Paladin Projects Pty Ltd v Visie Three Pty Ltd

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SUPREME COURT OF QUEENSLAND

CITATION: Paladin Projects Pty Ltd v Visie Three Pty Ltd & Ors [2024] QSC 230
PARTIES:

PALADIN PROJECTS PTY LTD ACN 604 051 578

(applicant)
v

VISIE THREE PTY LTD ACN 601 326 667

(first respondent)

NANCY ALEXANDER (ADJUDICATION REGISTRAR)

(second respondent)

DAVID ROBERT THOMAS SEENEY (ADJUDICATOR J1261305)

(third respondent)

FILENO/S: BS No 6272 of 2024

DIVISION:

Trial Division

PROCEEDING: Originating Application
ORIGINATING COURT: Supreme Court at Brisbane
DELIVEREDON: 25 September 2024
DELIVEREDAT: Brisbane
HEARINGDATE: 19 June 2024
JUDGE: Williams J
ORDERS:

1.   The parties are directed to agree an order reflecting these reasons and provide it to the Associate to Williams J by 2 October 2024.

2.   If an order cannot be agreed, both parties are directed to provide their proposed order, together with an explanation for the differences of no more than 2 pages, to the Associate to Williams J by 2 October 2024.

3.   I will hear from the parties as to costs after the order has been made.

CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where the

applicant, as a contractor, entered into a construction contract with the first respondent, as principle – where the applicant lodged an adjudication application in respect of a Payment Claim – where the applicant seeks judicial review of the adjudicator’s decision – whether parts of the adjudication decision are affected by jurisdictional error – whether the adjudicator considered new reasons for withholding payment in contravention of s 88(3)(b) – whether the adjudicator considered material outside the statutory limitation in s 88(2) – whether the adjudicator’s decision denied the applicant natural justice – whether it was established on the evidence that there was a realistic possibility the adjudicator would have made a different decision – whether orders that the identified parts of the adjudication decision be severed pursuant to s 101(4) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld)

ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – JURISDICTIONAL MATTERS

– where the applicant, as a contractor, entered into a construction contract with the first respondent, as principle – where the applicant lodged an adjudication application in respect of a Payment Claim – where the applicant seeks judicial review of the adjudicator’s decision – whether parts of the Adjudication Decision are affected by jurisdictional error and are void with the balance of the adjudication decision to remain binding on the parties to the proceeding

Building Industry Fairness (Security of Payment) Act 2017

(Qld), s 82(3)-(5), s 88(3)(b), s 101(4)

Building and Construction Industry (Portable Long Service Leave) Act 1991(Qld) s 75,

Queensland Building and Construction Commission Act 1991

(Qld) s 68B, s 70

Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd [2020] QSC 133, followedNorthbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty Ltd [2015] 1 Qd R 463, applied
The Minister for Commerce v Contrax Plumbing (NSW)…

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Details
Case
[2024] QSC 230
Decision Date

CaseChat Overview and Summary

Paladin Projects Pty Ltd, the Applicant, has sought judicial review of an adjudication decision rendered on 7 May 2024, by the Third Respondent, the Adjudicator, in relation to a construction contract with Visie Three Pty Ltd, the First Respondent. The Applicant claims that specific parts of the adjudication decision are void due to jurisdictional errors and seeks orders for severance of these parts or, alternatively, for the entire decision to be set aside. The Second Respondent, the Adjudication Registrar, and the Third Respondent did not participate in the hearing but have indicated they will abide by the court's order, except for potential costs. The First Respondent opposes the application, arguing that the adjudication decision is valid.

The legal issues the court was required to decide included whether parts of the adjudication decision were affected by jurisdictional error, specifically whether the Adjudicator considered new reasons for withholding payment in contravention of s 88(3)(b) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld), whether the Adjudicator considered material outside the statutory limitations in s 88(2), and whether the Adjudicator's decision denied the Applicant natural justice. The Applicant argued that the decision on liquidated damages, Variation 60, and Variation 62 contained jurisdictional errors. The First Respondent contended that any errors did not affect the outcome and that the Adjudicator's decision on Variation 62 was not a breach of natural justice.

The court examined the statutory framework and the Adjudicator's reasoning in the adjudication decision. It found that the Adjudicator had indeed considered new reasons for withholding payment in relation to Variation 60, which was a jurisdictional error under s 88(3)(b) of the BIF Act. Additionally, the consideration of the Building and Construction Industry (Portable Long Service Leave) Act 1991 and Part 5 of the Queensland Building and Construction Commission Act 1991 in relation to Variation 62 constituted a jurisdictional error as it exceeded the statutory limitations in s 88(2). However, the court found no substantial breach of natural justice regarding the decision on liquidated damages as the First Respondent had not demonstrated a realistic possibility that the outcome would have been different had the Applicant had the opportunity to make further submissions. Consequently, the court found that the parts of the adjudication decision concerning Variation 60 and Variation 62 were void due to jurisdictional errors, while the balance of the decision remained binding.

The court ordered the parties to agree on an order reflecting these reasons and provide it to the Associate to Williams J by 2 October 2024. If an agreement cannot be reached, the parties must submit their proposed orders with explanations for the differences, no longer than two pages, by the same date. The court will address costs after the order has been made.

Orders

Orders of the court

1. The parties are directed to agree an order reflecting these reasons and provide it to the Associate to Williams J by 2 October 2024.

2. If an order cannot be agreed, both parties are directed to provide their proposed order, together with an explanation for the differences of no more than 2 pages, to the Associate to Williams J by 2 October 2024.

3. I will hear from the parties as to costs after the order has been made.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Applicant seeks judicial review of an adjudication decision made on 7 May 2024 (Adjudication Decision) by the Third Respondent, the Adjudicator. The Second Respondent is the Adjudication Registrar. The Applicant applies for:(a)declarations that parts of the Adjudication Decision are affected by jurisdictional error and are void (being the parts of the Adjudication Decision deciding liquidated damages, Variation 60 and Variation 62) and that the balance of the Adjudication Decision remains binding on the parties to the proceeding.(b)orders that the identified parts of the Adjudication Decision be severed pursuant to s 101(4) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act). Alternatively, the Applicant seeks an order that the Adjudication Decision be set aside. The Second and Third Respondents did not participate in the hearing on the basis that they abide the order of the Court and were excused from attending the hearing of the application save as to the issue of costs, should it arise. The First Respondent opposes the application and submits that the Adjudication Decision is not affected by jurisdictional error. On 7 December 2023, the Applicant made Payment Claim 23 (Payment Claim) claiming a progress payment of $1,467,850.36 (excluding GST). On 21 December 2023, the Superintendent issued a Payment Certificate in respect of Payment Claim 23 (Payment Schedule). On 20 February 2024, the Applicant lodged an adjudication application in respect of Payment Claim and on 28 February 2024 the adjudication application was referred to the Third Respondent (Adjudication Application). On 7 May 2024, the Third Respondent published the Adjudication Decision. The Applicant now seeks to challenge the Adjudication Decision on the basis that the parts of the Adjudication Decision deciding liquidated damages, Variation 60 and Variation 62 are affected by jurisdiction error and are void. The jurisdictional error alleged by the Applicant in respect of each of the three parts is different, namely:(a)In respect of Variation 60 – jurisdictional error by a contravention of s 88(3)(b) of the BIF Act. That is, the Third Respondent considered “new reasons” for withholding payment within s 82(4) of the BIF Act, contrary to the prohibition in s 88(3)(b) of the BIF Act.(b)In respect of Variation 62 – jurisdictional error by a contravention of s 88(2) of the BIF Act. That is, the Third Respondent considered the Building and Construction Industry (Portable Long Service Leave) Act 1991 (Leave Act) and Part 5 of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) which were outside the limited matters listed in s 88(2) of the BIF Act.(c)In respect of liquidated damages – jurisdictional error by a substantial breach of natural justice. In respect of Variation 62, the First Respondent contends that it is more properly characterised as the Third Respondent making the decision on a basis for which neither party contended, thereby constituting a denial of natural justice. Further, the First Respondent contends that had the Applicant had the opportunity to lead further evidence and or make further submissions, there is not a realistic possibility that the Third Respondent would have made a different decision.

Ratio Decidendi

Legal Principle Established

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