S.H.A. Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd

S.H.A. Premier Constructions Pty Ltd (SHA) and Niclin Constructions Pty Ltd (Niclin) were engaged in three contracts for the construction of petrol stations. Following the termination of these contracts, Niclin initiated court proceedings and pursued relief under the Building Industry Fairness (Security of Payment) Act 2017 (Qld). The primary legal issues centred on the adjudication of payment claims, particularly whether the adjudicator erred in deciding that Niclin’s applications were not vexatious, and if the adjudicator misconceived his function by determining that Niclin was entitled to claim retention moneys. SHA argued that the adjudicator's decision to include retention moneys as part of the final payment claim was not supported by the contract and thus constituted a jurisdictional error. Additionally, SHA contended that the adjudicator's oversight in not valuing certain defects amounted to a jurisdictional error or an erroneous omission within jurisdiction.

The court examined the statutory framework provided by the Building Industry Fairness (Security of Payment) Act 2017 (Qld), specifically section 88, which outlines the adjudicator's role and limitations in deciding payment claims. The court considered whether the adjudicator's jurisdiction was contingent on the adjudicator deciding that the application was not vexatious, or if it was a factual determination. The court also assessed whether the adjudicator's failure to value certain defects constituted a jurisdictional error or an accidental omission. The court concluded that the adjudicator's role was not to reach the objectively correct conclusion but rather to exercise the jurisdiction validly, and that the failure to value certain defects did not necessarily amount to a jurisdictional error.

The court dismissed SHA’s amended originating application filed on 28 May 2020, holding that the adjudicator's decisions were within their jurisdiction. The court noted that the adjudicator's oversight in not valuing certain defects did not amount to a jurisdictional error, and that the inclusion of retention moneys was permissible under the contract. The court also found that the adjudicator's determination that Niclin's applications were not vexatious was a matter of fact, not jurisdiction. The court reserved the matter of costs for further discussion between the parties.