of Six million three hundred and fifty nine thousand dollars ($6,359,889.00) including provisional sums of $0 for that part of the Works referred to in Annexure A: Subcontract Sum.
…
19.3(a)(i) Events which entitle
an extension of time … Any:
Delay by Lendlease in providing access to the Subcontractor to the
Site; or…”

The contract then included schedules. Schedule D set out the design requirements as follows:
“SCHEDULE D: DESIGN REQUIREMENTS
1. Design by the Subcontractor

(a)

The Subcontractor must, without limitation, design and document the Works in accordance with the requirements of the Subcontract (the Design).

(b) The Subcontractor must ensure that the Design complies with:
(i) Annexure D: Drawings;
(ii) Annexure E: Scope of Work;
(iii) Annexure F: Specification; and
(iv) Program of Works - GCA STE - Overall Target Schedule (Status 26.04.19)

which documents outline Lendlease’s requirements for the design of
the Works (Lendlease’s Design Requirements).”

It can be seen that Schedule 3 required the design for the ultimate works to be in accordance with the Annexure D Drawings, the Annexure E Scope of Work and the Annexure F Specifications, so as to meet an identified contractual program.
The next documents were the annexures.
Annexure A broke up the contract price in accordance with 10 listed items. It can be
observed that the bulk of the contract price lay in what was defined as ‘Severable
Portion 1’, made up of Item Groups 1 to 8. Annexure A relevantly provided as
follows:

Item Description Price
1 Preliminaries (Site establishments, amenities, site
sheds, hoarding, Permits, Survey etc.) & Project
Management Costs

1.1 Project Setup $41,637.00

1.2 Project and Site management (incl program integration $690,528.00
allowance)

1.3 All Certifications (Structural, Mechanical, Electrical, $35,689.00
Services etc.)

1.4 Training and Manuals $17,845.00

1.5 Removal of redundant equipment / Demolition $17,845.00

1.6 Spare Parts $35,689.00

1.7 Provide Fully enclosed cable tray $13,700.00
2 New STE Sortation Line & Modifications required to
existing Sort lines

2.1 Design $23,198.00

2.2 Mechanical $378,901.00

2.3 Electrical $278,376.00

2.4 Controls Software (PLC/MDS) $54,129.00

2.5 FAT/SAT Testing & Commissioning $38,663.00
3 Interchange Area

3.1 Design $26,767.00

3.2 Mechanical $401,504.00

3.3 Electrical $285,513.00

3.4 Controls Software (PLC/MDS) $44,612.00

3.5 Catwalk/BHS Supporting Structure $89,223.00

3.6 FAT/SAT Testing & Commissioning $44,612.00

3.7 Start stop controls on crossovers $23,025.00
4 New Make-Up Carousels (Incl Feed Lines)

4.1 Design $19,629.00

4.2 Mechanical $314,065.00

4.3 Electrical $235,549.00

4.4 Controls Software (PLC/MDS) $52,344.00

4.5 FAT/SAT Testing & Commissioning $32,716.00

4.6 Other (anti fatigue matting) $14,625.00
5 New Reclaim Carousels (Incl Feed Lines)

5.1 Design $35,689.00

5.2 Mechanical $582,924.00

5.3 Electrical $428,271.00

5.4 Controls Software (PLC/MDS) $83,275.00

5.5 FAT/SAT Testing & Commissioning $59,482.00

5.6 Allowance for roller doors existing southern precast wall- $16,429.00
interchange area - std roller shutters

5.7 Changes to merge point and carousel layout of reclaim 4 $15,058.00
6 Out of Gauge (OOG) reclaim operations

6.1 Design $1,784.00

6.2 Mechanical $29,146.00

6.3 Electrical $21,414.00

6.4 Controls Software (PLC/MDS) $4,164.00

6.5 FAT/SAT Testing & Commissioning $2,974.00
7 Installation of steel platform for BHS mezzanine in new
bag hall.

7.1 Design $30,336.00

7.2 Steelwork Supply $616,829.00

7.3 Installation $364,030.00

7.4 Additional cost for the mezzanine as per AvLogix $282,927.00
drawings

8 HCL Upgrade

8.1 Preliminaries $38,663.00

8.2 HLC Software Supply (incl Sym 3 product tracking) $39,226.00

8.3 Hardware $65,430.00

8.5 PLC -> HLC Messaging Upgrade $83,275.00

8.6 FAT/SAT Testing & Commissioning $56,508.00

8.7 CBS Verification Testing $29,741.00

8.8 OEM versions of MS Server 2016 and SQL Server 2016 $25,853.00
licenses

8.9 Modification to existing control systems $21,941.00

SEPARABLE PORTION 1 (SP1) TOTAL $6,145,753.00

9 Specification SP 2 - Design and Installation of a new
recirculation line from the existing sort line feeding
Make-up carousels 1, 2 and 3. Ref Section 4.9

9.1 Design $7,733.00

9.2 Mechanical $54,129.00

9.3 Electrical $40,210.00

9.4 Controls Software (PLC/MDS) $7,733.00

9.5 Catwalk/BHS Supporting Structure $37,117.00

9.6 FAT/SAT Testing & Commissioning $7,731.00
10 Specification SP 3 - Modifications to Makeup 1
Carousel for Vehicle Circulation

10.1 Design $2,974.00

10.2 Mechanical $19,034.00

10.3 Electrical $14,871.00

10.4 Controls Software (PLC/MDS) $4,759.00

10.5 Catwalk/BHS Supporting Structure $14,871.00

10.6 FAT/SAT Testing & Commissioning $2,974.00

SEPARABLE PORTION 2 (SP2) TOTAL $214,136.00

TOTAL SUBCONTRACT SUM $6,359,889.00

In the case of Annexure D, it listed out, and thereby incorporated into the contract, a large series of drawings. The full drawings themselves were not in evidence before me. Whilst some of the affidavits reproduced certain drawings, the evidence generally did not identify if they were from Annexure D or if they had been produced as part of the design and construct obligation which BCS had under the contract.
In the case of Annexure E, it provided as follows:
“Annexure E: Scope of Work…”
…
“SCOPE OF WORKS - BHS
…
3.0 WORKS
…
3.3 Trade specific requirements
The Works includes:
3.    Design and installation of a new sortation loop to allow sortation to an expanded make-up hall.
4.    Design and installation of three (3) new makeup carousels 4, 5 and 6.
5. Design and installation of three (3) new reclaim carousels.
6.    Design and installation of two (2) new reclaim breakdown feed lines for 2 of the new reclaim carousels for swing operators.
7.    Segregation of the International and Domestic Operations where necessary including remote inbound baggage breakdown conveyors feeding new makeup carousels where indicated.
8.    Design and installation of steel platform for BHS mezzanine in the existing bag hall.
9.    Design of steel platform for BH mezzanine in the new bag hall.
10. Design and installation of OOG international reclaim conveyor.
11. Design and installation of OOG Domestic reclaim conveyor.
12. Design and installation of a new recirculation line for the new sort loop.
13. Design of new early baggage storage (EBS) facility above the new bag make-up hall

…”

The item breakup in Annexure A can be better understood by reference to a coloured drawing which was produced after the formation of the contract. It helpfully identifies where certain of the items contained in Annexure A are situated, including by reference to the Queensland and New South Wales border. It does this by use of both colours and descriptions which are linked to certain items. By reference to that drawing, the following locations can be identified:

(a) Item 2 of Annexure A is the grey coloured item in the centre of the drawing, labelled New Sortation Loop (CB Line);
(b) Item 4 of Annexure A are the three carousels coloured red, then blue, then red, with each of their feed lines coloured blue, located in the bottom right quarter of the drawing and labelled Make Up Carousels 4, 5 and 6 with their feed lines labelled Lines 4, 5 and 6;
(c) Item 5 of Annexure A are the three carousels coloured red, then green and then red, with their two feed lines coloured yellow and then green in the top third and the far right side of the drawing, labelled Reclaim Carousels 4, 5 and 6 and Reclaim 4 and 5 Feed Lines;
(d) Item 6 of Annexure A is the Out of Gauge Lines 1 and 2, with Out of Gauge Line 1 (international) being on the far right top quarter of the drawing in the form of a straight red coloured vertical line and Out of Gauge Line 2 (domestic) being on the far left of the top quarter of the drawing, in the form of a straight green coloured vertical line;
(e) Item 9 of Annexure A is located solely in Queensland,[5] and includes, at the least, the green coloured recirculation line located in the centre left of the diagram labelled Recirculation Line 01; and
(f) Item 10 of Annexure A is not clearly identified on the document other than it was in the vicinity of the existing Make Up Carousel 1, which is uncoloured and appears just left of the centre of the drawing with the label Make Up Carousel 1.
[5] This fact was uncontentious.

Having identified the broad location of items, it can relevantly be observed that the diagonal dotted line moving from the bottom left to the top right of the drawing is the Queensland and New South Wales border.
The drawing, together with the breakdown of the Item Groups contained in Annexure A, illustrate that some of the construction work that was to be undertaken was to occur in respect of structures which were:

(a) wholly in Queensland;
(b) partly in Queensland and partly in New South Wales; and
(c) wholly in New South Wales.

On 22 July 2022, the relevant payment claim was delivered by BCS to Lendlease. It
included a front sheet which in part provided as follows:

Subcontractor Claim

Totals

Original Subcontract Works (refer Schedule 1)	$ 6,359,889.00
Variations	$ 1,478,494.61
Total Claimed / Assessed to Date	$ 7,838,383.61
Less Retention (refer Schedule 4)	$ -
Less previously certified to be paid	$ (6,733,171.58)
Nett Total Claimed / Assessed	$ 1,105,212.03
Plus GST @ 10%	$ 110,521.20
Total for this period (inc GST)	$ 1,215,733.23
Claimed Amount (inc GST)	$ 1,215,733.23
Scheduled Amount (inc GST)

One of the documents which formed part of the payment claim was a detailed schedule. That schedule, in part, broke down part of the amount claimed by reference to each of the items and sub-items described in Annexure A to the contract. Most of those items and sub-items had previously been certified and allowed for in full, but there was a small additional amount claimed for certain portions of sub-items, amounting to approximately $54,000.
More importantly, there was also a second detailed schedule which broke down the rest of the amount claimed in the payment claim by reference to what were described as variations. Again, many of those variations had already been approved and paid in full. Relevantly, there were four purported variations which did not fall within this class. It was these four which are relevant to the current proceeding. They are VPR22, VPR23, VPR24 and VPR25. I have reproduced from that schedule the details for only those four variations as follows:
Payment Claim
Schedule 2: Variations

Subcontractor: BCS Airport Systems Pty Ltd Project: GC Airport - STE
Payment Claim No.: 35 P/O No.: 261207-43171.02 (10040119094)

S/C Lend Subcontractor Claim Comments

Ref: lease Description Submitted Claimed Claimed Amount
Ref: Claim [$] [A] [%] [B] [$] [C] = [A] x [B]

VPR022 SL01 PLC Upgrade (See also Aconex $18,245.00 100% $18,245.00 Submitted
Ref BCSAS-GCOR-001124 dated 18

S/C Lend Subcontractor Claim Comments

Ref: lease Description Submitted Claimed Claimed Amount
Ref: Claim [$] [A] [%] [B] [$] [C] = [A] x [B]
February 2022 including attachment Project Variation Form Ref VPR022 - copies of which are attached to this
payment claim)

VPR023 Delay Damages Claim dated 20 May $832,480.73 100% $832,480.73 Submitted

PDF[A] - particulars are set out in
Schedule 3 of this payment claim (See
also Aconex ref BCSAS-GCOR-
001219 dated 20 May 2022 including
attachment and document named
BCS-BH-NOT-ETR-00-004-PDF-A -
2022 ref BCS-BH-NOT-ETR-00-004- which are attached to this payment
claim)
VPR024 Make up loop 04 damage repair (See $81,370.00 100% $81,370.00 Submitted
also Aconex Ref BCSAS-GCOR-
001228 dated 27 May 2022 including
attachment ref VPR024 MU04
carousel repair - copies of which are
attached to this payment claim)
VPR025 Installation of additional E-stops (See $58,866.95 100% $58,866.95 Submitted
also Aconex ref BCSAS-GCOR-
001241 dated 3 June 2022 including
attachment VPR025 - Installation of
additional E stops - copies of which
are attached to this payment claim)
[32] The payment claim also contained certain material which provided further information in respect of those four purported variations.

In relation to VPR24, the attached material identified that the variation was for rectification of damage which had occurred to Make Up Loop 4. Whilst Make Up Loop 4 was predominantly in New South Wales, a portion was within Queensland. The attached material did not identify in which State the rectification work was carried out.
In relation to VPR25, the attached material identified that the work constituted the installation of what are known as E Stops or Emergency Stops. It was uncontentious that some of that installation work was carried out in Queensland and some was carried out in New South Wales.
As previously identified, VPR23 was not in truth a variation but was rather a delay damages claim made pursuant to cl 19 of the contract. In relation to VPR23, the original claim for delay damages was attached. That document was dated 20 May 2022 and gave particulars of the claim for delay as follows:

(a)

Project Management: additional hours required to cover for the delay of the BHS works schedule from 7 December 2021 to 13 May 2022 inclusive;

(b)

Other project costs: additional costs required to cover for the delay the BHS works schedule from 7 December 2021 to 13 May 2022 inclusive;

(c)

Storage: additional storage required to cover for the delay of the BHS works schedule from 7 December 2021 to 13 May 2022 inclusive;

(d)

Disruption of two installation works: additional costs incurred due to ongoing disruptions, equipment, location and staged installation works;

(e)

Equipment warranty extensions: additional costs incurred as a result of extended equipment warranties an additional 12 months; and

(f)

Exclusions (items not included): any contract labour, accommodation or car travel for the BHSWUC after 13 May 2022 for either the project manager, LLC engineer and site manager.

That claim was initially priced at $966,895. In the attached material, it was shown as having been subsequently reduced to $832,481. That amount was calculated as follows:

Claim for delay damages Ref BCS-BH-NOT-ETR-00-004-PDF-A

Cost/unit Margin Total

Project Management Labour

Project Manager	154,575	0%	154,575.00
Site Manager	87,120	0%	87,120.00
LLC Engineer	22,457	0%	22,457.00

Sub-Total 264,152.00

Other Project Costs

Car Travel	18,491	10%	20,340
Accommodation	44,000	10%	48,400
Bank Guarantees	2,400	0%	2,400

Sub-Total 71,140

Storage Costs

GCA Site Storage	8,212.00	10%	9,033
Subcontractor costs
Subcontractor - Mechanical Fitter	144,704	0%	144,704
Subcontractor - Electrician	46,592	0%	46,592

Sub-Total 191,296

Equipment Defect Liability Period Extension

Equipment Warranty Extension

269,872

10%

296,860

Total Cost

Total 832,481

The payment claim also attached a schedule which itemised the hours of work and rates for the project manager, site manager, LLC engineer, mechanical fitter and electrician referred to in the above calculations, together with a spreadsheet identifying individual hours for individual dates for each of the project manager, site manager and LLC engineer. A load factor was then applied to the LLC engineer,
mechanical fitter and electrician’s total hours worked during the period. In the case
of the LLC engineer, it was a 25 per cent load factor, so that only a quarter of his or her time formed part of the claim. In relation to the mechanical fitter and electrician, a load factor of 50 per cent was applied, so only half of their total time formed part of the claim. The material did not provide an explanation for the load factors.
On 5 August 2022, Lendlease served a payment schedule on BCS. That payment schedule accepted that an amount of $59,282.80 was certified and payable, in respect of the total $1,215,733.23 which had been claimed. The payment schedule provided, in part, as follows:

Totals	Subcontractor	Lendlease
Claim	Assessment

Original Subcontract Works (refer Sch 1)

6,359,889.00

$ 6,349,925.50

Variations (refer Schedule 2)	$ 1,478,494.61	$ 437,139.60
Set-Offs (refer Schedule 3)	$ -	$ -
Total Claimed / Assessed to Date	$ 7,838,383.61	$ 6,787,065.10
Less Retention (refer Schedule 4)	$ (31,909.60)
Less previously certified to be paid	$ (6,733,171.58)	$ (6,701,261.98)
Nett Total Claimed / Assessed	$ 1,105,212.03	$ 53,893.52
Plus GST @ 10%	$ 110,521.20	$ 5,389.35
Total for this period (inc GST)	$ 1,215,733.23	$ 59,282.87
Claimed Amount (inc GST)	$ 1,215,733.23
Scheduled Amount (inc GST)	$ 59,282.87

It also contained a similar schedule to the two schedules which had formed part of the payment claim. The first part of the schedule dealt with Annexure A items individually. Most, but not all, of the claims for Items 1 to 10 of Annexure A were allowed. No part of the dispute concerning the adjudication decision involves how those items were dealt with by the parties. Accordingly, I have not reproduced this Schedule.
The relevant part of the schedule for the purposes of this proceeding concerns the purported variations. For the purposes of this proceeding, I have extracted from the schedule only information relating to VPR22, VPR23, VPR24 and VPR25, and then only certain of columns which appeared for each such variation.

S/C

Lend

Description

Subcontractor

Lendlease Assessment

Ref:

lease

Claim

Ref:

Submitted

Value

Previously

This Claim

Variance [$]

Reasons why the value

Claim [$] [A] Assessed Assessed Assessed Value Value [$] [G]= assessed is less / different
[$] [%] [$] [F]-[C] than the claimed amount
[F]=[D]x[E]

VPR022	PLC Upgrade	$18,245.00	$ -	0%	$ -	$ -	$(18,245.00)	Rejected - deemed part of
the scope of works
Relocation of	$ -	$(36,571.95)	$(36,571.95)	$ -	Refer LL-VARN-000405
services	dated 19/05/2021
resulting from BCS design of works in the
Existing Bag Hall
ETR Phase 3	$(12,369.12)	100%	$(12,369.12)	$ -	$(12,369.12)	Refer GCOR-024560
and 5 combined	4/11/2021 / Refer LL-VARN-
works -	000405 dated 19/05/2021
additional ISS costs. ISS invoice
SISE114103
Additional civil	$(25,862.26)	38%	$(9,740.13)	$(16,122.13)	$(25,862.26)	Refer LL-VARN-000405
works resultant	dated 19/05/2021
of EBH structural design by BHS. Refer BCSAS- TRANSMIT-
000225
11/06/2020
VPR023	Extension of	$832,480.73	$ -	$ -	$(832,480.73)	This claim does not comply
time claim	with the Contract. The Contractor has assessed entitlement as nil. [Lendlease note this claim has been amended from previous advice and BCS Systems have submitted new supporting
documentation. Lendlease

S/C

Lend

Description

Subcontractor

Lendlease Assessment

Ref:

lease

Claim

Ref:

Submitted

Value

Previously

This Claim

Variance [$]

Reasons why the value

Claim [$] [A]

Assessed

Assessed Value

Value [$]

[G]=

assessed is less / different

[$]

[%]

[$]

[F]-[C]

than the claimed amount

[F]=[D]x[E]

is preparing a response to BCS Systems based on this
information].

VPR024	Make up loop 04	$81,370.00	$24,411.00	$24,411.00	$(56,959.00)	Tug Damage Rectification -
damage repair	instructed to proceed. (Client approved). Works assessed as 40% complete
at time of payment claim.
VPR025	Installation of	$58,866.95	$ -	$ -	$(58,866.95)	Entitlement has been tested
additional E-	and the Contractor advises
stops	these works were a compliance issue to Works Under Contract. On this basis, Lendlease has assessed at nil. **Lendlease is preparing a response to BCS Systems based on new information provided with
Jul-22 Payment Claim**
$

The adjudication application was then delivered by BCS on 16 September 2022. The evidence placed before the court did not contain all of the attachments to the adjudication application. What is apparent from the adjudication application is that BCS, by the adjudication application, was only claiming three variations which were then in dispute with Lendlease. They were:

(a) VPR22 - the PLC upgrade for $20,069.50;
(b) VPR23 - the extension of time claim for $915,728.80; and
(c) VPR25 - the installation of additional E-stops for $64,753.64.

There was no claim for VPR24 in the adjudication application.
In respect of the three remaining variations, it is uncontentious that VPR22 involved construction work carried out only in Queensland. For the purposes of this proceeding, Lendlease accepted that the adjudication decision would not be invalid in respect of the sum representing VPR22, namely $20,069.50 (inclusive of GST).
VPR25 involved construction work which was performed both in Queensland and in New South Wales. A statutory declaration of Mr Southon dated 27 October 2022 establishes that fact. The adjudication decision ultimately assessed $0 for VPR25. As a result of this, no argument in this proceeding has concerned VPR25.
The argument in this proceeding has centred on VPR23. VPR23 arose as a result of delays to access, inter alia, to certain areas relating to particular structures which were to be situated variously:

(a) wholly in Queensland;
(b) partly in Queensland and partly in New South Wales; and
(c) wholly in New South Wales.

Those structures included Reclaim Carousel 6 (which was sited mostly in New South Wales but partly in Queensland) and Out of Gauge Line 1 (international) (which was sited wholly in New South Wales). As previously stated, those particular structures are situated in the top right third of the drawing attached to these reasons. Whether the delay damages within VPR 23 represented construction work carried out outside of Queensland is a critical matter in issue in this proceeding.
On 28 October 2022, Lendlease delivered its adjudication response.
Again, the evidence before me did not include all of the attachments to the adjudication response. At paragraph [7.1] of the adjudication response submissions, Lendlease made clear that it disputed each of VPR22, VPR23 and VPR25.
The adjudication response submissions at paragraphs [9.1]-[13.4] raised the proper construction of s 61(4) of the BIF Act. Lendlease submitted that the application of s 61(4) of the BIF Act precluded the adjudicator from having jurisdiction.
The raising of the s 61(4) issue led to the adjudicator on 13 November 2022 to call for further submissions, inter alia, on that issue by 16 November 2022.
On 16 November 2022, solicitors for Lendlease made additional further submissions on the s 61(4) issue by way of letter, particularly at paragraphs [1.1]-[1.32] of the letter.
On 16 November 2022, BCS, by its solicitors, also made further submissions, inter alia, on the s 61(4) issue, particularly at paragraphs [2]-[25].
On 16 November 2022, solicitors for Lendlease sent reply submissions, in part
directly responding to BCS’ submission made that same date. The reply submissions
addressed the s 61(4) issue at paragraphs [1.1]-[1.38].
On 16 November 2022, the solicitors for BCS also replied to Lendlease’s first set of

submissions made on the same date. The reply submissions addressed the s 61(4)
issue at paragraphs [1]-[25].

As a result of those various rounds of further submissions and replies, on 21 November 2022, the adjudicator requested a second round of further submissions and replies. In doing so, the adjudicator expressed a preliminary view in the following
terms, “I’m not persuaded by the claimant’s or respondent’s arguments about the
relevant jurisdiction for the purpose of the Security of Payment legislation over the
Gold Coast Airport.” The adjudicator went on to articulate a preliminary view to the
effect that the CPAL Act operated so that either the Queensland or New South Wales Security of Payment legislation applied. He asked for further submissions to be provided on the issue of whether the security payment legislation applied to construction work at the Gold Coast Airport, which was a Commonwealth Place. Those submissions were asked to be supplied by 23 November 2022. He also requested reply submissions by 24 November 2022. In effect, the adjudicator was communicating a preliminary view that he had jurisdiction to carry out an adjudication by reason of the CPAL Act, under either the BIF Act or the New South Wales equivalent, and, by implication, s 61(4) and its New South Wales equivalent did not deny jurisdiction.
On 23 November 2022, Lendlease provided further submissions addressing the CPAL Act. Those submissions were to the effect that both the Queensland and New South Wales Acts applied, but on the proper construction of s 61(4) of the BIF Act and its New South Wales equivalent, each had the effect of removing the jurisdiction of the adjudicator in the circumstances of the case.
On 23 November 2022, solicitors for BCS made submissions on the operation of the CPAL Act to the effect that it resulted in the BIF Act applying to the exclusion of the equivalent New South Wales Act, and, accordingly, concluded that the adjudicator had jurisdiction.
On 24 November 2022, solicitors for Lendlease purported to reply to the submissions of BCS from 23 November 2022. It did so, in part, by raising a fresh jurisdictional point, which is the point identified as the fifth issue in this proceeding. It had not been raised previously. This new point was raised at paragraphs [1.1]-[1.26] of the 24 November 2022 reply submissions.
On 24 November 2022, solicitors for BCS put in reply submissions. These
submissions only replied to Lendlease’s submission of 23 November 2024 and only
dealt with the s 61(4) issue.
The adjudicator requested, and was granted by the parties, an extension of time up to 6 December 2022 to deliver the adjudication decision.
On 6 December 2022, the adjudicator released his adjudication decision to the parties and awarded an amount of $995,081.18 (inclusive of GST). Ultimately, that was made up by allowing VPR22 in full for $18,245 (exclusive of GST), VPR23 in full for $832,480.73 (exclusive of GST) and other undisputed items in the sum of $53,893.52 (exclusive of GST). The adjudicator then added GST on to each of the figures to come to the $995,081.18 total adjusted sum. As previously observed, $0 was allow for VPR25.
In the adjudication decision, the adjudicator dealt with Lendlease’s assertion that the
payment claim was invalid because some work was carried out in New South Wales and some was carried out in Queensland, and that the Act did not apply as it was not possible to distinguish which work was performed in which State.[6]
[6] Paragraph [120] of the adjudication decision.
The adjudicator’s decision on this particular issue can be seen at paragraphs [120]-
[135]. At paragraph [120] the reasons refer to the adjudicator having called for further submissions and replies by 23 and 24 November 2022. Earlier at paragraphs [59]- [60], the adjudicator had recorded that each of Lendlease and BCS had provided him with their 23 and 24 November 2022 responses to his request for the parties to consider the CPAL Act.
The adjudicator’s reasoning which followed on the issue of his jurisdiction essentially reflected the reasoning in the adjudicator’s correspondence of 21 November 2022. In
essence, the adjudicator reasoned that the CPAL Act resulted in the availability of both the BIF Act and also the New South Wales equivalent Act in respect of work carried out on the Gold Coast Airport. Consequently, he concluded that the BIF Act applied to the work carried out under the contract and, consequently, the payment claim was valid.
No specific mention of s 61(4) of the BIF Act or s 4(5) of the CPAL Act was made.
It is against this background of facts which the issues should now be considered.
Issue 1: The proper construction of s 61(4) of the BIF Act
(a) Relevant legislation
The proper construction of s 61(4) will require a consideration of a variety of sections of the BIF Act. The most relevant sections for consideration in that respect are the following:
“3 The main purpose of Act
(1) The main purpose of this Act is to help people working in the building and construction industry in being paid for the work they do.
(2) The main purpose of this Act is to be achieved primarily by—

(a)

requiring the use of statutory trusts for particular contracts related to the building and construction industry; and

(b)

granting an entitlement to progress payments, whether or not the relevant contract makes provision for progress payments; and
(c) establishing a procedure for—

(i) making payment claims; and
(ii) responding to payment claims; and
(iii) the adjudication of disputed payment claims;
…
Chapter 3 Progress Payments
Part 1 Preliminary
Division 1 Application and operation of chapter
61 Application of chapter
(1) Subject to subsections (2) to (4), this chapter applies to construction contracts—

(a) whether written or oral, or partly written and partly oral; and

(b)

whether expressed to be governed by the law of Queensland or a jurisdiction other than Queensland; and

(c)

whether entered into before or after the commencement of this section, other than to the extent the repealed Building and Construction Industry Payments Act 2004 continues to apply to unfinished matters under section 205.
(2) This chapter does not apply to—

(a)

a construction contract to the extent that it forms part of a loan agreement, a contract of guarantee or a contract of insurance under which a recognised financial institution
undertakes—

(i) to lend an amount or to repay an amount lent; or
(ii) to guarantee payment of an amount owing or repayment of an amount lent; or
(iii) to provide an indemnity relating to construction work carried out, or related goods and services supplied, under the construction contract; or
(b) a construction contract for the carrying out of domestic building work if a resident owner is a party to the contract, to the extent the contract relates to a building or part of a building where the resident owner resides or intends to reside; or
(c) a construction contract under which it is agreed that the consideration payable for construction work carried out under the contract, or for related goods and services supplied under the contract, is to be calculated other than by reference to the value of the work carried out or the value of the goods and services supplied.
(3) This chapter does not apply to a construction contract to the extent it includes—

(a) provisions under which a party undertakes to carry out construction work, or supply related goods and services in relation to construction work, as an employee of the party for whom the work is to be carried out or the related goods and services are to be supplied; or
(b) provisions under which a party undertakes to carry out construction work, or to supply related goods and services in relation to construction work, as a condition of a loan agreement with a recognised financial institution; or
(c) provisions under which a party undertakes—

(i) to lend an amount or to repay an amount lent; or
(ii) to guarantee payment of an amount owing or repayment of an amount lent; or
(iii) to provide an indemnity relating to construction work carried out, or related goods and services supplied, under the construction contract.
(4) This chapter does not apply to a construction contract to the extent it deals with construction work carried out outside Queensland or related goods and services supplied for construction work carried out outside Queensland.
(5) In this section— resident owner, in relation to a construction contract for carrying out domestic building work, means a resident owner under the Queensland Building and Construction Commission Act 1991, schedule 1B, section 1, but does not
include a person—

(a)

who holds, or should hold, an owner-builder permit under the Queensland Building and Construction Commission Act 1991 relating to the work; or

(b)

who is a building contractor within the meaning of the Queensland Building and Construction Commission Act 1991.
…

Division 2 Interpretation
64 Definitions for chapter
In this chapter—
…
carry out construction work means—

(a) carry out construction work personally; or
(b) directly or indirectly, cause construction work to be carried out; or
(c)

provide advisory, administrative, management or
supervisory services for carrying out construction work.

…
construction contract means a contract, agreement or other arrangement under which 1 party undertakes to carry out construction work for, or to supply related goods and services to, another party.
…
65 Meaning of construction work
(1) Construction work means any of the following work—

(a)

the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures, whether permanent or not, forming, or to form, part of land;

(b)

the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for land drainage or coast protection;

(c)

the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems;

(d)

the external or internal cleaning of buildings, structures and works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension;

(e)

any operation that forms an integral part of, or is preparatory to or is for completing, work of the kind referred to in
paragraph (a), (b) or (c), including—

(i) site clearance, earthmoving, excavation, tunnelling and boring; and
(ii) the laying of foundations; and
(iii) the erection, maintenance or dismantling of scaffolding; and
(iv) the prefabrication of components to form part of any building, structure or works, whether carried out on- site or off-site; and
(v) site restoration, landscaping and the provision of roadways and other access works;
(f) the painting or decorating of the internal or external surfaces of any building, structure or works;
(g) carrying out the testing of soils and road making materials during the construction and maintenance of roads;

(h) any other work of a kind prescribed by regulation.
…
(3) However, construction work does not include any of the following work—

(a) the drilling for, or extraction of, oil or natural gas;

(b)

the extraction, whether by underground or surface working, of minerals, including tunnelling or boring, or constructing underground works, for that purpose.
66 Meaning of related goods and services
(1) Related goods and services, in relation to construction work, means any of the following—

(a) goods of the following kind—

(i)

materials and components to form part of any building, structure or work arising from construction work;

(ii)

plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;
(b) services of the following kind—

(i) the provision of labour to carry out construction work;

(ii)

architectural, design, surveying or quantity surveying services relating to construction work;

(iii)

building, engineering, interior or exterior decoration or landscape advisory services relating to construction work;
(iv) soil testing services relating to construction work;

(c)

goods and services, relating to construction work, of a kind prescribed by regulation.
(2) In this chapter, a reference to related goods and services includes a reference to related goods or services.
…
68 Meaning of payment claim
(1) A payment claim, for a progress payment, is a written document
that—

(a)

identifies the construction work or related goods and services to which the progress payment relates; and

(b)

states the amount (the claimed amount) of the progress payment that the claimant claims is payable by the respondent; and
(c) requests payment of the claimed amount; and
(d) includes the other information prescribed by regulation.

(2) The amount claimed in the payment claim may include an amount

that—

(a)

the respondent is liable to pay the claimant under section 98(3); or

(b)

is held under the construction contract by the respondent and that the claimant claims is due for release.

(3) A written document bearing the word ‘invoice’ is taken to satisfy

subsection (1)(c).
…
Part 3 Claiming progress payments
75 Making payment claim
(1) A person (the claimant) who is, or who claims to be, entitled to a progress payment may give a payment claim to the person (the respondent) who, under the relevant construction contract, is or may be liable to make the payment.
…”

(b) Contentions of the parties

It is worth setting out s 61(4) of the BIF Act again. It states:
“This chapter does not apply to a construction contract to the extent it
deals with construction work carried out outside Queensland or related goods and services supplied for construction work carried out outside
Queensland.”
The starting point for a summary of the parties’ positions is to recognise that they

both accept that s 61(4) of the BIF Act is a section which goes to the jurisdiction of
an adjudicator and involves a jurisdictional fact.

I turn first to the position of Lendlease on the proper construction of s 61(4) of the BIF Act. Lendlease identified that Chapter 3 of the BIF Act is the chapter that
contains a claimant’s right to make a payment claim and provides for how that right
is ultimately able to be adjudicated on.
Lendlease points out that s 61(1) of the BIF Act expressly identifies that Chapter 3 applies to a construction contract. That is an inclusive expression of jurisdiction. Lendlease then points out that the language of s 61(1) makes it subject to ss 61(2)-(4)
of the BIF Act, which Lendlease describes as “exclusions” of jurisdiction.

Lendlease points to the language at the commencement of s 61(4) of the BIF Act,
where it says “This chapter does not apply…”. Lendlease submits that this language

makes clear that Chapter 3 has no operation in respect of the subject matter which is
then identified in the section.

Lendlease says that this language gave rise to the subject matter that follows being the subject of a jurisdictional fact, namely a fact which the adjudicator can determine for the limited purpose of making his or her decision, but cannot conclusively determine. A jurisdictional fact can only be conclusively determined by a court. On such an occasion, a court may receive evidence on this question, which goes beyond the material which was before the adjudicator.
Turning then to the words “to the extent it deals with…” as they appear in s 61(4) of
the BIF Act, Lendlease submitted that they indicated a dis-application of Chapter 3 not to the entirety of the construction contract, but only to the extent that it deals with construction work carried out outside of Queensland. It submitted that there was nothing in the text of s 61(4) which implied an all-or-nothing approach, depending on whether a contract or a project had a closer connection to Queensland or, alternatively, to New South Wales.
The submission continued that the dis-application of the operation of part of the construction contract was consistent with authorities concerning the equivalent of s 61(3) of the BIF Act in other States. As an example, reference was made to the decision in Forte Sydney Carlingford Pty Ltd v Li [2022] FCA 1499, which concerned the New South Wales equivalent of s 61(3)(c)(iii).[7]
[7] This decision went on appeal but the appellant decision does not render the reference to the first instance decision inappropriate.
Lendlease initially submitted in writing that this dis-application had the following consequences:

(a) a payment claim is invalid and/or ineffective, either in whole or at least to the extent that it includes a claim based on the parts of the contract to which Chapter 3 does not apply;
(b) an adjudication application is invalid and/or ineffective, either in whole, or at least to the extent that it includes a claim based on parts of the contract to which Chapter 3 does not apply; and
(c) if the invalid and/or ineffective parts of a payment claim or an adjudication decision are inseverable from the valid and effective parts, the whole of the payment claim and the adjudication application is invalid.

That position was modified during oral submissions to the extent that Lendlease accepted that the adjudication decision was valid to the extent that it dealt with VPR22. In the case of VPR22, it should be recognised that both parties accepted that it dealt entirely with construction work carried out inside of Queensland. Whilst not stated, presumably the uncontested amounts which had been set out in the payment schedule also fall into this category. Such a concession carried with it a concession that the effect of s 61(4) was not one which would result in the adjudication application being entirely void.[8]
[8] The concession in oral argument was not evidently linked to an application of s 101(4) of the BIF Act.

[78] Lendlease submitted that there was an important intersection between the requirements of s 68(1)(a) of the BIF Act which concerned what a payment claim must contain on the one hand, and the dis-application effected by s 61(4) of the BIF Act on the other hand. It was said, at least in the unusual circumstances of the present case, that BCS needed to identify (or at least make a good faith attempt to identify) which work was carried out in New South Wales and which work was carried out in Queensland. The submission continued that the identification of those matters was, at least in the present case, part and parcel of identifying the construction work or related goods and services to which the progress payment relates to, as required by s 68(1)(a) of the BIF Act.

It was submitted by Lendlease that the requirement in s 68(1)(a) of the BIF Act to identify the construction work and related goods and services to which the progress payment relates had previously been found to be an essential requirement for a payment claim to exist.[9]
[9] T & M Buckley Pty Ltd v 57 Moss Rd Pty Ltd [2010] QCA 381 at [36] and KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178 at [12].
Next, Lendlease submitted that the phrase “construction work carried out” as it
appears in s 61(4) of the BIF Act was a reference to the activity of carrying out work, as opposed to the final product of the activity. In this respect, the phrase referred to
the definition of “construction work” contained in s 65(1) of the BIF Act, and in
particular, each of the identified categories contained in s 65(1)(a)-(d) of the BIF Act. It was said that each pointed to an activity which related to the production of a defined thing, but was not limited to the defined thing itself. Lendlease submitted that the
language of s 61(4), which talks of “construction work carried out” was referring to

the locus of the activity not the locations of the building, structure or works in relation
to which those activities are done to or relate to.

Lendlease submitted that BCS’s construction fails to focus on the location of the
activities when answering the s 61(4) question. Instead, Lendlease says that BCS focuses on the location of the building, structure or work to which the activity applies. Lendlease says that BCS identifies the wrong integer for the s 61(4) question and thus produces the wrong answer.
I turn then to the contentions of BCS on the proper construction of s 61(4) of the BIF Act.
As previously identified, BCS agreed that s 61(4) of the BIF Act was jurisdictional and involved the identification of a jurisdictional fact.
BCS also accepted that to the extent that Lendlease could satisfy the court that the adjudication decision (or parts thereof) awarded a sum for construction work carried out outside Queensland, then that part of the decision would be liable to be set aside.
Embedded in that accepted proposition was BCS’s primary construction contention. That is, on its proper construction, where s 61(4) refers to “construction work carried out outside Queensland”, it refers to construction work on, or relating to, a building
or structure or works situated wholly outside Queensland.
On BCS’s construction of s 61(4), the concept of “wholly” is incorporated into the
sub-section so that it reads “this chapter does not apply to a construction contract to the extent it deals with construction work carried “wholly” outside Queensland or
related goods and services supplied for construction work carried out “wholly”
outside Queensland.
In support of that proposition, BCS pointed to the decision in Casey v DePuy International Ltd [2023] FCA 254 where Perram J was considering whether the phrase “outside Victoria” as it appeared in s 85 of the Accident Compensation Act
1985 (Vic) ought to be interpreted as “wholly”, as opposed to the insertion of the words, “outside to some extent”. Reference was also made to the Queensland Court
of Appeal decision of Carnation Australia Pty Ltd v Commissioner of Stamp Duties [1994] 2 Qd R 366 particularly at page 386, where Davies JA was considering
whether the phrase “outside Queensland” in the relevant revenue statute there in issue,
might possibly mean “wholly outside” Queensland.
The statutes in those cases were unrelated to the BIF Act. The authorities were only relied upon as examples of where courts had cause to consider such construction questions, particularly in the light of ambiguity.
BCS submitted that reading s 61(4) as if “wholly” were present satisfied the purpose
of the relevant section. That purpose was identified as being to exclude work which had no relevant association with Queensland. It was submitted by BCS that construction work on a building, structure or work partly within and partly outside of Queensland would have the necessary association with Queensland.
In support of this submission, reference was made to Wiggins Island Coal Export Terminal Pty Ltd v Monadelphous Engineering Pty Ltd & Ors [2015] QSC 307, particularly at [37] in the judgment of McMurdo J as his Honour then was. His Honour, in commenting on the former s 3(4) of the now-repealed Building and Construction Industry Payments Act 2004 (Qld) (being the equivalent of the current
s 61(4) of the BIF Act) identified a purpose of that sub-section as being to “confine
the operation of the Act to circumstances which have a relevant association with
Queensland”.
I pause to note that Wiggins dealt with the construction of a pre-fabricated carriage and tipping system manufactured in Malaysia which was ultimately to be delivered to Queensland and installed as part of a coal export terminal wharf situated in Queensland. That case was decided solely on the basis that the pre-fabrication work carried out in Malaysia, which was the work the subject of the payment claim, was construction work only as a result of the operation of s 65(1)(e) of the BIF Act. That is, the pre-fabrication work was only construction work because it formed an integral part of the work of a kind referred to in one of the previous sub-paragraphs (a)-(c), namely a thing (the wharf in that case) which was to be situated exclusively on Queensland land. The relevant connection was that the pre-fabricated items were to form part of the Queensland wharf.
BCS further submitted that the concept of “construction work” as defined in sub-
paragraphs (a)-(c) of s 65(1) of the BIF Act comprised:

(a) certain types of activities (construction, alteration, etc);
(b) those activities being performed on, or in relation to “buildings”, “structures”, or “works”; and
(c) the end result of the work forming part of land.

Section 65(1)(d) included as construction work any cleaning carried out in the course
of the work dealt with in s 65(1)(a)-(c). Finally, s 65(1)(e) included as “construction work” any operation that forms an integral part of, or is preparatory to, or is for
completing, work of the kind referred to in ss 65(1)(a)-(c).
BCS submitted that if the construction was, for example, the construction of a
building that straddles the Queensland/New South Wales border, the “building” is not “external to…beyond the limits of” Queensland, and therefore the work of
constructing it (as a whole) is not “external to…beyond the limits of” Queensland.
Contrast this to where there is a contract to build two separate buildings, one being in Queensland and one being in New South Wales. The New South Wales building
would be “external to…beyond the limits of” Queensland.
BCS sought to contrast its interpretation of “construction work carried out outside Queensland” with that of Lendlease. It said of Lendlease that its interpretation would
seek to divide up a building, structure or work by treating each task that could be performed as a separable item that could be excluded from the Act. It articulated this concept in the following way:
“Thus, Lendlease does not ask whether the “construction work” - the
construction of the building - is carried out outside of Queensland; rather, it asks whether (for example) the construction of a wall, or a window, or a part of a wall or window, is carried out outside
Queensland.”
BCS submitted that its interpretation above is more practical and workable and therefore more likely to have been the statutory intention.[10] For work which straddles the border, it involved the parties simply asking the question of whether the building, structure or work had a partial footprint in Queensland, or rather whether that footprint was wholly outside of Queensland.
[10] BCS cites Barrett v TCN Channel Nine Pty Ltd (2019) 96 NSWLR 478 at 90 per McColl JA for this proposition.
BCS said that Lendlease’s interpretation would require a minute analysis of the
activities as they apply to any building or structure straddling the border, with any mistakes in dividing up the constituent parts of the portions of the activities forming the construction work between the two locations giving rise to the risk of invalidity (at least to some extent), flowing from the jurisdictional effect of s 61(4).
BCS also submitted that its construction would be more consistent with the intended purpose of the Act to provide an entitlement for the payment of builders, which is to be determined informally, summarily and quickly.[11] An interpretation which would favour the parties knowing precisely where they stand at any point in time is one which it submitted would accord with the purpose and objects of the BIF Act.[12]
[11] Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (2018) 264 CLR 1 at [44].
[12] Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (2018) 264 CLR 1 at [36].
BCS further submitted that s 61(4) of the BIF Act would not operate to invalidate a payment claim or an adjudication application merely because it included a component for construction work carried out wholly outside of Queensland. BCS accepted that such a component could not be adjudicated on, but submitted its presence in the payment claim did not invalidate the payment claim.
BCS submitted that this position was supported by s 75(1) of the BIF Act. BCS
contended that a person does not fail to meet the description of someone who “is or who claims to be entitled to a progress payment” merely because it is determined

that they claimed a component item in a payment claim for which there is ultimately
no liability.[13]
[13] Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd & Ors (2016) 260 CLR 340 at [60].

It was submitted by BCS that taking Lendlease’s submission to its logical conclusion
would mean that where a payment claim was seeking payment of $1 million, the inclusion of a $1000 line item for work performed outside of Queensland would mean that the claimant could not utilise the scheme to recover the remaining 99.9 per cent
of the claim. BCS contended that that could not possibly have been the legislature’s
intention.
(c) Determination
The starting point for the construction of s 61(4) of the BIF Act is the well understood principle that the objects and purpose of the legislation must be considered with the text of the Act as a whole when construing individual provisions. As was acknowledged in Project Blue Sky v Australia Broadcasting Authority (1998) 194 CLR 355, the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all of the provision of the statute.
In this regard, it is important to observe that s 3 of the BIF Act sets out its main purpose. That is, to aide people working in the building and construction industry in being paid for the work they do. It is to be achieved by:

(a) granting an entitlement to progress payments, even if the contract does not do so; and
(b) establishing a procedure for making payment claims, responding to payment claims, adjudication of disputed claims, and recovery of the amounts claimed.[14]
[14] Sections 3(b) and 3(c) of the BIF Act.

The purpose and object of the BIF Act is to provide a quick and inexpensive interim procedure for builders to be paid for their work. This is an important and relevant consideration for construing how individual provisions within the BIF Act operate. This includes whether they give rise to jurisdictional facts.
In BSA Advanced Property Solutions (Fire) Pty Ltd v Ventia Australia Pty Ltd (2022) 108 NSWLR 350, the New South Wales Court of Appeal, sitting as a five bench appellate court,[15] approved of the observation of Spigelman CJ in Chase Oyster Bar,
[15] This was so because a challenge had been made to the correctness of a prior intermediate appellant decision.
where his Honour observed “that the purpose of the legislative scheme is best served
by restricting the scope of intervention by the courts.”[16] In BSA Advanced, the Court
[16] Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 at [51].
rejected the proposition that there was an implied jurisdictional requirement in the New South Wales equivalent of s 68(1) of the BIF Act for a payment claim to identify the construction contract to which the payment claim relates. In doing so, they had regard to the purpose and objects of the relevant Act.
In Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2013] 2 Qd R 75, the Court of Appeal had to consider an argument that there was jurisdictional error when an adjudicator determined the extent and quantum of work that comprised
“construction work”, in circumstances where the construction contract in that case
had contained a mixture of types of work. Some of the work fell within s 65(1) of the BIF Act, but some of the work fell within the exclusions contained in s 65(3) of the BIF Act. The Court of Appeal, in rejecting the argument, relied, in part, on the conclusion that the construction proposed did not promote the object of the Act, namely to provide a speedy interim solution to progress payment disputes arising under construction contracts. Indeed, the Court identified that the construction called
for by the argument would undermine the Act’s object in that it would result in the

invalidity of an adjudication determination no matter how small the component
incorrectly determined to be construction work was.[17]
[17] Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2013] 2 Qd R 75 per Philippides J at [102]-

Turning then to s 61(4) of the BIF Act, I ultimately favour the construction of s 61(4) put forward by BCS. My reasoning is as follows.

[107] First, I accept both parties’ submissions that s 61(4) of the BIF Act provides a
jurisdictional limit and gives rise to a jurisdictional fact. That conclusion is consistent
with the introductory words of s 61(4) that, “This chapter does not apply to…”. They
are clear and emphatic words which indicate that the subject matter of the section is being excluded from the application of the Chapter. The overall operation of s 61 of the BIF Act can be described as follows. Section 61(1) identifies in a positive way
when Chapter 3 applies. That is, to a “construction contract”. Section 61(1) of the
BIF Act (and its interstate equivalents) have been consistently construed as imposing
an essential and necessary pre-condition that there be a “construction contract”. That
pre-condition involves a jurisdictional fact. Each of ss 61(2), (3) and (4) then deal with jurisdiction in a negative way. That is, they each indicate what is excluded from the operation of Chapter 3.

The New South Wales equivalent of s 61(4) of the BIF Act has construed to result in a jurisdictional limit and involve a jurisdictional fact.[18]
[18] See Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd & Anor [2011] NSWSC 165.
Secondly, the words “to the extent” it deals with construction work are indicative that
the dis-application of a construction contract is only to a particular degree.
A construction which favours a dis-application to a particular degree is also supported by the use of the same phrase in ss 61(2)(b) and 61(3) of the BIF Act. Each of those particular sections contemplate that the Chapter will continue to operate for at least a portion of the construction contract.
Thirdly, once it is understood that s 61(4) of the BIF Act goes to jurisdiction and gives rise to a jurisdictional fact, the operation of that section will carry with it a hard dividing line for the dis-application of Chapter 3. That is, construction work will either sit within jurisdiction for an adjudicator or will sit outside of jurisdiction for an adjudicator.

[287] Lendlease pointed to the fact that an adjudication decision necessarily becomes incorporated into an adjudication certificate by operation of s 91(1) of the BIF Act. That certificate then may be filed as a judgment for a debt in a court pursuant to s 93(1) of the BIF Act. Lendlease also pointed to the fact that the judgment attracts to itself all of the protections articulated in s 93(4)(a). In particular, the party applying to set aside the judgment was not entitled to:

(a) to bring any counterclaim against the entity with the benefit of the judgment;

(b)

to raise any defence in relation to matters arising under the construction contract to which the adjudication certificate relates; or
(c) to challenge the adjudicator’s decision.
[288] Lendlease submitted that the effect of s 93 was to convert an administrative determination into a binding, authoritative and curially enforceable determination. That is a determination which has the character of being reached by the exercise of judicial power.

Lendlease submit that as the power to make such a determination was not picked up by s 4(5) of the CPAL Act, this meant that s 4(1) had the effect of, at the very least, not incorporating s 88 of the BIF Act. Lendlease submitted further that at its widest none of the State Act would be picked up.
Lendlease submitted that this construction should not be thought to create significant difficulty in the operation of the scheme as it only arose in respect of Commonwealth Places. It submitted that it was only in the unusual circumstances of a case such as the present that the issue would arise. When that occurred, s 4(1) of the CPAL Act was not intended to pick up and apply as Commonwealth law State laws which vest judicial power in the decision-maker.
I turn then to BCS’s submissions on this issue.

[292] BCS accepted that the BIF Act was only capable of applying to the underlying contract if it was picked up by the CPAL Act. It also accepted that the CPAL Act, by s 4(5) did not pick up and apply provisions of the BIF Act which conferred judicial power. It submitted that what was in dispute is whether s 88(1) of the BIF Act conferred judicial power. BCS submitted that it did not do so. BCS further submitted that the five authorities relied upon, including Brandy, all concerned different statutory schemes and that the question must be determined by reference to the terms of the statute in question.

BCS submitted that the purported critical element of the exercise of judicial power,
on Lendlease’s case, was that it involved a binding and authoritative decision, or in
other words, that the exercise of judicial power was conclusive.[60]
[60] Ibarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 at [6] and Luton v Lessels (2002) 210 CLR 333 at [24] and [127].
BCS submitted that a determination which was susceptible to a collateral challenge lacked the character of an authoritative or final decision. It contended that the presence of such a susceptibility was an indication that the power was not judicial. In this respect, they relied on Breckler at [46]-[47] and Attorney-General (Cth) v Alinta Limited (2008) 233 CLR 542 at [100].

[295] BCS submitted that while the BIF Act regime allowed its rights to be enforced through judgments of courts, the rights were interim in nature. In particular, this was reflected by s 101 of the BIF Act and the equivalent s 32 of the SOP Act. In this respect, BCS relied upon the statement of the majority in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (2018) 264 CLR 1 at [37] and [39], relevantly as follows:[61]
[61] See also Northbuild Construction P/L v Central Interior Linings P/L & Ors [2011] QCA 22 at [3] (Margaret McMurdo P); [53] (White JA).

“[37] …it is important to appreciate the subject matter of the Security

of Payment Act. The Security of Payment Act is not concerned with finally and conclusively determining the entitlements of parties to a construction contract.
…
[39] The Security of Payment Act does not speak of “interim”
entitlements and payments, but the label aptly reflects how the statutory entitlement interacts with any underlying contractual liability. In that respect, the statutory entitlement established by the Security of Payment Act stands in marked contrast to the
sort of final determination provided for in the legislative scheme considered in Hockey v Yelland (59), the effect of
which was permanent.” (this emphasis was added by BCS)

[296] BCS also submitted that the fact that the adjudication decisions were open to challenge for jurisdictional error had, in certain cases, been held to be an indicator against the power being judicial.[62]
[62] Breckler at [47] and Alinta at [100].

BCS submitted that a number of authorities had held that the security of payment regime did not involve the exercise of judicial power.
BCS pointed to State of Queensland v Epoca Constructions Pty Ltd & Anor [2006] QSC 324 at [32]-[33] per Philippides J, where her Honour found that despite the ability for an adjudication certificate to be registered as a judgment, an adjudication decision did not have a judicial character.
I pause to note that paragraphs [30] to [33] from her Honour’s reasons are relevant to
this issue. It is appropriate to set them out in full.[63]
[63]           State of Queensland v Epoca Constructions Pty Ltd & Anor [2006] QSC 324 at [30]-[33].
“[30] The difficulties in distinguishing between decisions that are of a
judicial as opposed to executive nature are well known. The line between the two is a blurred one. The making of binding determinations of right by way of adjudication of disputes about rights and obligations arising from the operation of law upon past events or conduct is a classical instance of the exercise of judicial power.[64] An often cited description of judicial power was stated by Kitto J in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd:[65]
[64]           Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 67.
[65] (1970) 123 CLR 361 at 374.
“… judicial power involves, as a general rule, a decision settling
for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts
has shown to exist.”
[31]A hallmark of a judicial function is whether the performance of
function terminates in a determination that has conclusive effect.[66] The decision of the adjudicator as to a progress payment is not a final and authoritative decision. The adjudicator does not decide questions of fact and law once and for all. As Einstein J said in Brodyn Pty Limited t/as Time Cost and Quality v Davenport:[67]
[66]           Evans, J.M., De Smith’s Judicial Review of Administrative Action, 4th ed, Stevens & Son Limited, 1980
[67] [2004] 61 NSWLR 41 at [14].
“What the legislature has provided for is no more or no less than
an interim quick solution to progress payment disputes which
solution critically does not determine the parties’ rights inter se.
Those rights may be determined by curial proceedings, the Court then having available to it the usual range of relief, most importantly including the right to a proprietor to claw back progress payments which it had been forced to make through the adjudication determination procedures. That claw back
route expressly includes the making of restitution orders.”
[32]  Notwithstanding that failure to pay an adjudicated amount may result in an adjudication certificate being issued, which may be filed as a judgment of the court, s 100 enshrines the interim
nature of the adjudicator’s decision by preserving the parties’
rights to the processes of the courts to determine the issue of ultimate entitlement to retain the adjudicated amount. The lack
of conclusiveness of an adjudicator’s decision and the fact that it
is susceptible to attack in collateral curial proceedings is an
important indication that the adjudicator’s decision is not of a
judicial character.
[33] A further indication as to the character of the decision may be gleaned from the way in which the adjudicator exercises his powers.[68] A function may be characterised as judicial where it is exercised in accordance with the judicial process.[69] The following are significant in that regard. The adjudication proceeds on the basis of the material put before the adjudicator in accordance with Part 3 of the BCIPA and there is no provision for the calling and cross examining of witnesses. While an adjudicator may call a conference of the parties and may carry out an inspection, it must be conducted informally and parties are not entitled to any legal representation: s 25(4). There is thus little scope for factual inquiry and a consequent finding of fact in a judicial sense by the adjudicator. Further, while there is some echo in the procedures set out in the BCIPA (for a payment claim, payment schedule, submissions and adjudication response) of the procedure for pleadings in a court, it is somewhat faint. And there is little by way of the judicial trappings or other indicia
[68]           Reg v Hegarty; Ex Parte City of Salisbury (1981) 147 CLR 617 at 628.
[69]           Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189.
associated with exercise of a judicial power.”
BCS also referred to the Full Federal Court decision in Birdon Pty Ltd v Houben
Marine Pty Ltd & Ors (2011) 197 FCR 25, and in particular to Keane CJ’s
observations at paragraphs [33] and [53] which relevantly provided as follows:

“[33]… the Security of Payment Act is not concerned to give effect to

the rights of the parties under the construction agreement. As is apparent from the terms of s 32(2), it expressly leaves the determination of those rights to the courts. The process for which the Security of Payment Act provides does not involve a determination, even of a provisional kind, of the actual rights of the parties under their construction contract. Section 23
contemplates an “assessment” by the adjudicator, and this
assessment may be enforced as if it were a judgment of a court of competent jurisdiction but only insofar as a court has not determined, or does not determine, otherwise.
…
[53] There is nothing about the enforcement of the adjudication certificate as if it were a judgment of a court which is at odds with the fundamentals of the judicial process. The concern which informs the Kable principle is that the other branches of government should not be able to claim the authority of the judicial branch of government for their decisions by representing an executive or legislative decision as an exercise of the judicial power. Section 25 of the Security of Payment Act does not engage that concern. It is readily apparent from the terms of ss 22 to 25 of the Act that the adjudication certificate which s 25 makes enforceable as if it were a judgment of a court is not the product of the exercise of judicial power. It cannot seriously be suggested that s 25 makes the Supreme Court of New South Wales an unsuitable repository of the judicial powers of the Commonwealth. And, in any event, no exercise of the judicial power of the Commonwealth is involved in the enforcement of
an adjudication certificate.”

Reference was also made by BCS to Buchanan J’s comments at [172] in Birdon.
BCS said that the observations in Epoca and Birdon referred to above had received approval in a number of subsequent authorities. In particular, BCS pointed to Allianz Australia Limited v Probuild Constructions Aust Pty Ltd [2023] NSWCA 56, per Leeming JA at [5]-[7] and [12] (with whom Mitchelmore JA was said to have agreed), Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] 183 ACTLR 245 per Lee J at [89(d)] and [104]-[105], Ming Tian Real Property Pty Ltd v SGS Platinum Pty Ltd (2020) 145 ACSR 329 at [46] and Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd (2015) 297 FLR 203 at [52].
The Solicitor-General made broadly similar submissions to those of BCS on behalf of SQ. SQ submitted that an adjudicator does not exercise judicial power. Without wishing to repeat the same submissions, it is relevant to note some of the emphasis given by the Solicitor-General to certain of the submissions made on behalf of SQ.

[304] The first was that a hallmark of a judicial function was the performance of the function terminating in a determination that had conclusive effect. SQ submitted that
an adjudicator’s decision lacks that final and authoritative effect because it does not
decide questions of fact and law once and for all. SQ referred to Philippides J’s
observations in paragraph [32] in Epoca about the effect of the then s 100 of the predecessor Act to the BIF Act (being equivalent to the current s 101 of the BIF Act),
enshrining the interim nature of the adjudicator’s decision by preserving the parties’
rights to the process of the courts to determine the issue of ultimate entitlement to retain the adjudicated amount. SQ emphasised that the High Court had recognised
that the label “interim” in the context of this Act was accurate as an adjudicator’s
decision to a claimant’s entitlement is on an interim basis, leaving rights and liabilities
under the contract to be decided separately.[70]
[70] Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (2018) 264 CLR 1 at [39].

SQ also emphasised that Philippides J recognised that a function may be characterised as judicial where it is an exercise in accordance with judicial process. SQ submitted
that her Honour’s descriptions of the process in that case as merely being
administrative was accurate. There was little scope for a factual inquiry and a consequential finding of fact in a judicial sense by the adjudicator, and little in the way of judicial trappings or other indicia associated with the exercise of judicial power. SQ referred to observations by the High Court in Probuild at [40] and [44] to the effect the adjudication process was informal, summary and quick, with brutally
fast timeframes. SQ highlighted Philippides J’s observation that legal qualifications
were no pre-requisite for the appointment to be an adjudicator.

[306] In respect of the Brandy decision itself, SQ submitted that quite apart from the registration of the judgment there had been other indicia of the Human and Rights and Equal Opportunity Commission acting judicially in that case. It could declare that an individual had engaged in unlawful conduct and, it could require a respondent to take certain actions, including the payment of damages assessed by the Commission. Critically, SQ pointed to s 25Z(2) of the Act in question in Brandy
which provided that determinations of the Commission were not “binding or
conclusive”. That position was reversed by other sections within the Act. Section
25ZAA made registration of the determination compulsory and s 257AB provided
that once registered the determination “had effect as if it were an order made by the
Federal Court”. It was those provisions, alongside s 25ZAC (providing for review proceedings) which combined to make the determination “binding, authoritative and
enforceable” and thus an exercise in judicial power.

SQ also submitted that with some schemes, registration will be relevant because the decision will bear all the hallmarks of a judicial power and will be binding without such registration. It was submitted that sometimes registration will be irrelevant because notwithstanding registration the process lacks other necessary hallmarks of judicial power. SQ submitted that the fact a determination must be complied with is not sufficient by itself to constitute the operation of a judicial power, where a finding concludes nothing between the parties. SQ submitted that while an adjudication
determination under the BIF Act was “binding”, it was neither final nor authoritative.
It was merely interim.
I turn then to Lendlease’s submissions in reply. Lendlease submitted that caution

needed to be given in respect of a number of the authorities relied upon by BCS and
SQ.

It was said that many of the authorities did not apparently have regard to Brandy or the line of cases which have considered Brandy. The most obvious example that was given was Epoca. It was submitted that Epoca ought to be regarded, at the very least, as per incuriam. It was submitted that Epoca was wrongly decided and ought not to be followed on this issue.
Further, Lendlease submitted that caution needed to be used in understanding the context of a number of the other decisions. Birdon was given as the prime example. It was pointed out that the issue in Birdon was ultimately whether the registration of the decision pursuant to the particular statutory scheme present in that case gave rise to a Kable problem in respect of the New South Wales Supreme Court. In particular, it was submitted that the comments of Keane CJ (as his Honour then was) were required to be read within that context. I understood that submission to mean that it was contended that Keane CJ was merely speaking of the pre-registration process as being administrative, and should not be taken as rejecting (implicitly) the proposition that the subsequent registration of the decision converted the administrative process into a judicial one.
It was pointed out that the only member in Birdon which mentioned Brandy was Rares J in his dissenting judgment, where his Honour concluded that the registration of the adjudication certificate did convert what was otherwise the exercise of administrative powers into the exercise of judicial powers by the adjudicator.
(c) Determination
I have concluded that an adjudicator does not exercise judicial power under the BIF Act. Consequently, this issue is answered in the negative and, as a result, s 4(1) of the CPAL Act has the effect of applying the BIF Act to the contract between the parties in accordance with its terms. It would equally apply the SOP Act to the contract to operate in accordance with its terms. My reason for these conclusions are as follows.
First, the question of whether a particular Act invests judicial power into a particular individual carrying out tasks under that Act will not be answered by the simple identification of certain fixed criteria. The question needs to be answered by an
examination of the totality of the Act as it affects the decision-maker’s process and
how the decision is then dealt with.
Secondly, putting to one side the registration of the ultimate adjudication decision, the authorities are uniform in pointing to the nature of the process being undertaken by an adjudicator as being one administrative in nature, as opposed to one which involves the exercise of judicial power.
Thirdly, and related to this last point, the process under the BIF Act can be readily distinguished from the process undertaken by the Commission in Brandy. The Commission in that case held an inquiry and ultimately made a determination of contravening conduct, accompanied by an assessment of damages. The ability to assess damages is a strong indicator of a decision-maker exercising judicial power. In many respects, the Commission in Brandy undertook a process which had features strongly pointing to the exercise of judicial power. It was only the presence of the
express section which provided that the Commission’s determination was not final
and binding which pointed against such a conclusion.

The reasoning of the High Court in Brandy was that the effect of the particular section that provided that the decision was not final and binding was then overturned by the subsequent sections which required the decision to be registered with the Federal Court. The decision was then an order of that Federal Court. Those subsequent sections had the effect of making the decision of the Commission in respect of the declaration of contravening conduct and the assessed damages final and binding in an authoritative sense.
Fourthly, while I accept that Philippides J did not apparently have Brandy brought to her attention, her Honour nonetheless undertook an analysis of the relevant statutory process which then existed under the predecessor to the BIF Act. Her Honour recognised that a hallmark of a judicial function was that it terminated in a determination that had a conclusive effect. Her Honour found that the decision of an adjudicator on a progress payment did not do this, as it was not a final and authoritative decision. In my view, her Honour was correct in respect of the Act she was considering and her reasoning remains correct for the BIF Act.
Fifthly, I note that in Allianz Australia Insurance Limited v Probuild Constructions (Aust) Pty Ltd [2023] NSWCA 56, Leeming JA noted potential limitations in Keane CJ and Buchanan J’s reasoning in Birdon on this issue. This was because of
Buchanan J observing that it was common ground between the parties that the functions performed by an adjudicator do not involve the exercise of judicial power. Despite noting this, his Honour clearly approved of the reasoning and conclusion of Philippides J in Epoca that an adjudicator[71] does not exercise judicial power,
[71] See Allianz Australia Insurance Limited v Probuild Constructions (Aust) Pty Ltd [2023] NSWCA 56 at [7].
including because the adjudicator’s decision is not final and authoritative.
Whilst Lendlease referred to the statement of Leeming JA in paragraph [7] as mere passing comment, I note his Honour returned to the subject matter again when dealing with Ground 1 of the appeal. At paragraph [12], his Honour further observed:
“…But it is extremely difficult to see how the streamlined regime,
with no oral hearing, and a determination by an adjudicator who need
not be legally qualified and which does not resolve the parties’ dispute
could constitute an exercise of judicial power, especially in light of the views expressed in Birdon Pty Ltd v Houben Marine Pty Ltd and State
of Queensland v Epoca Constructions Pty Ltd.” (emphasis is that of
Leeming JA)
The view expressed by Leeming JA in paragraph [7] should not be considered a mere comment. His Honour, in my view, was expressing clear agreement with Philippides
J’s reasoning and adopting a view that Keane CJ’s reasoning was consistent with that
of Philippides J. Whilst there is some room for uncertainty as to how far Keane CJ’s
observations can be taken, it is relevant to note that his Honour likely made his
observations with knowledge of Rares J’s dissenting reasons, which referred directly
to Brandy.
In Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] 183 ACTLR 245, Lee J as part of the Full Court of the Australian Capital Territory, was dealing with issues concerning the Australian Capital Territory equivalent to the BIF Act. In the
context of addressing an argument that an adjudication decision was “final” because
it was “immediately enforceable” as a judgment under their s 27[72] as a result of its
[72] The equivalent of s 93 of the BIF Act.
filing, he expressed the view that this argument was “unsustainable”.
His Honour observed that to read s 27 as conferring adjudication certificates with the colour of judicial power once filed and enforced as a judgment was to overlook the force of s 38: see Birdon (at [53] per Keane CJ).
These authorities are consistent with a recognition that merely because there is a binding determination, that does not automatically render the determination as final and authoritative. The adjudicator has the authority to determine the:

(a) amount of the progress payment (if any) to be paid by the respondent to the claimant;
(b) date on which any such amount became or becomes payable; and
(c) rate of interest payable on any such amount.[73]
[73] Birdon Pty Ltd v Houben Marine Pty Ltd & Ors (2011) 197 FCR 25 at [148] per Buchanan J.
[324] However, s 101 in clear terms makes clear that the decision is not final and authoritative and is subject to challenge in later curial proceedings.

To paraphrase Buchanan J, s 93 confines the operation of an adjudication certificate as a judgment (when filed) to the unpaid portion of the adjudicated amount. Section 101(3) directs that in any civil proceeding in relation to any matter arising under a construction contract, any amount paid must be allowed for and permits restitution of any such amount if appropriate. In this way, the statutory scheme seems to confine its intended operation to the establishment of an administrative procedure
concentrated upon the time and recovery of a claimed, upheld and unpaid “progress payment”, without any payment made in response to a claim or an adjudication
becoming legislatively fixed, unreviewable or irrecoverable in due course. The scheme bears all the hallmarks of an administrative arrangement for a speedy adjudication which will operate without prejudice to ultimate legal rights and, to the extent necessary, on an interim basis.[74]
[74] Birdon at [154].
I do not accept Lendlease’s submission that the adjudication decision is not only

binding but it is authoritative and determinative of a unique statutory entitlement in
itself.

That submission was advanced on the basis that a unique statutory entitlement is created under the BIF Act regime. Lendlease described it as the statutory entitlement identified in s 3(2)(b) and s 70 of the BIF Act to a progress payment. The argument is that the adjudication decision is not only binding but it is also final and determinative of the existence and content of that unique statutory entitlement.

[328] I reject that submission. An adjudication decision cannot be divorced from the underlying contract and its performance between the parties. Whilst it can be accepted that the BIF Act provides a statutory right to claim for a progress payment beyond the contract (eg by statutory based reference dates), it does not alter the fundamental basis of the statutory process being founded on the existence and performance of a construction contract. The adjudication decision, even when registered as a judgment in no way determines underlying rights derived from the existence and performance by the parties of the construction contract. The certificate registered as a judgment in no way creates a final or authoritative determination of the things which substantially underpin the adjudication decision. Section 101 of the BIF Act ensures that the underlying substance of an adjudication decision will remain subject to challenge in later curial proceedings, and interim in nature.

As a result of my answer to this issue, I have not had to deal with the detailed submissions which were made as to whether s 4(5) of the CPAL Act would have resulted in only certain sections being disapplied, or alternatively the whole of the BIF Act being disapplied.
Conclusion
In conclusion, as a result of the reasons set out above, Lendlease has not succeeded in its application to set aside the adjudication application. Lendlease is not entitled to the injunction which it seeks.
There had been submissions made on the potential to sever parts of the adjudication decision pursuant to s 101(4) of the BIF Act. It has been unnecessary to consider such submissions in light of my conclusions to the various issues.
Accordingly, the application ought to be dismissed.
On the issue of costs, I will hear the parties further on what is the appropriate costs order. In addition, it is my understanding that there has been monies previously paid into Court. I will hear the parties in relation to any consequential orders which flow from these reasons.

AN
N
EXU
R
E "A"

[104], with that portion of her Honour’s reasoning being accepted by Holmes CJ at [3] and White JA
at [7]. In that case, the excluded work under s 65(3) of the BIF Act was not found to be a jurisdictional constraint and did not give rise to a jurisdictional fact. Whether and to what extent the work claimed came within the s 65(3) exclusion was ultimately a question for the adjudicator to determine within the scope of his or her jurisdiction.

Ltd [2024] QCA 94 at [24], per Dalton JA with whom the other members agreed; see also KDV Sport
Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178 per Brown J.
become payable under the subcontract”, and cl 22.2(c)(iv) which provides for a payment claim to
contain “any other amounts to which the subcontractor is then entitled to under the subcontract.”
South Australia & Anor (2012) 249 CLR 398 at [56].
at pp 81-82.

CITATION:	Lendlease Building Pty Ltd v BCS Airport Systems Pty Ltd &
Ors [2024] QSC 164
PARTIES:	LENDLEASE BUILDING PTY LTD
(plaintiff)
v BCS AIRPORT SYSTEMS PTY LTD
(first defendant) AND
JOHN TUHTAN
(second defendant) AND
REGISTRAR APPOINTED UNDER S 150 OF THE BUILDING INDUSTRY FAIRNESS (SECURITY OF PAYMENT) ACT 2017 (QLD)
(third defendant)
FILE NO:	2108 of 2023
DIVISION:	Trial Division
PROCEEDING:	Trial
ORIGINATING	Supreme Court at Brisbane
COURT:
DELIVERED ON:	30 July 2024
DELIVERED AT:	Brisbane
HEARING DATE:	12 and 13 June 2023
JUDGE:	Sullivan J
ORDER:	The application is dismissed.

COUNSEL:	P Franco KC and D Hume for the plaintiff G Beacham KC and D Byrne for the first defendant GJ Del Villar KC S-G and FJ Nagorcka for the Attorney- General (Qld)
SOLICITORS:	Baker McKenzie for the plaintiff Holding Redlich for the first defendant Crown Law for the Attorney-General (Qld)
Introduction

Clause	Term	Particulars
…
1.1	Date for Practical	Head Contract Project Dates for
Completion	Practical Completion are
Separable Portion 1 - 18/3/2021
Separable Portion 2 - 20/5/2021
…

Item	Description	Price
1	Preliminaries (Site establishments, amenities, site
sheds, hoarding, Permits, Survey etc.) & Project
Management Costs

1.1	Project Setup	$41,637.00
1.2	Project and Site management (incl program integration	$690,528.00

1.4	Training and Manuals	$17,845.00
1.5	Removal of redundant equipment / Demolition	$17,845.00
1.6	Spare Parts	$35,689.00
1.7	Provide Fully enclosed cable tray	$13,700.00

2.1	Design	$23,198.00
2.2	Mechanical	$378,901.00
2.3	Electrical	$278,376.00
2.4	Controls Software (PLC/MDS)	$54,129.00
2.5	FAT/SAT Testing & Commissioning	$38,663.00

3.1	Design	$26,767.00
3.2	Mechanical	$401,504.00
3.3	Electrical	$285,513.00
3.4	Controls Software (PLC/MDS)	$44,612.00
3.5	Catwalk/BHS Supporting Structure	$89,223.00
3.6	FAT/SAT Testing & Commissioning	$44,612.00
3.7	Start stop controls on crossovers	$23,025.00

4.1	Design	$19,629.00
4.2	Mechanical	$314,065.00
4.3	Electrical	$235,549.00
4.4	Controls Software (PLC/MDS)	$52,344.00
4.5	FAT/SAT Testing & Commissioning	$32,716.00
4.6	Other (anti fatigue matting)	$14,625.00

6.1	Design	$1,784.00
6.2	Mechanical	$29,146.00
6.3	Electrical	$21,414.00
6.4	Controls Software (PLC/MDS)	$4,164.00
6.5	FAT/SAT Testing & Commissioning	$2,974.00

7.1	Design	$30,336.00
7.2	Steelwork Supply	$616,829.00
7.3	Installation	$364,030.00
7.4	Additional cost for the mezzanine as per AvLogix	$282,927.00

8.1	Preliminaries	$38,663.00
8.2	HLC Software Supply (incl Sym 3 product tracking)	$39,226.00
8.3	Hardware	$65,430.00
8.5	PLC -> HLC Messaging Upgrade	$83,275.00
8.6	FAT/SAT Testing & Commissioning	$56,508.00
8.7	CBS Verification Testing	$29,741.00
8.8	OEM versions of MS Server 2016 and SQL Server 2016	$25,853.00

9.1	Design	$7,733.00
9.2	Mechanical	$54,129.00
9.3	Electrical	$40,210.00
9.4	Controls Software (PLC/MDS)	$7,733.00
9.5	Catwalk/BHS Supporting Structure	$37,117.00
9.6	FAT/SAT Testing & Commissioning	$7,731.00

10.1	Design	$2,974.00
10.2	Mechanical	$19,034.00
10.3	Electrical	$14,871.00
10.4	Controls Software (PLC/MDS)	$4,759.00
10.5	Catwalk/BHS Supporting Structure	$14,871.00
10.6	FAT/SAT Testing & Commissioning	$2,974.00

SEPARABLE PORTION 2 (SP2) TOTAL	$214,136.00
TOTAL SUBCONTRACT SUM	$6,359,889.00

(a)	whether written or oral, or partly written and partly oral; and
(b)	whether expressed to be governed by the law of Queensland or a jurisdiction other than Queensland; and
(c)	whether entered into before or after the commencement of this section, other than to the extent the repealed Building and Construction Industry Payments Act 2004 continues to apply to unfinished matters under section 205.

(a)	who holds, or should hold, an owner-builder permit under the Queensland Building and Construction Commission Act 1991 relating to the work; or
(b)	who is a building contractor within the meaning of the Queensland Building and Construction Commission Act 1991.

(a)	the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures, whether permanent or not, forming, or to form, part of land;
(b)	the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for land drainage or coast protection;
(c)	the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems;
(d)	the external or internal cleaning of buildings, structures and works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension;
(e)	any operation that forms an integral part of, or is preparatory to or is for completing, work of the kind referred to in

(a)	the drilling for, or extraction of, oil or natural gas;
(b)	the extraction, whether by underground or surface working, of minerals, including tunnelling or boring, or constructing underground works, for that purpose.

(a)	identifies the construction work or related goods and services to which the progress payment relates; and
(b)	states the amount (the *claimed amount*) of the progress payment that the claimant claims is payable by the respondent; and
(c)	requests payment of the claimed amount; and
(d)	includes the other information prescribed by regulation.

(a)	the respondent is liable to pay the claimant under section 98(3); or
(b)	is held under the construction contract by the respondent and that the claimant claims is due for release.