Tomkins Commercial & Industrial Builders Pty Ltd v York Property Holdings Pty Ltd - [2025] QSC 261

SUPREME COURT OF QUEENSLAND

CITATION:

Tomkins Commercial & Industrial Builders Pty Ltd v York Property Holdings Pty Ltd [2025] QSC 261

PARTIES:

TOMKINS COMMERCIAL & INDUSTRIAL BUILDERS PTY LTD
ABN 98 061 732 778

(applicant)

v
YORK PROPERTY HOLDINGS PTY LTD as trustee for YORK PROPERTY TRUST
ABN 94 831 587 168

(first respondent)
RICHARD ATKIN, ADJUDICATOR J1182971
(second respondent)
THE ADJUDICATION REGISTRAR (QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION)

(third respondent)

FILE NO/S:

14068 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

17 October 2025

DELIVERED AT:

Brisbane

HEARING DATE:

5 June 2025; 6 June 2025

JUDGE:

Crowley J

ORDERS:

1.   I declare paragraphs [99] to [110] of the adjudication decision of the second respondent dated 22 September 2024 and numbered 2602454 (Second Adjudication Decision) in respect of the estimated cost of rectifying purportedly defective work in respect of the building façade carried out under the construction contract between the applicant and the first respondent executed 12 August 2021 are affected by jurisdictional error and are void.

2. Pursuant to s 101(4) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld):

a.   paragraphs [99] to [110] of the Second Adjudication Decision are severed from the decision;

b.   the value of the deduction for the alleged defective façade works referred to in those paragraphs is reduced to $nil;

c.   the adjusted amount payable by the First Respondent to the Applicant under the Second Adjudication Decision of the Second Respondent is increased by $4,764,178.27 (incl. GST) to $6,161,488.27 (incl. GST) (this is the adjudicated amount plus the $4,764,178.27 incl GST).

3.   The balance of the application filed 18 October 2024 is dismissed.

4.   I will hear the parties on the question of costs.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay two payment claims submitted by the applicant so the applicant referred both of those disputes to an adjudicator – where the applicant claims in respect of the first adjudication decision that the respondent provided new reasons to the adjudicator which were not included in the payment schedule – whether new reasons were provided, whether the adjudicator considered them, and whether the adjudicator breached s 88(3)(b) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) by considering them – whether jurisdictional error is established
ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – PROCEDURAL FAIRNESS – GENERALLY – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay two payment claims submitted by the applicant so the applicant referred both of those disputes to an adjudicator – where the applicant claims that in respect of both adjudication decisions, the adjudicator failed to consider its submissions including the material referred to and attached to its submissions – whether the adjudicator failed to consider the applicant’s submissions and thereby denied it procedural fairness – whether jurisdictional error is established on this ground
ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – RELEVANT CONSIDERATIONS – FAILURE TO CONSIDER – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay two payment claims submitted by the applicant so the applicant referred both of those disputes to an adjudicator – where the applicant claims in respect of both adjudication decisions that the adjudicator failed to consider the provisions of the contract– whether the adjudicator considered the provisions of the contract and whether jurisdictional error is established

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – DEDUCTIONS – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay a payment claim submitted by the applicant on the basis that the works did not comply with the contract and required rectification to the extent that the deductions for rectification equalled the amount claimed by the applicant for works completed – where the applicant referred this dispute to an adjudicator – where the adjudicator accepted the respondent’s submission that the cost of rectification was equal to the amount claimed for works completed by the applicant – where the applicant claims that the adjudicator’s decision was illogical, perverse and incoherent because of its method of valuing the rectification works – whether the adjudicator fell into jurisdictional error by valuing the deductions for rectification in the manner that he did

Building Industry Fairness (Security of Payment) Act 2017 (Qld), s 72(1), s 88

Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd (2020) 4 QR 410; [2020] QSC 133, applied
Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215, applied
John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19, considered
Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140, cited
Prime Constructions (Qld) Pty Ltd v HPS (Qld) Pty Ltd [2019] QSC 301, cited
Wiggins Island Coal Terminal Pty Ltd v Monadelphous Engineering Pty Ltd [2015] QSC 307, cited

COUNSEL:

D S Piggott KC, with J E Menzies, for the applicant
M D Ambrose KC, with T W Ambrose, for the first respondent
No appearances for the second and third respondents

SOLICITORS:

Thomson Geer for the applicant
Holding Redlich for the first respondent
No appearances for the second and third respondents

The applicant (Tomkins) and the first respondent (York) are parties to a commercial contract for the construction of the ‘Midwater’ residential apartment tower located at 3496 Main Beach Parade, Main Beach, Queensland. York is the principal of the project. Tomkins is the head contractor.
In accordance with the contract and the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the BIF Act), York was obliged to make progress payments to Tomkins for completed construction work carried out under the contract. The process for payment of progress claims required Tomkins to first submit to York a payment claim setting out the details of the work carried out and the amount claimed. York would then provide a progress certificate, certifying the amount that it would pay. For the purposes of the BIF Act, the progress certificate doubled as, and formed part of, York’s payment schedule in response to Tomkins’ payment claims.
Under the contract, York was obliged to appoint a Superintendent who would act as its agent in respect of the project. The functions to be performed by the Superintendent included giving directions to contractors in relation to work to be carried out on the project, addressing any issues raised by contractors with respect to design documentation and specifications for works to be undertaken, the inspection of completed works to ensure that they complied with contract requirements, and the certification of the amounts payable in respect of progress claims submitted by Tomkins. York appointed Crest Project Management Pty Ltd as its Superintendent.
Although progress payments were claimed and paid throughout the course of the contract, the parties became embroiled in disputes over two particular progress payment claims submitted by Tomkins. Tomkins claimed it had completed works that entitled it to be paid the amounts set out in its payment claims. York denied Tomkins was entitled to claim the full amounts sought and refused to certify payment. It maintained that Tomkins had either not completed the works in accordance with the contract as claimed, or that the work was defective in certain respects, and that it was therefore entitled to withhold payment of certain amounts. Because the parties were unable to resolve their differences, Tomkins applied for adjudication of the disputes under the provisions of the BIF Act.
At the centre of the disputes between the parties is disagreement as to whether any of the work is defective, which of them has design responsibility for certain works under the contract, and which of them is to blame for delays caused by the need to undertake rectification works due to design faults. Each of these matters were raised by Tomkins in its applications for adjudication. Amongst other things, Tomkins complained that York’s Superintendent had wrongly assessed certain works as defective or not being completed in accordance with the contract, resulting in York refusing to certify parts of its claims for progress payments. It contended that there was no basis under the contract for the Superintendent to withhold the claimed payments.
The Second Respondent, Mr Richard Atkin, was the appointed adjudicator (Adjudicator) for both applications. He gave his first adjudication decision on 1 August 2024 (First Adjudication Decision) and his second decision on 22 September 2024 (Second Adjudication Decision).
The Third Respondent is the Adjudication Registrar. Each of the Second and Third Respondents adopted abiding positions and the appearance of each at the hearing was excused.
Tomkins challenges certain parts of the two adjudication decisions. It claims they are affected by jurisdictional error. The alleged jurisdictional errors are identified, by number, and briefly particularised in an aide memoire document provided by Tomkins at the hearing.[1] Some of the original allegations of jurisdictional error were not pressed. What remains for consideration are a series of alleged jurisdictional errors in the Adjudicator’s approach to the deductions applied by York and to his valuation of the work carried out under the contract.
[1]Marked for identification “A”.
Tomkins seeks declarations that the particular parts of the adjudication decisions it identifies are affected by jurisdictional error; and consequent orders under s 101(4) of the BIF Act severing those parts of the adjudication decisions and adjusting the amounts payable. It otherwise submits that the balance of the adjudication decisions which are not affected by jurisdictional error should remain in full force and effect.
York does not dispute the court’s jurisdiction or power to make the orders sought if Tomkins establishes material jurisdictional error. However, it maintains that none of the alleged jurisdictional errors were committed by the Adjudicator and the application should be dismissed in its entirety.
Tomkins’ claims of jurisdictional error are detailed and multi-faceted and rely upon the interpretation and application of certain clauses of the contract. It will therefore be necessary to set out and examine its specific claims in respect of each of the two adjudication decisions in detail, and within the context of the adjudication application process under the BIF Act, in order to assess whether they are affected by jurisdiction error as Tomkins contends.
The BIF Act
The main purpose of the BIF Act is stated in s 3(1) of the Act as “…to help people working in the building and construction industry in being paid for the work they do.” Amongst other things s 3(2)(b) and (c) provide that the main purpose of the Act is to be achieved primarily by granting an entitlement to progress payments, whether or not the relevant contract makes provision for progress payments; and by establishing a procedure for making payment claims, responding to payment claims, the adjudication of disputed payment claims, and the recovery of amounts claimed.
Chapter 3 of the BIF Act (ss 61 to 102) deals with progress payments. Section 70 provides that from each reference date under a construction contract a person is entitled to a progress payment if the person has carried out construction work under the contract. Section 71 provides that the amount of a progress payment to which a person is entitled is either, if the contract provides for the matter, the amount calculated in accordance with the contract; or, if the contract does not provide for the matter, the amount calculated on the basis of the value of construction work carried out in accordance with the contract. Section 72(1) provides for how the value of construction work carried out under a construction contract is to be valued. If the contract provides for the matter, then under s 72(1)(a), the work is to be valued in accordance with the contract. If it does not provide for the matter, then under s 72(1)(b) the work is to be valued having regard to various matters, including under s 72(1)(b)(iv) “if any of the work is defective, the estimated cost of rectifying the defect”.
Part 3 of Chapter 3 deals with claiming progress payments. Amongst other things, it provides for the making of a progress claim, by a person giving a payment claim to the person who is, or may be, liable under the relevant construction contract to make the payment (s 75); and responding to a payment claim, by the respondent giving the claimant a payment schedule (s 76). Strict time limits apply for a respondent to provide a payment schedule. If a respondent fails to do so within the prescribed time, the respondent is liable to pay the full amount claimed under the payment claim (s 77).
Part 4 of Chapter 3 deals with adjudication of disputed progress payments. Under s 79(1), a claimant may apply to the Adjudication Registrar for adjudication of a payment claim if the respondent fails to pay the respondent an amount owed to the claimant by the due date for payment; or where the amount stated in a payment schedule given in response to a payment claim is less than the amount stated in the payment claim. Section 79(2) stipulates the form and content requirements of an adjudication application and the time within which it must be made. Where such an application is made and the matter is referred to adjudication by the Adjudication Registrar, an adjudicator is to be appointed in accordance with s 81.
Once a respondent is given notice that an adjudication application has been accepted by the appointed adjudicator, s 82(1) provides that the respondent may give the adjudicator an adjudication response. Section 82(3) stipulates the form and content requirements of an adjudication response. Importantly, s 82(4) provides that the adjudication response “must not include any reasons (new reasons) for withholding payment that were not included in the payment schedule when given to the claimant.” Section 83 provides the time limits within which an adjudication response must be provided. For a complex payment claim, such as the subject claims here, s 83(2) provides that the adjudication response must be given within the later date of either 15 business days after being served with notice of the adjudication application, or 12 business days after receiving notice of the adjudicator’s acceptance of the adjudication application. Section 83(3) permits a respondent to apply to the adjudicator for an extension, of up to 15 additional business days, for giving their adjudication response.
The clear legislative intent of the BIF Act, evinced by the express statement in s 84(1) is that, subject to s 85, adjudication applications will be decided as quickly as possible. Relevantly, s 85(1) provides that, subject to any extension of time determined by the adjudicator in accordance with s 86, an adjudication application for a complex claim must ordinarily be decided no later than 15 business days after the adjudicator is given an adjudication response.
The key provision with respect to an adjudicator’s decision on an adjudication application is s 88. It relevantly states:
88Adjudicator’s decision
(1)An adjudicator is to decide—
(a)     the amount of the progress payment, if any, to be paid by the respondent to the claimant (the adjudicated amount); and
(b)     the date on which any amount became or becomes payable; and
(c)     the rate of interest payable on any amount.
(2)In deciding an adjudication application, the adjudicator is to consider the following matters only—
(a)     the provisions of this chapter and, to the extent they are relevant, the provisions of the Queensland Building and Construction Commission Act 1991, part 4A;
(b)     the provisions of the relevant construction contract;
(c)     the payment claim to which the application relates, together with all submissions, including relevant documents, that have been properly made by the claimant in support of the claim;
(d)     the payment schedule, if any, to which the application relates, together with all submissions, including relevant documents, that have been properly made by the respondent in support of the schedule;
(e)     the results of any inspection carried out by the adjudicator of any matter to which the claim relates.
(3)However, the adjudicator must not consider any of the following—
(a)     an adjudication response, to which the adjudication application relates, that was not given to the adjudicator within the time required under section 83;
(b) a reason included in an adjudication response to the adjudication application, if the reason is prohibited from being included in the response under section 82.
(4)Also, the adjudicator may disregard an adjudication application or adjudication response to the extent that the submissions or accompanying documents contravene any limitations relating to submissions or accompanying documents prescribed by regulation.
(5)The adjudicator’s decision must—
(a)     be in writing; and
(b)     include the reasons for the decision, unless the claimant and the respondent have both asked the adjudicator not to include the reasons in the decision.
…
The BIF Act creates a “parallel regime”, separate to any contractual rights available to a party, to ensure prompt payment of progress payments and the speedy resolution, via adjudication, of any disputes about the amounts payable.[2] In that regard, s 101 provides:
[2]Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340, [3]-[4]; All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289, [8]-[9].
101Effect of pt 3 on civil proceedings
(1)Subject to section 200, nothing in this chapter affects any right that a party to a construction contract—
(a)     may have under the contract; or
(b)     may have under part 2 in relation to the contract; or
(c)     may have apart from this chapter in relation to anything done or omitted to be done under the contract.
(2)Nothing done under or for this chapter affects any civil proceedings arising under a construction contract, whether under this chapter or otherwise, except as provided by subsection (3).
(3)In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal—
(a)     must allow for any amount paid to a party to the contract under or for this chapter in any order or award it makes in those proceedings; and
(b)     may make the orders it considers appropriate for the restitution of any amount so paid, and any other orders it considers appropriate, having regard to its decision in the proceedings.
(4)If, in any proceedings before a court in relation to any matter arising under a construction contract, the court finds that only a part of an adjudicator’s decision under this chapter is affected by jurisdictional error, the court may—
(a)     identify the part affected by the error; and
(b)     allow the part of the decision not affected by the error to remain binding on the parties to the proceeding.

Section 200 prohibits the contracting out of any provisions of the BIF Act and provides that the provisions of the Act will have effect despite any provision to the contrary in any contract, agreement or arrangement.
Jurisdictional error – legal principles
The general principles applicable to an application of the present kind were comprehensively surveyed and summarised by Bond J (as his Honour then was) in Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd (2020) 4 QR 410, at [22] to [42] (Acciona). Subject to what I consider to be the preferred approach to the question of whether an adjudicator failed to “consider” a matter under s 88(2), in accordance with the decision of the New South Wales Court of Appeal in Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225 (Ceerose), I otherwise adopt and apply Bond J’s summary of principles in Acciona in determining the present application.
Because of its relevance to many of the arguments raised in this case, I set out the following matters summarised in Acciona, at [35]:
“…the valid exercise of an adjudicator’s jurisdiction is conditioned on the adjudicator having arrived at his or her conclusion by a process which considers the matters set out in s 88(2) of the Payment Act. But as to this, the following important matters must be noted:
(a)The valid exercise of an adjudicator’s jurisdiction is not conditioned on the adjudicator reaching what is objectively the correct conclusion on all of the questions of fact or law required by the consideration of the matters set out in s 88(2). Or, to put it another way, there are many errors of fact and law which might be made by an adjudicator which would not be regarded as going to jurisdiction.
(b)On an application to set aside an adjudicator’s decision for jurisdictional error, the question is not whether the Court would have come to the same conclusion as the adjudicator. Rather, the question is whether the adjudicator arrived at his or her conclusion by a process which failed to consider the matters set out in s 88(2).
(c) This point was succinctly made in Northbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty Ltd [2015] 1 Qd R 463, 469–470 [29], where McMurdo J pointed out (footnotes in original):
‘To determine an application, an adjudicator must identify the relevant terms of the contract upon which the claim is made and then apply the facts, as he or she finds them to be, to those terms upon their proper interpretation. The identification of the terms and the interpretation of those terms are thereby questions which the adjudicator must answer in the exercise of his jurisdiction. It follows that an error in the identification of the terms or in their interpretation will not be a jurisdictional error: Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd; Clyde Bergemann Senior Thermal Pty Ltd v Varley Power Services Pty Ltd; BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd.’
(d)His Honour distinguished between that sort of error – which was not jurisdictional error – and that which was, in the following passage ([2015] 1 Qd R 463, 470 [30]):
‘However, where it appears that an adjudicator is not meaning to apply the contract, as he or she interprets it, but is instead allowing the claim upon some other basis, the position is different, because the adjudicator is thereby misunderstanding the scope of the adjudicator’s jurisdiction.’
(e)Adjudicators under the Payment Act do not have to get the answer right, but if it is demonstrated that they have not gone about their task by carrying out the active process of intellectual engagement with the issues and the submissions before them that the Payment Act requires, then they will have fallen into jurisdictional error because they will not have done the very thing s 88(2) of the Payment Act required them to do.”
As I will discuss, the phrase “active process of intellectual engagement” appearing in the last subparagraph of the above excerpt is one of the permutations of the statutory language that the Court eschewed in Ceerose.
The First Adjudication Decision
On 28 March 2024, Tomkins gave York Payment Claim No. 30, in which it claimed payment for work carried out under the contract in the amount of $13,469,098.11 (excl. GST).
In response, on 15 April 2024, York gave Tomkins Payment Schedule No. 30, which scheduled the amount of $416,681.40 (excl. GST) for payment to Tomkins. York’s covering letter for Payment Schedule No. 30, relevantly stated:
“Defective Works / Work not in accordance with Contract
oWe have included deductions as per the appended schedule for completed works which are not in accordance with the Contract.
oWe note that SI 170/SI170A and the associated Scott Schedules covers defective works and works not in accordance with the Contract. We further note that this schedule is not a final position, or limitation to works which may reasonably [sic. be] considered as defective or not in accordance with the Contract.
oMechanical plant rooms have not been constructed as directed. Refer SI85, SI96, SI101 Subducts have also been installed without shop drawings being prepared and/or approved.
oThe Principal also considers the works to be defective and not in accordance with the Contract as per its notifications to the Contractor on 5 April 2024 and 8 April 2024.
oThe Principal has incurred direct costs in the form of Architectural fees in connection with the Contractor’s failure to comply with the requirements of the Architectural Specification. These reasonable costs have been deducted in this assessment.”
By the First Adjudication Decision, the Adjudicator decided that the amount payable in respect of Payment Claim No. 30 was $4,072,889.77 (incl. GST).
Although Tomkins had maintained that it did not agree at all with Payment Schedule No. 30, it had only applied for adjudication in relation to deductions made by York totalling $542,599.04. Payment Schedule No. 30 noted that these deductions were made for “defective works” or “works not in accordance with the contract” and attached schedules detailing the subject works and the costs it claimed it had incurred, or that it estimated it would incur, as a result of those works. The particular items set out in the “Works Not In Accordance With Contract” schedule attached to, and forming part of, Payment Schedule No. 30, provided the following details of the subject construction work:

Description

Value of Deduction

Comments

Structural Works

$250,000

Misaligned columns, exposed reinforcement in stairwells, structural floor levels out of level, head height issues in stairs, floor rebate issues, examples of poor workmanship noted in SI170. Provisional Sum Deduction only.

Mechanical Works

$150,000

Mechanical plant rooms have not been constructed as directed. Refer SI85, SI96, SI101. Subducts have been installed without shop drawings being prepared and/or approved. Provisional Sum Deduction only.

Ceilings and Partitions

$70,083.54

All works omitted with exception of speedpanel installation. As noted in multiple instructions the requirements of Section 0522 of the Arch Spec have not been complied with. Works are not in accordance with Contract.

The schedule also provided a breakdown for “Consultant Works”, which totalled $72,515.50.
In its adjudication application, Tomkins claimed that there was no basis for any of these deductions. In particular, it claimed that the only contractual provision identified by York for the deductions in Payment Schedule No. 30 was clause 29.3, which was not applicable as the relevant procedures for notice and rectification had not been followed. It further claimed that the supposedly “defective works” were in fact works that were incomplete and in progress and therefore it was inappropriate or premature for York’s Superintendent to determine that they were defective.
Clause 29.3 of the contract relevantly provides:
“29.3 Defective work
If the Superintendent becomes aware of work done (including material provided) by the Contractor which does not comply with the Contract, the Superintendent will as soon as practicable give the Contractor written details thereof, and a timeframe in which the Principal requires rectification (being not less than 10 business days or such longer period as may be appropriate taking into account the nature of and circumstances relating to the defect. If the subject work has not been rectified within the time frame required, the Superintendent may direct the Contractor to do any one or more of the following (including times for commencement and completion):
a)remove the material from the site;
b) demolish the work;
c) reconstruct, replace or correct the work;
cl) where the Contractor’s design obligations apply, redesign the work and
d) not deliver it to the site.
If:
e) the Contractor fails to comply with such a direction; and
f) that failure has not been made good within 8 days after the Contractor receives written notice from the Superintendent that the Principal intends to have the subject work rectified by others,
the Principal may have that work so rectified and the Superintendent will certify the cost incurred as moneys due from the Contractor to the Principal.”
In its adjudication response, York agreed that clause 29.3 of the contract was not applicable but claimed that it was nevertheless entitled to deduct amounts from Tomkins’ claim pursuant to clause 37.7 of the contract for the consultant works amount and pursuant to s 72(1)(b)(iv) of the BIF Act for the defective construction works.
Clause 37.7 of the contract provides:
“37.7 Set off
The Principal may at any time deduct from, or set off against, any amounts due to the Contractor under this Contract, or otherwise at law in respect of the WUC for amounts, damage, or losses due and payable by the Contractor to the Principal under the Contract and any amount in respect of a bona fide claim which the Superintendent certifies (acting reasonably) against the Contractor under the Contract.
Nothing in this subclause 37.7 limits any other right for the Principal to set off amounts under any other provision of this Contract.”
The Adjudicator decided that York was entitled to deduct the amount of $542,599.04 (excl. GST) from Tomkins’ claim. In doing so, the Adjudicator gave the following reasons:
“117. The claimant does not expressly dispute that there are defective works of [sic. or] works not in accordance with the contract. The respondent’s Scott Schedules (are voluminous) and clearly identify defective work with photos of the various defects discussed above.
118. The claimant contends it has responded to the site instructions and Scott Schedules but has not provided any substantial evidence of its response.
119. The site instructions and scott schedules [sic. Scott Schedules] prepared by the respondent and provided in the adjudication response clearly demonstrate the extent of the defective work and/or work not in accordance with the contract, including the multiple instructions (provided in the adjudication response) issued for the ceilings and partitions that identified work not in accordance with the contract.
120. Pursuant to section 72(1)(b) of the Act a valuation of construction work is to include the estimated cost to rectify the defects. This provision applies irrespectively of the provisions of clause 29.3 of the general conditions of contract.
121. Accordingly, I consider the respondent has demonstrated the respective works that are defective or not in accordance with the contract and is entitled to deduct the estimated cost of rectifying the defects pursuant to section 72(1)(b) of the Act. The deduction of consultants [sic. consultants’] costs associated with the defects is reasonably a cost associated with rectifying the defects and/or are amounts, damages or losses payable by the claimant pursuant to clause 37.7 of the general conditions of contract.
122. Section 72(1)(b) of the Act requires an estimate of the costs of rectifying a defect to be taken into account. The claimant has not provided an estimate of the cost of rectifying the defects but the respondent has provided estimates which appear to be a reasonable estimate.
123. Accordingly, I value the deductions for defective work or work not in accordance with the contract as follows:
a. Structural defects - $250,000.00 excl. GST
b. Mechanical defects - $150,000.00 excl. GST
c. Ceilings and partitions defects - $70,083.54
d. Consultant works - $72,515.50 excl. GST.”
Tomkins says this aspect of the Adjudicator’s decision is affected by the following jurisdictional errors:
(a)      The Adjudicator impermissibly considered new reasons for withholding payment that were not included in Payment Schedule No. 30 (Jurisdictional Error 1);
(b)      In doing so the Adjudicator denied Tomkins procedural fairness (Jurisdictional Error 2);
(c)      The Adjudicator failed to consider Tomkins’ submissions, including the material referred to and attached to its submissions (Jurisdictional Error 3); and
(d)      The Adjudicator failed to consider the provisions of the contract and Tomkins’ submissions about those provisions (Jurisdictional Error 4).
Submissions
As to Jurisdictional Error 1, Tomkins says that ss 69, 76 and 82 of the BIF Act make plain that a respondent to a payment claim must state in its payment schedule any reasons for withholding payment; that it may not include in an adjudication response any reasons not included in the payment schedule; and that it does not matter whether the reasons for withholding relate to set-offs, contractual provisions or statutory provisions limiting a right to payment. It says that the only reason identified by York in Payment Schedule No. 30 for making the deductions was an entitlement to do so under clause 29.3 of the contract; and that York was therefore prohibited from relying upon clause 37.7 of the contract or s 72(1)(b) of the BIF Act, as it sought to do by its adjudication response. Tomkins says it was a jurisdictional error for the Adjudicator to consider those new reasons and to base his decisions on those reasons, as he was prohibited from doing so by s 88(3)(b) of the BIF Act.
Relatedly, with respect to Jurisdictional Error 2, Tomkins says the Adjudicator denied it procedural fairness by relying on the new reasons as the basis for his decision. It says that it would have made submissions about those matters had it known that the Adjudicator was going to consider them and, had it had the opportunity to do so, there is a realistic possibility that the Adjudicator may have been persuaded that:
(a) the operation of clause 29.3 concerning set-off for costs incurred by the principal in rectifying work was such as to engage section 72(1)(a) of the BIF Act, and therefore section 72(1)(b) was not applicable; and
(b) in relation to York’s set-off claim for “consultants’ fees”, given the clear language of clause 37.7, York’s entitlement to set-off under that clause was limited to amounts payable by Tomkins under the contract or bona fide claims certified by the Superintendent under the contract, and as the requirements of clause 29.3 had not been met, no amounts could be certified as payable under the Contract.
As to Jurisdictional Error 3, Tomkins submits that the paucity of the Adjudicator’s reasons demonstrate that he failed to consider, or genuinely consider, its submissions, the contract provisions and the relevant material, in the sense of intellectually engaging with its submissions and the basis upon which it disputed York’s assertion of defective works, as is required by s 88(2)(c) of the BIF Act. It says the Adjudicator’s reasons do not disclose his reasoning process or the basis for his finding that there were defective works.
Tomkins takes issue with the Adjudicator’s statement that it “…did not expressly dispute that there are defective works…”. It submits that this was obviously a matter that it did dispute, having made its position clear in its adjudication application that the alleged defective works were in fact works that were incomplete and in progress.
Tomkins points out that the Scott Schedule prepared by York’s building consultant, Mr John Groom, merely expressed opinions about the state of the works without any reference to any contract requirements regarding the works; and that, in any event, Mr Groom’s comments show that he had inspected the works at a time when they were in progress.
Tomkins further says that the Adjudicator’s finding that the “multiple instructions...issued for ceilings and partitions” clearly identified work not in accordance with the contract, is baseless. It submits that had the Adjudicator genuinely considered that material it would have been clear that the various Site Instructions issued by the Superintendent (which instructions York relied upon for its set-off claim) related to Tomkins and the Superintendent seeking to resolve design conflicts and issues and did not demonstrate that the partitions works were defective.
As to Jurisdictional Error 4, Tomkins claims that the Adjudicator’s reasons make clear that he did not genuinely consider clauses 29.3 and 37.7 of the contract or its submissions. Had he done so, it submits, he would have seen that the only way that York could be entitled to a set off under clause 37.7 was if the requirements of clause 29.3 had been followed and the Superintendent had certified costs as payable by Tomkins “under the contract” in accordance with that provision. Further, Tomkins submits, the Adjudicator wrongly considered s 72(1)(b) of the BIF Act as the starting point for assessment of the alleged defective works, rather than s 72(1)(a). Thus, it submits, it is evident that the Adjudicator failed to consider s 72(1)(a) and whether the provisions of the contract, particularly clause 29.3, provided for valuing defective works.
Tomkins says that because this aspect of the Adjudicator’s decision is affected by jurisdictional error, it should be declared void. If so, Tomkins says the consequence is that the amount of $542,599.04 should be added to the amount found by the Adjudicator to be payable in respect of Payment Claim No. 30.

York submits the First Adjudication Decision is not affected by any jurisdictional error of the kinds asserted by Tomkins.
With respect to Jurisdictional Error 1, York says the Adjudicator did not consider new reasons in a way that constitutes jurisdictional error. It acknowledges that after it filed its adjudication response Tomkins sent an unsolicited email to the Adjudicator which identified what were said to be “new reasons” raised by York in its adjudication response, and that in response it provided the Adjudicator with its own unsolicited email addressing the matters raised by Tomkins, but says the Adjudicator made plain in his reasons that he had not considered either submission.
York further submits that it clearly identified in Payment Schedule No. 30 the reasons why it withheld payment for this aspect of Payment Claim No. 30, namely because of a deduction for the estimated costs of rectifying defects in the works carried out by Tomkins. It reiterates the position it adopted before the Adjudicator, that clause 29.3 of the contract had no application, and says it was not necessary for it to include a specific reference to s 72(1)(b) of the BIF Act in Payment Schedule No. 30, as that provision provided the statutory basis by which the relevant construction work was to be valued. It stresses that s 72(1) was always a matter that the Adjudicator was specifically required to consider in deciding the adjudication application, pursuant to s 88(2)(a) of the BIF Act.
York accepts that the submissions it made in its adjudication response about clause 37.7 of the contract was a new reason for denying payment and was therefore a matter that the Adjudicator should not have considered. Nevertheless, it submits that the error was immaterial and therefore does not give rise to jurisdictional error. In that respect, York points out that the Adjudicator also determined that it was permitted to make the deductions for defective works pursuant to s 72(1)(b) of the BIF Act.

With respect to Jurisdictional Error 2, York submits that Tomkins was not denied procedural fairness as it had the right and the opportunity to make any submissions it wanted to about s 72(1)(b) of the BIF Act in its adjudication application, but simply chose not to do so. Further, it again says the Adjudicator’s reference to clause 37.7 of the contract was immaterial and thus any denial of procedural fairness in respect of that matter was also immaterial.
With respect to Jurisdictional Error 3, York says the Adjudicator’s reasons show that he did not fail to consider Tomkins’ case. It says that the point raised by Tomkins was narrow and the question for the Adjudicator was whether the state of the relevant works was “incomplete” or “in progress”, as Tomkins contended, or whether it was “defective”, and therefore properly subject to deductions, as York maintained. It says the Adjudicator’s conclusion that the works were defective was a finding of fact, for which there was a logical basis, as revealed by the Adjudicator’s reasons. It submits that the material it relied upon clearly provided the basis for the Adjudicator’s findings and, in contrast, Tomkins provided little evidence in support of its view of the state of the works. In the circumstances, it submits, the Adjudicator was right to describe Tomkins’ evidence as “not…substantial”.
With respect to Jurisdictional Error 4, York says there is no basis to conclude that the Adjudicator did not consider the provisions of the contract or Tomkins’ submissions. It again reiterates its submissions about the inapplicability of clause 29.3 and immateriality of the Adjudicator’s reference to clause 37.7. It further submits that the court should infer that the Adjudicator found that the contract did not provide for how work was to be valued and thus proceeded to decide the matter on the basis of s 72(1)(b) of the BIF Act. In doing so, York says, the Adjudicator did not overlook s 72(1)(a). Rather, he correctly proceeded on the basis that it was inapplicable.

Consideration

In my view, none of the alleged jurisdictional errors are established.
To recap, the central premises for each of Tomkins’ arguments on this aspect of the First Adjudication Decision were these: none of the work it had performed, and for which it claimed payment, was “defective”, rather it was “in progress” or “incomplete”; in any event, even if any work was defective, clause 29.3 of the contract provided the only basis upon which York could deny payments it claimed in Payment Claim No. 30; but because York had not complied with the rectification notice requirements of clause 29.3, and had not incurred any actual costs to rectify any defects, it was not entitled to withhold payment.
The Adjudicator found that the subject works were defective and/or not in accordance with the contract and that clause 29.3 of the contract did not apply. When assessing this argument, or indeed any of the arguments concerning alleged jurisdictional error, it must be borne in mind that I am not conducting a merits review and I am not concerned with determining whether the Adjudicator’s findings were correct. I am only concerned with whether the Adjudicator’s decisions were made in accordance with the functions and powers conferred upon him as the appointed adjudicator under the BIF Act. Any questions as to the construction or application of contract provisions or findings of fact to be made on the material adduced by the parties were matters for the Adjudicator to decide within the exercise of his jurisdiction and would not constitute jurisdictional error.
As to Jurisdictional Error 1, I do not accept the argument that the First Adjudication Decision is vitiated because the Adjudicator considered new reasons for withholding payment that had not been included in Payment Schedule No. 30.
I do however accept, as York conceded, that the Adjudicator erred by impermissibly considering, and acting upon, clause 37.7 of the contract as a basis for permitting a deduction from the amount payable on account of consultant fees incurred by York. That was a new reason for denying payment that had not been included in Payment Schedule No. 30. Accordingly, pursuant to ss 82(4) and 88(3)(b) of the BIF Act, the Adjudicator was prohibited from considering such a reason when deciding the matter.
However, an error of this kind will only constitute jurisdictional error if it was material to the decision, in the sense that there is a realistic possibility that the decision could have been different had the error not been made.[3] I am not satisfied that was the case here. Paragraphs 120 and 121 of the Adjudicator’s reasons make plain that he was satisfied that the estimated costs of rectifying the defects, and the associated consultants’ costs, were matters to be taken into account when valuing the work in accordance with s 72(1)(b) of the Act. According to the factual findings of the Adjudicator, that reason alone justified the deductions. The Adjudicator’s reference to clause 37.7 of the contract was a further and additional reason why such costs could be deducted. Therefore, even accepting that he was wrong about that, his error does not invalidate his conclusion that York was entitled to make the deductions it applied to this aspect of the payment claim. Thus, the error is immaterial.
[3]MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506, [1]-[3] (Kiefel CJ, Gageler, Keane and Gleeson JJ); [101] (Gordon and Steward JJ), endorsing Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421.
As to the Adjudicator’s reliance upon s 72(1)(b) of the BIF Act, I do not consider this was a matter he was prohibited from considering under s 88(3)(b) of the BIF Act because it was a “new reason” for withholding payment that was not included in Payment Schedule No. 30.
It is true that Payment Schedule No. 30 did not cite s 72(1)(b)(iv) of the BIF Act as the basis upon which York was withholding payment. However, in my view, that was not necessary. York’s obligation under s 69(c) of the BIF Act was to provide a payment schedule that stated, amongst other things, why the amount proposed to be paid was less than that claimed by Tomkins and its reasons for withholding any payment.
In my opinion, the documentation provided by York with, and as part of, Payment Schedule No. 30 made plain why York proposed Tomkins would be paid less than it had claimed and included its reasons for withholding payment.
On 15 April 2024, York provided Tomkins with Progress Certificate No. 30, which was a certificate completed by the Superintendent and given pursuant to clause 37.2 of the contract. In its covering letter, York noted that Progress Claim No. 30 constituted a payment schedule for the purposes of the BIF Act and the payment schedule included the covering letter as well as various other schedules and supporting documents.
Under Payment Certificate No. 30, the Superintendent certified an amount of $458,349.54 (incl. GST) as payable, which was calculated after deducting an amount for “Work certified, as not being in accordance to the Contract”. As noted, the covering letter explained the deductions were for “Defective Works / Works not in accordance with Contract”.
The appended schedule to the covering letter provided a description of the subject works, together with the value of the deduction applied, and included comments identifying the aspects of the work that were said to be not in accordance with the contract.
The documents referred to in the covering letter as “SI 170” and “SI 170A” were Site Instructions given to Tomkins by the Superintendent to address “defective works”, dated 9 and 15 April 2024 respectively. SI 170 relevantly stated:
“Pursuant to Clause 29.3, which states if the Superintendent becomes aware of work done…which does not comply with the Contract, the Contractor is directed to address the points raised in the appended Schedule.
We require all items addressed in a timely manner, and as a minimum require a written response with proposed rectification period(s) within 10 business days as set out in Clause 29.3.
We note we reserve the right to: -
-Remove costs for works which do not comply with the Contract in our progress claim assessment(s);
-Make alternative arrangements for rectification at the Contractor’s cost as set out in Clause 29.3 if this instruction is not complied with.”
The content of SI 170A was identical, save that it referred to “the appended Schedule 1 and Schedule 2.”
The appended schedules referred to in SI 170 and SI 170A were the associated Scott Schedules prepared by York’s building consultant, John Groom, dated 21 March 2024 and 5 April 2024 respectively. The Scott Schedules provided an itemised schedule of inspected works, together with Mr Groom’s comments as to matters that needed to be addressed and photographs of the problems he had encountered. For example, Item 2 of the 5 April Scott Schedule, which appears to correspond with the “Structural Works” deduction, provided the following comment:
“I did discuss on-site the column and plate connection of the slab shown in the adjacent photos and the connection appears to be in very poor condition. However, nobody could actually confirm with me if this was a connection or a support and why it was in the poor condition it was in. This will need to be reviewed by the structural engineer in my opinion, as it does not appear anybody knows why the connection is in the current state it is in.”
The same Scott Schedules were also provided with the written notifications York gave to Tomkins, dated 5 and 8 April 2024, by which York gave notice of work not in accordance with the contract. The 5 April notification, which referred to Mr Groom’s Scott Schedule of the same date, concluded with the following:
“4. The number of defects identified in the Scott Schedule is of significant concern to the Principal.
5. The Principal requests that the Contractor review and address the non-compliant work set out in the Scott Schedule as soon as reasonably practicable, and before works progress to the point that rectification of these defects is no longer possible…
6. The Principal reserves all of its rights in respect of the defects identified in the Scott Schedule.
7. The Principal reserves its rights under the Contract and at law.”
I further note that Tomkins subsequently responded to York about the matters of concern it had raised, including by adding its own comments to an annotated version of its Scott Schedules. For example, with respect to item 2 in the 5 April schedule, Tomkins’ response, under the added column headed “Contractor Comments 23.04.24” stated:
“The Contractor confirms these are the puddle pours for the level 2 Mezzanine slab - patching of the soffit is underway. This is considered works in progress.”
In my view, the details and documentation provided by York in Payment Schedule No. 30 complied with the obligation under s 69(c) of the BIF Act of a recipient of a payment claim to state in its payment schedule why the amount proposed to be paid was less than that claimed by the claimant, and to provide the respondent’s reasons for withholding payment. As Palmer J stated in Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140, at [70], in reference to the analogous provision of the Building and Construction Industry Security of Payment Act 1999 (NSW):
“Section 14(3) requires that reasons for withholding payment of a claim be indicated in the payment schedule with sufficient particularity to enable the claimant to understand, at least in broad outline, what is the issue between it and the respondent. This understanding is necessary so that the claimant may decide whether to pursue the claim and may know what is the nature of the respondent’s case which it will have to meet if it decides to pursue the claim by referring it to adjudication.”
Payment Schedule No. 30 provided Tomkins with notice of the reasons why payment was withheld (works supposedly “not in accordance with the contract” or “defective”) and enabled it to dispute such suggestions, as it subsequently did, in an application for adjudication of the matter.
I note that in support of its argument that York was required to expressly state that it relied on s 72(1)(b) of the BIF Act in its payment schedule, Tomkins relied upon John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19, where Hodgson JA stated, at [33]:[4]
“If a respondent does not propose to pay any amount included in the payment claim for any reasons said to justify non-payment of that amount, then in my opinion that is withholding payment and the reasons are reasons for withholding payment. It does not matter whether the reasons relate to non-performance of work, bad work, set-offs or cross-claims of any kind, contractual provisions limiting the claimant’s right to payment or statutory provisions limiting the claimant’s right to payment, or indeed any other suggested justification. Any other view would do violence to the language ‘withholding payment for any reason’, and be contrary to the plain purpose of s 20(2B) to avoid new submissions being introduced late in a process going ahead on a brief and strict timetable.”
[4]Cited with approval in Wiggins Island Coal Terminal Pty Ltd v Monadelphous Engineering Pty Ltd & Ors [2015] QSC 307, [51]-[52] (McMurdo J, as his Honour then was).
In Wiggins Island Coal Terminal Pty Ltd v Monadelphous Engineering Pty Ltd & Ors [2015] QSC 307, McMurdo J (as his Honour then was) relevantly concluded, in respect of the similar statutory language within s 24 of the former Building and Construction Industry Payments Act 2004 (Qld):
“The evident intent of s 24 is to prevent the unfairness to a claimant which could follow from a respondent being allowed to contest its alleged liability for a reason which it had not advanced ahead of the adjudication application. “
That is not what occurred here. York clearly identified in Payment Schedule No. 30 the basis upon which it contested its alleged liability to make the claimed progress payment. I do not consider its subsequent inclusion of submissions concerning the application of s 72(1)(b) of the BIF Act in its adjudication response constituted the inclusion of new reasons, which would otherwise be prohibited by s 82(4) of the BIF Act. I do not think it was necessary for York to spell out in its payment schedule that, as the contract did not provide for the valuation of the work, the works were to be valued in accordance with s 72(1) of the BIF Act; or that if the subject works were found to be defective at an adjudication, as contended by York, then an adjudicator would be required to value the works under that provision. The Adjudicator here was required to determine if any of the subject work was defective, and, if so, he was then obliged to have regard to the estimated costs of rectifying the defect when valuing the construction work. That task was quite separate to the task of assessing whether York had any contractual right to set-off the deductions. [5]
[5]SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307, [83] (Bond J, as his Honour then was).
Consequently, I reject Tomkins’ argument that, by applying s 72(1)(b), the Adjudicator considered “new reasons” in contravention of s 88(3)(b) of the BIF Act. Indeed, under s 88(2)(a), the Adjudicator was required to consider the provisions of Chapter 3 of the BIF Act, which included s 72, when deciding the matters stipulated in s 88(1). The fact that York had not specifically referred to that provision in its Payment Schedule No. 30 could not preclude the Adjudicator from considering it in the discharge of his statutory function. In my view the Adjudicator was entitled to consider York’s subsequent submissions about the effect of s 72(1)(b) in its adjudication response as submissions “properly made” in support of Payment Schedule No. 30; and he was therefore obliged to consider them, as required by s 88(2)(d) of the BIF Act.
It follows from the foregoing that I do not think Tomkins was denied procedural fairness as it contends by Jurisdictional Error 2. Tomkins had the opportunity to make submissions about s 72. It chose not to do so. Whether due to a deliberate choice, mistake or ignorance, its failure to address s 72(1)(b) does not demonstrate that it was denied procedural fairness. It seems to have wrongly assumed that York was relying upon a set-off claim under clause 29.3 of the contract to make the relevant deductions to its payment claim. Consequently, its adjudication application submissions focussed upon the reasons why it said clause 29.3 was not engaged. That appears to be a mistake of its own making. It only seems to have realised its mistake when York provided its adjudication response, in which it pointed out that it did not rely on clause 29.3 and submitted that the adjudicator should find that the relevant works were defective and value the works by deducting the estimated costs for rectifying the defective work in accordance with s 72(1)(b)(iv) of the BIF Act.
Insofar as Jurisdictional Error 2 was founded upon the Adjudicator wrongly considering that York was entitled, pursuant to clause 37.7 of the contract, to set off the amounts it had paid to consultants as costs associated with rectifying defects, for the same reasons already given that was an immaterial error.
The submissions made in respect of Jurisdictional Error 3 expose disagreement between the parties as to an adjudicator’s obligation under s 88(2) of the BIF Act to “consider” the matters enumerated therein. Relying on Bond J’s summary of relevant principles in Acciona at [35], Tomkins contends that the correct approach requires an adjudicator to give “genuine consideration” to those matters and to carry out an “active process of intellectual engagement” with the issues and the submissions before them. York, on the other hand, relied on the decision in Ceerose, where, in respect of the equivalent provision within the Building and Construction Industry Security of Payment Act 1999 (NSW), s 22(2), the Court (Payne JA, with whom Ward ACJ and Basten AJA agreed) held that such epithets were an impermissible gloss on the statutory language.
I consider the correct approach to be taken to an analysis of whether an adjudicator has complied with their duty to consider the matters in s 88(2) of the BIF Act is that held by the court in Ceerose. There, Payne JA relevantly stated:
“[51] … the question whether the adjudicator has considered a matter for the purposes of s 22(2) will involve an inquiry into the private processes of decision-making, and even the mental processes of the adjudicator. While those processes may be revealed by the reasons required to be given under s 22(3), those reasons will not necessarily demonstrate a negative proposition, namely a failure to consider a particular matter required to be considered simply because it is not referred to in the reasons.
…
[62] The attempt to articulate, using other language, what is required by the verb ‘consider’ will usually be misconceived…In a practical sense, the problem for a party challenging a determination is not to identify whether the mental process undertaken by the adjudicator was ‘active’, ‘intellectual’ or ‘genuine’, but rather to identify a basis on which it could be said that consideration did not occur. The mental processes of the adjudicator will be entirely opaque, except to the extent that they are revealed in his or her reasons. However, as already noted, the failure to identify a particular claim or response in reasons will not of itself demonstrate that the adjudicator failed to consider it. That is so for a number of reasons.”
Payne JA then identified several reasons why an adjudicator’s failure to refer to a matter in his or her reasons was not necessarily indicative of a failure to consider a matter as required by the relevant statute, namely that an adjudicator’s reasons were not necessarily or even usually a comprehensive statement of all aspects of a decision-maker’s thinking; that the reasons will inevitably reflect the practical circumstances under which the adjudicator is operating to decide an adjudication application within the tight timeframes stipulated by the legislation; that it was not unusual for the material supplied to an adjudicator to run into hundreds and even thousands of pages; and that there may be a range of possible explanations for why an adjudicator did not refer to a matter in his or her reasons, amongst which an explanation that the adjudicator did not consider the matter is but one.[6]
[6]Ceerose, [63]-[69].

Applying that approach to this case, I am not prepared to conclude that the Adjudicator failed to consider any of the matters required by s 88(2) of the BIF Act.
Although Tomkins sought to make much of the Adjudicator’s statement in his reasons, at paragraph 117, that “[T]he claimant does not expressly dispute that there are defective works of [sic. or] works not in accordance with the contract”, I do not consider that statement demonstrates that the Adjudicator failed to consider Tomkins’ submissions, thereby constituting jurisdictional error.
The first point to be made about the Adjudicator’s statement is that it was factually accurate. The works the subject of this aspect of the First Adjudication Decision were not the only works in respect of which York had withheld payment on the grounds that the works were defective or not in accordance with the contract. York had withheld payment of Tomkins’ claim for $952,934.16 (excl. GST) for work performed on the building façade as its Superintendent had certified that work was defective and had deducted that amount in its Progress Certificate No. 30. Tomkins did not dispute that matter in its adjudication application. Furthermore, by its submissions in support of its adjudication application, where it wrote “… the majority of ‘defects’ are in fact issues relating to incomplete works / works in progress, and should not be characterised as ‘defects’ at this stage of the works”, Tomkins did not dispute, and implicitly accepted, at least for the purposes of adjudication, that at least some of the works were defective. In any event, even if the Adjudicator was wrong about that, his statement does not demonstrate jurisdictional error.
The second point to be made about the matter is that, at paragraph 115 of his reasons, the Adjudicator correctly identified Tomkins’ case with respect to the subject works said to be defective or not in accordance with the contract. That included reciting the submission made by Tomkins that “the majority of ‘defects’ are in fact issues relating to incomplete works / works in progress, and should not be characterised as ‘defects’ at this stage of the works.” It cannot sensibly be said in my view that the Adjudicator did not consider Tomkins’ submissions, or the issue raised on the material before him.
I consider the Adjudicator’s reasons adequately disclose his reasoning process and the basis upon which he found the subject works were defective. Further, although brief, the extent of the reasons given on this issue to find in favour of York does not justify the inference that the Adjudicator must have failed to consider Tomkins’ submissions, the contract provisions and the relevant material provided by the parties.
The Adjudicator’s statements in his reasons at paragraph 117 that “[t]he respondent’s Scott Schedules (are voluminous) and clearly identify defective work with photos of the various defects discussed above”, and at paragraph 119, that “[t]he site instructions and scott [sic. Scott] schedules prepared by the respondent and provided in the adjudication response clearly demonstrate the extent of the defective work and/or work not in accordance with the contract…” were conclusory in nature. However, such a characterisation does not demonstrate that the Adjudicator failed to consider the matters required by s 88(2) of the BIF Act. The Adjudicator was required to make factual findings about whether the subject works were defective. He did so. It is obvious that the Adjudicator rejected Tomkins’ case in the process. Even if he erred in making such findings, that would not establish jurisdictional error.
Given the nature and volume of the material adduced by the parties, I do not consider the absence of further elaboration in the reasons shows the Adjudicator failed to do what was required of him in the discharge of his statutory functions and powers.
I find Tomkins’ complaint that there was material before the Adjudicator to support its case that the works were not defective, but which was not referred to by the Adjudicator in his reasons, to be particularly unpersuasive. During the hearing of the present application, I was told (without demur) that the volume of material provided to the Adjudicator exceeded 20,000 pages. That was subsequently borne out by the extent of the material exhibited to the affidavit of the applicant’s solicitor, Mr Alexander Nordang, producing copies of the relevant adjudication applications, adjudication responses and associated material relied upon by the parties, which totalled 24,713 pages. In circumstances where the Adjudicator was required by s 85 of the BIF Act to decide the application “as quickly as possible” it is unreasonable and unrealistic to expect him to give detailed consideration in his reasons to any one particular document, or category of documents, unless required by the issues to be determined and assisted by the parties to identify the relevant document and its content. An adjudicator is not required to trawl through a mountain of material to find the supposed nugget hidden within and ought not to be criticised for failing to refer to something that a party did not clearly identify.[7]
[7]Prime Constructions (Qld) Pty Ltd v HPS (Qld) Pty Ltd & Ors [2019] QSC 301, [50] (Flanagan J, as his Honour then was), citing Avopiling (NSW) Pty Ltd v Menard Bachy Pty Ltd [2012] NSWSC 1466, [35] (Sackar J).
In this case, Tomkins says that it made plain that it had responded to York’s various correspondence, notification and site instructions about supposedly defective work, or work not in accordance with the contract, and had explained that the work was “incomplete” or “in progress”, and any matters of concern would be attended to by Tomkins as it completed the work; or that it related to design issues that it was seeking to resolve with the Superintendent. In those respects, Tomkins’ submissions in support of the adjudication application contained the following:
“118. As Mr Justin Grant confirms in his statutory declaration, and is further supported by the Claimant’s response dated 28 May 2024 to a recent Notice to Show Cause issued by the Principal:
(a)the Claimant is actively working with the Superintendent and Principal to resolve any valid concerns regarding the permanent works;
(b)the majority of ‘defects’ are in fact issues relating to incomplete works / works in progress, and should not be characterised as ‘defects’ at this stage of the works;
…
121. The Respondent and Claimant have recently fallen into dispute about alleged defective works carried out on the Project.
122. The Claimant squarely rejects those allegations. As the Claimant has explained in its responses to Site Instructions 170, 171 and 209, the issues raised in the Superintendent’s Scotts [sic. Scott] Schedules in large part comprise:
(a)expressions of pure opinion from the Principal’s building inspector, Mr John Groom, and which had been made without reference to Australian standards / codes or contract documents;
(b)‘works in progress’ or ‘incomplete works’; and/or
(c)technical design issues for which the Principal is entirely responsible.
123. This is set out in the Claimant’s response dated 28 May 2024 to a Notice to Show Cause issued by York (addressed at Section A of Mr Rodney McKenzie’s statutory declaration).
124. In short, and as further detailed below and in the statutory declaration of Mr Justin Grant (Section C):
(a)the Superintendent has in recent weeks issued Scott Schedules to the Claimant;
(b)the Scott Schedules contained lists of alleged defects in the works;
(c)the Claimant has responded to each item in the Scott Schedule and has committed to resolving any valid concerns with the Superintendent and Principal;
(d)the Superintendent has included deductions in the Payment Schedule for alleged defects first notified to the Contractor on that very same day (15 April 2024).
125. On 9 April 2024, the Superintendent issued site instruction SI 170 to the Claimant, which included a Scott Schedule setting out a list of alleged defects in the works (9 April Scott Schedule).
126. On 15 April 2024, the Superintendent issued SI 170A containing an updated version of the Scott Schedule containing further alleged defects (15 April Scott Schedule). On the same date, the Superintendent issued the Payment Schedule, which as set out above, certified a deduction for ‘work certified as not being in accordance with the Contract’. (in other words: the deduction was made on the very day the alleged defects in SI 170A were first raised with the Claimant).
127. The Claimant responded to both SI 170 and SI 170A by letter dated 23 April 2024.
128. On 13 May 2024, the Superintendent then issued Site Instruction no. 209 (SI 209). The Claimant responded to SI by its letter dated 24 May 2024.
129. Notably: the Superintendent did not specify any time for any rectification works to occur. Much less allow the Claimant even the minimum period of 10 business days to respond to the 9 April Scott Schedule before applying its deductions in the Payment Schedule.”
Section C of the statutory declaration of Justin Grant, Project Manager, provided as follows:
“C. Deductions for ‘Defective’ Works
32. I am aware that the Superintendent included deductions for ‘defective’ works / ‘works not in accordance with Contract’ in the March Progress Certificate. Those deductions were based on Site Instruction 170 and Site Instruction 170A, which enclosed ‘Scotts Schedules’ prepared by the Superintendent.
33. I do not know why the Superintendent certified monies payable to York by reference to these instructions. I can confirm that:
(a)Tomkins has responded to both Site Instruction 170 and Site Instruction 170A. In our responses, we committed to resolving any valid concerns raised by York or the Superintendent and provided a response to all items in the Scotts [sic. Scott] Schedule;
(b)rectification of defects will take place within our usual sequence of works.
34. I can also confirm that:
(a)York has not engaged any other contractors to rectify any defects in the works;
(b)aside from the contents of the March Progress Certificate, the Superintendent has not provided any breakdown or substantiation of the amounts certified as payable to York for ‘defective’ works / ‘works not in accordance with Contract’.
35. In my experience, it is very unusual for a superintendent to certify deductions for defects when the contractor is actively working with the superintendent and principal to address issues in the works.”
Section G of the affidavit of Rodney McKenzie, Tomkins’ project director, noted the following:
“G. HCV 171 – NOD # 94 & EOT #47 Delay in Fit-out Works
…
219. In preparing for this Adjudication Application, I have (with support from others in Tomkins’ project team) carefully reviewed all the RFIs, Site Instructions and other correspondence exchanged between Tomkins and York (and the Superintendent / Yorks’ consultants) concerning the technical issues in York’s design documentation for ceilings and partitions.
220. Based on my review of those records, I have prepared a chronology of the events / design issues that led Tomkins to raise EOT No. 47 / HCV No. 171. This appears as Annexure A to my statutory declaration. The documents referred to in the chronology are annexed as exhibits to my statutory declaration.
221. As I explain in the chronology at Annexure A, York and its consultants have repeatedly updated the design documentation after our submission of PC 30 and Tomkins continues to receive revised design documentation to this day. However, Tomkins has still not received fully completed design documentation that would allow us to proceed with ceilings and partitions work throughout the building (as opposed to proceeding on a limited, ‘prototype’ basis).”
It is true that Tomkins made these various submissions in which it contended that the works were not defective. However, Tomkins did not otherwise identify any evidence or document to be considered by the Adjudicator. In particular, it did not identify where its responses to York’s site instructions, Scott Schedules or show cause notice were to be found in the material. In my view, it is not good enough to simply say, as Tomkins now does, that the Adjudicator had a duty to consider its submissions. If there was something that Tomkins wanted the Adjudicator to act on in support of its application, then it should have clearly identified it. Even now, with one possible exception, Tomkins has still not identified with any particularity the documents or evidence that it says the Adjudicator failed to consider.
The possible exception is the submissions it now makes about Annexure “A” to the statutory declaration of Rodney McKenzie, which was before the Adjudicator. Tomkins says the annexure sets out a chronology of events said to be relevant to design issues affecting the partition works from proceeding and, so it is submitted, makes clear that Tomkins and the Superintendent were working to resolve those issues and that the works were therefore not defective. Whether that be so, is not a matter for me to determine. The question for me is whether the absence of any reference to that matter in the reasons demonstrates that the Adjudicator must not have considered it. I am not persuaded that is the case.
I have reviewed Mr McKenzie’s statutory declaration and his Annexure “A” chronology. The chronology is dense and includes a table or schedule, with various diagrams and text, that appear to summarise exchanges, events and opinions relating to apparent design issues. It is not apparent to me what part of the document provides any further evidence or detail of its submission that it was working with the Superintendent to resolve issues and the work was therefore not defective.
Tomkins stresses that particular documents that it referred to in its submissions to the Adjudicator were its letter dated 23 April 2024, responding to York’s Site Instructions 170 and 170A, and its letter dated 28 May 2024, responding to York’s show cause notice. As noted, whilst the adjudication application does refer to those letters, at paragraphs 118, 123 and 127, no reference was made to where the source documents were to be found in the materials before the Adjudicator.
Tomkins says its 28 May 2024 letter was clearly identified, by date, and referred to in Section A of Mr McKenzie’s statutory declaration. Whilst that is so, it is pertinent to set out precisely how that was done. Paragraphs 60 and 61 of Mr McKenzie’s statutory declaration read:
“60. On 17 May 2024, we received a second Notice to Show Cause from York. A copy is attached and marked ‘RM-A-##’.
61. Tomkins strongly disagreed with York’s allegations. We responded by letter dated 28 May 2024, a copy of which is attached and marked ‘RM-A-##’. Our response informed York that Tomkins does not have a design development role on the Project. We also explained that:
(a) Tomkins would unsuspend areas of work as and when York provided 13inimize13 [sic.] design documentation, and
(b) where York had provided further design documentation, Tomkins had commenced installation of limited areas of ceilings and partitions (with some areas completed on a ‘prototype’ basis to test the latest documentation and help York understand the design issue).”
It seems that the “RM-A-#” references in this excerpt were perhaps included as placeholders when the statutory declaration was drafted. They do not assist with identifying where the relevant documents are supposedly located. The summary of its content in paragraph 61 provided scant evidence to support Tomkins’ case. The issue raised there seems to be with respect to responsibility for design rather than the quality of the work performed.
After considerable difficulty, I was able to locate the 28 May 2024 letter amongst the material that was before the Adjudicator, contained in an exhibit to Mr Nordang’s affidavit. A separate copy of the letter was also tendered at the hearing of this application, most likely for my convenience as the document was difficult to find otherwise. In any event, upon review its contents add little to what was summarised by Mr Grant in his statutory declaration.
It was in these circumstances that the Adjudicator stated, at paragraph 118 of his reasons, that “[t]he claimant contends it has responded to the site instructions and Scott Schedules but has not provided any substantial evidence of its response.” In my opinion that was an entirely apt summation of the submissions and material Tomkins had provided and identified for the Adjudicator’s consideration.
With respect to Jurisdictional Error 4, I am not satisfied the Adjudicator failed to consider any relevant provisions of the contract or any relevant submissions made by Tomkins. Tomkins’ argument to the Adjudicator was that because the requirements of clause 29.3 had not been satisfied, York was not permitted to deduct any amounts by way of set-off for defective work. However, as previously explained, that was not the basis upon which York purported to act. The Adjudicator accepted that clause 29.3 did not apply, but irrespective found that s 72(1)(b) of the BIF Act did apply and that York was entitled to deduct the estimated costs of rectifying the defects and the work was to be valued accordingly.
In this application, beyond again addressing clauses 29.3 and 37.7, Tomkins does not identify any other parts of the contract which it says should have been, but were not, considered by the Adjudicator in deciding this aspect of the adjudication application. The Adjudicator dealt with Tomkins’ case about clause 29.3. He erred in an immaterial way in his consideration of clause 37.7. No other provision of the contract was said to be relevant or applicable.
I also reject Tomkins’ argument that the Adjudicator’s reasons show that he wrongly assumed s 72(1)(b) of the BIF Act was the starting point for assessment of the alleged defective work, rather than s 72(1)(a), and that he therefore necessarily failed to consider s 72(1)(a). It is quite clear that the Adjudicator determined that clause 29.3 of the contract did not apply and therefore did not provide for how the work carried out under the contract was to be valued (in terms of deductions for “defective work”). Accordingly, the relevant valuation was to be undertaken having regard to the matters in s 72(1)(b).
In that regard, York relied upon the first statutory declaration of Mr Steven Murphy of Crest for estimates of the costs of rectifying the defective work. In that statutory declaration, Mr Murphy clearly identified the amounts of $250,000 in respect of the structural works and $150,000 in respect of the mechanical works as estimated costs of rectifying defects. The position was less clear in respect of its deductions of $70,083.54 for the ceilings and partitions work and $72,515.50 for consultants’ fees. Mr Murphy explained how those figures were calculated but did not expressly state that these were estimated costs for rectification of defects. Rather, he stated that the $70,083.54 amount had been deducted because of a revaluation of the ceilings and partitions works due to works not in accordance with the contract; and that the $72,515.50 for consultants’ fees was based on invoices provided to him by York in respect of consultancy work associated with defective works or works not in accordance with the contract.
Nevertheless, the Adjudicator concluded that each of these amounts appeared to be reasonable estimates of the costs of rectifying defects in the works under s 72(1)(b) of the BIF Act. Although Tomkins says the Adjudicator wrongly went straight to an assessment under s 72(1)(b) and made several other jurisdictional errors that affected his decision, it does not contend that York’s evidence was incapable of being acted upon by the Adjudicator when valuing the work and the costs of rectifying defects, in accordance with s 72(1)(b)(iv) and it did not provide any estimates of its own.

I note that the “Form 15” referred to in the above excerpt is a compliance certificate for building design or specification under the Building Act 1975 (Qld) and the Building Regulation 2021 (Qld). It is used to certify that particular building work, when performed in accordance with the provided design or specification, will comply with relevant building codes or standards. It is needed where certain works to be undertaken on a project require expert design to ensure compliance with proper building standards.
Tomkins claims that this aspect of the Second Adjudication Decision is affected by the following jurisdictional errors:
(a)The Adjudicator’s decision is illogical or perverse (Jurisdictional Error 4);
(b)The Adjudicator’s decision is incoherent (Jurisdictional Error 5);
(c)The Adjudicator failed to consider its submissions and the material to which it referred and attached to its submissions (Jurisdictional Error 6); and
(d)The Adjudicator failed to consider its submissions and the provisions of the contract (Jurisdictional Error 7).
Submissions
With respect to Jurisdictional Error 4, Tomkins says it was illogical and perverse for the Adjudicator to have decided that the value of the façade works carried out thus far by Tomkins was $6,802,706.65, on the basis that they were 48.03% complete, leaving an amount payable of $2,038,528.65, but to then separately decide that York was entitled to set-off $4,764,178.27 (being the precise amount previously paid to Tomkins for work to date) on the basis that this amount represented the reasonable costs of rectification works. Tomkins points out that in valuing the works at $6,802,706.25, the Adjudicator did not allow any deduction for defective works, and it was therefore illogical or perverse for him to subsequently allow the deduction of $4,764,178.27 for defective works.
Tomkins further says in respect of Jurisdictional Error 5 that in deciding that the sum of $4,764,178.27 was the reasonable value of rectification works, the Adjudicator merely accepted York’s submission that “in the absence of a Form 15” the costs of rectification of the work said to be defective should be estimated by reference to the amount which York had already paid Tomkins for the completed façade works, namely $4,764,178.27. Tomkins contends that such reasoning is incoherent and that there is no rational connection between the absence of a Form 15 and the estimated rectification costs arrived at by the Adjudicator. Tomkins says the irrationality of the Adjudicator’s reasoning is underscored by the fact that York acknowledged in its adjudication response that it had received a Form 15 certificate for the façade from Tomkins.
With respect to Jurisdictional Error 6, Tomkins again submits that the Adjudicator’s reasons show that he did not intellectually engage with its submission that it was not responsible for the design of the façade and that it was York’s consultant, BG&E, that designed the system and who was therefore responsible for providing certification of its design.
Finally, with respect to Jurisdictional Error 7, Tomkins once more argues that it is evident from his reasons that the Adjudicator did not intellectually engage with its submissions that York was not entitled to claim a deduction because it had not complied with the requirements of clause 29.3 of the contract. Thus, it submits, the Adjudicator failed to consider its submissions and the provisions of the contract, and incorrectly decided that s 72(1)(b) of the BIF Act was applicable without first considering s 72(1)(a), which would have required him to value the works in accordance with the contract, viz. clause 29.3.
Irrespective, Tomkins emphasises that the deduction of $4,764,178.27 applied by York was never suggested to be a reasonable estimate of the costs of rectifying defective work and that there was no rational basis for the Adjudicator to treat it as such. It therefore submits that even if it was within jurisdiction for the Adjudicator to proceed under s 72(1)(b) of the BIF Act, by simply picking a figure that was never put forward by York as an estimate of rectification costs, he failed to perform the task required of him under s 72(1)(b)(iv).
York submits that none of the alleged jurisdictional errors are established.
With respect to Jurisdictional Error 4, York says that the Adjudicator’s decision was not illogical or perverse. It says there was a clear connection between the Adjudicator’s finding and the material before him, which showed that the entirety of the works was currently non-compliant with the contract and the estimated rectification costs would be the costs to perform the work (i.e., the amount that had already been paid to Tomkins for the façade work). It emphasises that other than contending that York’s deduction should be valued at nil, Tomkins did not proffer any alternative estimate of the costs to rectify the defective work. In those circumstances, York submits, it was reasonably and rationally open to the Adjudicator to accept its submission in relation to the deduction amount. It further submits that Tomkins’ complaint now is simply about a factual finding made by the Adjudicator, which would not amount to jurisdictional error even if the Adjudicator was wrong.
As to Jurisdictional Error 5, York says Tomkins’ complaint ignores the Adjudicator’s factual finding, based on the material before him, that the façade work was defective and his further conclusion, at paragraph 108 of his reasons, that “the entire façade may require removal and replacement”. It submits that the latter conclusion did not just turn on the absence of a Form 15.
Although York accepts that Tomkins subsequently provided a Form 15, it notes that this occurred some months later, after the reference date for Payment Claim No. 32, and that the Adjudicator was required to value the work as at the reference date of 28 May 2024. It says the subsequent provision of the Form 15 was irrelevant. In any event, it notes that even after the Form 15 was provided, it again requested Tomkins address certain “non-conformances” in the documentation Tomkins had provided with respect to weatherproofing, including within the Form 15, and that Tomkins did not respond to these requests.
As to Jurisdictional Error 6, York says the Adjudicator’s reasons, at paragraph 100, expressly refer to Tomkins’ submissions that BG&E was responsible for the façade system design. That being so, it submits, it cannot be fairly said that the Adjudicator failed to consider Tomkins’ submissions on this point. York further says that the disputed issue of whether Tomkins had a design responsibility was a question of construction of the contract and that on that point the Adjudicator found that clause 9.6 of the contract, properly construed, imposed an obligation on Tomkins to have its subcontractors produce Form 15s, including for the façade. York submits that questions concerning the proper construction of provisions of the contract were within the jurisdiction of the Adjudicator and that even if he was wrong in his conclusion about clause 9.3 no jurisdictional error is established.
As to Jurisdictional Error 7, York again submits that it is implicit in the Adjudicator’s decision to apply s 72(1)(b) of the BIF Act that he necessarily determined that the contract did not provide for the valuation of the work and s 72(1)(a) was therefore not applicable. York says the Adjudicator was entitled to value the costs of rectifying the defects in the work as the costs to perform the works, being the amount York had already paid Tomkins to date.

Consideration

I accept York’s argument that the subsequent provision of a Form 15 by Tomkins is irrelevant. The Adjudicator was required to decide the matters under s 88(1) of the BIF Act according to his assessment of whether the respondent had failed to pay any amount owed to the claimant by the date due for payment. Irrespective of whether the Form 15 was inadequate because of unaddressed “non-conformances”, it was provided after that date.
I reject Tomkins’ argument in respect of Jurisdictional Error 6 that the Adjudicator failed to consider its submissions concerning who bore responsibility for the design of the façade, as required by s 88(2) of the BIF Act. The Adjudicator expressly referred to Tomkins’ argument on this point in his reasons, considered relevant provisions of the contract, and made a factual finding contrary to Tomkins’ position that it was not responsible. There is no basis to conclude that he failed to consider Tomkins’ argument.
With respect to Jurisdictional Error 7, I again conclude that it is obvious that the Adjudicator considered clause 29.3 of the contract did not apply and that s 72(1)(b) of the BIF Act did. It was on that basis that he proceeded to decide the value of the work in accordance with that provision.
Nevertheless, I find the Adjudicator’s ultimate resolution of this issue and his assessment of the value of the work to be problematic and demonstrative of jurisdictional error.
The first concern I have with the Adjudicator’s approach is that he did not actually make a finding that any of the work was defective. Rather, he accepted that the entire façade “may” require removal and replacement. He reached that conclusion on the basis of his earlier findings that Tomkins was required to provide a Form 15 and that in the absence of doing so the “concerns” raised by York about the work performed had not been addressed. Although it seems that the Adjudicator accepted York’s argument that the work was not in accordance with the contract, that was not a finding that the work was defective, such that it had to be removed and replaced. At its highest, it was a conditional finding that those things might need to be done.
The second concern I have is that irrespective of the absence of an actual finding that the work was defective, the Adjudicator purported to value the work under s 72(1)(b) of the BIF Act without there being any evidence before him of the estimated costs of rectifying the defect. The Adjudicator assessed the estimated costs as $4,764,178.27, which was simply the amount that had previously been paid by York to Tomkins for the work done before Payment Claim No. 32 and which York claimed it was entitled to withhold under the contract. Irrespective of whether that was so, the amount identified was not an estimate of the costs of rectifying the work. Unlike other instances in the First and Second Adjudication Decisions, where the Adjudicator had assessed the value of defective work according to the evidence before him, on this occasion there was no such evidence and thus no foundation for his decision.
In the result, I am satisfied this aspect of the Second Adjudication Decision was at least affected by jurisdictional error of the kind complained of under Jurisdictional Error 7. I also accept, as Tomkins contends in respect of Jurisdictional Errors 4 and 5, that it was illogical and incoherent for the Adjudicator to decide that the value of the work to date was $6,802,706.65, yet then value the supposedly defective work at $4,764,178.27. If in fact the work to date was defective because it may need to be replaced, then according to the Adjudicator’s reasoning the value of those works should surely have been the full amount of $6,802,706.65. Whilst that finding alone might not demonstrate jurisdictional error, the matter is put beyond doubt in my view by the Adjudicator’s approach of selecting the figure of $4,764,178.27 as an estimate of the costs of rectifying defective work when valuing the work under s 72(1) of the BIF Act. To my mind, the Adjudicator’s approach shows that he did not consider the matters he was required to consider under s 88(2) of the BIF Act, in particular the payment schedule to which the application relates, together with all submissions, including relevant documents, that had been properly made by the respondent in support of the schedule under s 88(2)(d). Had he done so, it would have been evident to him that York’s submissions did not actually suggest that he should value the work in the manner he did and, moreover, that there was no evidence of an estimate of costs of rectifying the supposed defective work.
As a result, I am satisfied the Adjudicator’s decision should be adjusted so that the amount payable by York is increased by $4,764,178.27 for the value of the façade works completed by Tomkins.
Pipework deduction
This aspect of the adjudication application concerned a dispute about the pipework material used by Tomkins in some of the works carried out under the contract.
In its “Work Not in Accordance With Contract” schedule accompanying, and said to form part of, Payment Schedule No. 32, York provided the following comments in respect of the pipeworks:
“Full details and particulars have been previously provided in the Scott Schedule / John Groom reports issued to the Contractor by way of SI1 70, 170A, SI209 and SI223 to date of works which are currently not in accordance with the Contract. The value of the deduction noted herein is the value of the works undertaken to date which have not been completed in accordance with the Contract. The total value of the pipework installation works completed as assessed earlier in this schedule are hereby reduced by this sum. In the alternative, the deduction is made pursuant to clause 29.3 and/or 37.7 of the Contract. CPVC pipework not approved and/or is not in accordance with the Contract. Has been approved in balcony areas only. All other CPVC pipework to be removed. Refer SI172, SI197, SI206, SI237.”
Tomkins claimed that it was permitted to use the CPVC pipe it had installed, as it had already done so in accordance with shop drawings and without objection, and the CPVC pipe material was entirely suitable. York claimed that such pipework was not approved and not in accordance with the contract. It noted that the relevant specification for the pipework expressly stated that it, “…shall be at least equivalent to medium grade black steel tubing complying with AS 1074…”. It submitted that the installed CPVC pipe did not meet that specification.
After noting that Tomkins relied upon expert opinions as to the suitability of CPVC for the fire sprinkler system from SJM Hydraulics, Solis Fire Engineers and Auscoast Fire Services; that York relied upon the expert opinion from Hitech Materials; and then setting out the respective submissions of the parties as to what each said about the specification and what type of material was permitted for the pipework; the Adjudicator gave the following reasons for this aspect of the Second Adjudication Decision:
“114.Both parties agree that the relevant contract specification requires ‘Pipework above ground on the system side of the alarm valve shall be at least equivalent to medium grade black steel tubing complying with AS 1074’.
115. The claimant contends that CPVC is ‘equivalent’ to black steel tubing and/or the variation to CPVC was approved within the approval of shop drawings.
116. The claimant’s reports from Johnson (SJM Hydraulics P/L) and Mackie (Director of Auscoast Fire Services) state CPVC is at least equivalent to medium grade black steel pipe but only when installed, tested and commissioned in accordance with the manufactures [sic. manufacturer’s] requirements and CPVC pipe system clearly meets the intended performance criteria of our standards in relation to material quality and performance (respectively). I have not been able to locate a copy of the Shelley (Director of Solis Fire Engineers) report in the adjudication application.
117. The respondent’s report from Walls (Hitech Materials P/L) states that CPVC pipes for a fire sprinkler distribution system can be adversely affected by certain mastics or sealants. Additionally a medium grade black steel tube complying with AS 1074 is less likely to be impacted by these substances compared to CPVC pipes. This report does not expressly state that CPVC is not equivalent to black steel tubing.
118. Accordingly, CPCV pipework may be utilised for fire sprinkler systems but only in accordance with manufacturers requirements. The claimant has not evidenced the installation of the CPVC pipe has been done in accordance with the manufacturer’s requirements.
119. The Walls report finds that black steel tube is less likely to be impacted by mastics or sealants. In the circumstances, the parties disagree whether CPVC pipe is equivalent to black steel tube.
120. The claimant contends that the change to CPVC pipe was authorised when working drawings were approved.
121. Any change to the piping would be a variation of the contract, and in this case it appears that CPVC is less expensive and would therefore be a variation for the convenience of the claimant.
122. Clause 36.3 of the contract relevantly provides that ‘lf the Contractor requests the Superintendent to direct a variation for the convenience of the Contractor the Superintendent may do so.’
123. The claimant has not provided any details of a request to the superintendent for the variation of the contract for the use of CPVC pipe.
124. It cannot be considered that the depiction of CPVC pipe on working drawings is sufficient to be considered a request for a variation pursuant to clause 36.3 of the contract.
125. The claimant cannot vary the contract without approval of the superintendent.
126. The claimant has not provided any evidence of the superintendent’s approval of a variation for the use of CPVC and, as discussed above, approval of shop drawings cannot be an approved variation.
127. Accordingly, CPVC pipe installed is not an approved variation of the contract and is not in accordance with the contract.
128. The respondent has estimated the cost of rectifying this defect ‘deducting Tomkin’s [sic. Tomkins’] claims for CPVC within trade summary of its Payment Claim … 10 levels at $12,000 each … and a provisional allowance ... for the removal of the CPVC pipework to date, … $30,000.’
129. The $12,000 is the amount claimed per level by the claimant for the fire services pipeworks and is therefore a reasonable estimate of the defect. The estimate of $30,000 for removal is also reasonable. The claimant has not provided any alternate estimate for the rectification of this defect.
130. Accordingly, I value the estimated cost of rectifying the fire services pipework at $150,000.00 excl. GST pursuant to section 72(1)(b)(iv) of the Act.”

Tomkins claims that this aspect of the Second Adjudication Decision is affected by the following jurisdictional errors:
(a)The Adjudicator denied it procedural fairness (Jurisdictional Error 8); and
(b)The Adjudicator failed to consider its submissions and the provisions of the contract (Jurisdictional Error 9).
Submissions
For Jurisdictional Error 8, Tomkins says the Adjudicator denied it procedural fairness by determining this aspect of the adjudication application on a basis not contended for by the parties. In that respect, it points to the Adjudicator’s reasons, at paragraph 118, where he determined that CPCV pipework could be used for the fire sprinkler systems, but only “in accordance with manufacturers’ requirements”; and found that the claimant had not provided evidence that the installation of the CPVC pipe had been done in accordance with the manufacturer’s requirements.
Tomkins says the “manufacturer’s requirement” point was not raised by York as the reason why the work was said to be defective. Rather, its sole argument was that the CVPC pipework was not “equivalent to medium grade black steel tube pipe”. It submits that the Adjudicator did not notify the parties that he intended to decide the matter on a basis which had not been addressed by either party. It says he ought to have done so, if that was his intention, and that he should have sought further submissions from the parties on the point. Had he done so, Tomkins submits, it could have addressed whether the installation complied with the manufacturer’s requirements. In the circumstances it says it was denied procedural fairness, amounting to jurisdictional error.

As to Jurisdictional Error 9, Tomkins again submits that the Adjudicator’s reasons reveal that he failed to genuinely consider and intellectually engage with its submissions that York was not entitled to claim a deduction for the pipework because it had not complied with clause 29.3 of the contract. It again says that the Adjudicator failed to consider the contract provision and incorrectly decided that s 72(1)(b) of the BIF Act applied, without considering whether s 72(1)(a) of the BIF Act applied.
Tomkins submits that the Adjudicator’s decision in respect of York’s set-off claim should be declared void, with the result that the adjudicated amount for the pipework should be increased by an amount of $150,000.
York submits that neither of the alleged jurisdictional errors is established.
With respect to Jurisdictional Error 8, York says the Adjudicator did not deny Tomkins procedural fairness as it alleges. It submits that the basis for the Adjudicator’s decision arose on Tomkins own evidence, pointing out that the expert report of Mr Johnson and Mr Mackie each qualified their opinions as to the suitability of the CPVC piping, by noting that it would be equivalent to medium grade black steel when installed, tested and commissioned “in accordance with the manufacturers [sic. manufacturer’s] requirements”. That being so, York submits, the Adjudicator’s conclusion was rational and obvious and did not deny Tomkins procedural fairness as it always had the opportunity to make submissions about its own expert opinion evidence or to lead other evidence.
York further submits that even if Tomkins was denied procedural fairness, no jurisdictional error was committed by the Adjudicator as the denial was not material because compliance with the manufacturer’s requirements was not the reason why the Adjudicator allowed the deduction. Rather, it says, the Adjudicator found that the CPVC could only be used if Tomkins first obtained approval from the Superintendent, which it had not done. In that respect, York notes that Tomkins makes no complaint about the Adjudicator’s findings regarding the contractual requirement for, and the absence of evidence of, such approval.
Consideration
In my view, the Adjudicator did deny Tomkins procedural fairness. The “manufacturer’s requirements” point was one that neither had raised and was not the basis of their dispute. I do not accept York’s argument that Tomkins could have, and should have, anticipated that it would need to address whether the pipework had been installed in accordance with the manufacturer’s requirements. Whilst it is true that this point arose from Tomkins’ own expert evidence, that does not provide an answer to the complaint of a denial of procedural fairness in my opinion. Where York had not identified the point as the basis for its deduction for defective work, the Adjudicator should not have determined the matter on this basis without raising it with the parties and affording them the opportunity to provide further submissions to address it.
Nevertheless, I accept that the error was not material for the reasons submitted by York.
It is apparent from the Adjudicator’s reasons that he ultimately decided this aspect of the second adjudication application on the basis that the use of the CPVC pipe was not authorised, irrespective of whether it was equivalent to black medium grade steel tubing. At paragraphs 121 to 126 of his reasons the Adjudicator determined that any change to the piping would be a variation of the contract, for the convenience of Tomkins; that clause 36.3 of the contract provided that such a variation could be granted if the Superintendent so directed upon request made by the contractor; that there was no evidence of any such request or approval; that it could not be considered that the depiction of CPVC pipe on working drawings was sufficient to be considered as such a request; and that accordingly the CPVC pipe installed was not an approved variation and not in accordance with the contract.
I note the latter part of the reasons given by the Adjudicator dealt with Tomkins’ claim that the use of CPVC pipe was shown on shop drawings which had been approved for use and in respect of which there had been no previous objection by York. In short, the Adjudicator decided that any tacit approval that may have been given, or perceived, could not displace the express approval required under the contract. Those findings dictated the Adjudicator’s decision on this issue. It would have made no difference to the outcome if Tomkins had been given the opportunity to address the “manufacturer’s requirements” point.
With respect to Jurisdictional Error 9, although the Adjudicator did not expressly refer to clause 29.3 of the contract and Tomkins’ argument about it providing the only permissible basis under the contract for York to make a deduction to its payment claim, the Adjudicator’s reasons on this point cannot be read in isolation. The Adjudicator had elsewhere in his reasons already implicitly rejected this same argument. In my view the absence of any reference to those matters in this section of the reasons does not demonstrate that the Adjudicator failed to consider the matters as required under s 88(2), so as to constitute jurisdictional error.
Conclusion
I am not satisfied that the First Adjudication Decision was affected by jurisdictional error in any of the ways suggested by Tomkins. That aspect of the application must be dismissed.
As for the Second Adjudication Decision, I accept that the Adjudicator’s decision regarding the façade deduction was affected by jurisdictional error in a particular respect and the application must be allowed to that extent. I otherwise find the balance of Tomkins’ complaints of jurisdictional error are not established.
In accordance with my conclusions, the Second Adjudication Decision should be varied to the extent that the Adjudicator’s decision to value the amount payable by York to Tomkins in respect of the works that were the subject of the façade deduction is increased by $4,764,178.27.
Orders
1.   I declare paragraphs [99] to [110] of the adjudication decision of the second respondent dated 22 September 2024 and numbered 2602454 (Second Adjudication Decision) in respect of the estimated cost of rectifying purportedly defective work in respect of the building façade carried out under the construction contract between the applicant and the first respondent executed 12 August 2021 are affected by jurisdictional error and are void.
2. Pursuant to s 101(4) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld):
a.   paragraphs [99] to [110] of the Second Adjudication Decision are severed from the decision;
b.   the value of the deduction for the alleged defective façade works referred to in those paragraphs is reduced to $nil;
c.   the adjusted amount payable by the First Respondent to the Applicant under the Second Adjudication Decision of the Second Respondent is increased by $4,764,178.27 (incl. GST) to $6,161,488.27 (incl. GST) (this is the adjudicated amount plus the $4,764,178.27 incl GST).
3.   The balance of the application filed 18 October 2024 is dismissed.
4.   I will hear the parties on the question of costs.

CITATION:	Tomkins Commercial & Industrial Builders Pty Ltd v York Property Holdings Pty Ltd [2025] QSC 261
PARTIES:	TOMKINS COMMERCIAL & INDUSTRIAL BUILDERS PTY LTD ABN 98 061 732 778 (applicant) v YORK PROPERTY HOLDINGS PTY LTD as trustee for YORK PROPERTY TRUST ABN 94 831 587 168 (first respondent) RICHARD ATKIN, ADJUDICATOR J1182971 (second respondent) THE ADJUDICATION REGISTRAR (QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION) (third respondent)
FILE NO/S:	14068 of 2024
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	17 October 2025
DELIVERED AT:	Brisbane
HEARING DATE:	5 June 2025; 6 June 2025
JUDGE:	Crowley J
ORDERS:	1. I declare paragraphs [99] to [110] of the adjudication decision of the second respondent dated 22 September 2024 and numbered 2602454 (Second Adjudication Decision) in respect of the estimated cost of rectifying purportedly defective work in respect of the building façade carried out under the construction contract between the applicant and the first respondent executed 12 August 2021 are affected by jurisdictional error and are void. *2. Pursuant to s 101(4) of the Building Industry Fairness (Security of Payment) Act 2017* (Qld): a. paragraphs [99] to [110] of the Second Adjudication Decision are severed from the decision; b. the value of the deduction for the alleged defective façade works referred to in those paragraphs is reduced to $nil; c. the adjusted amount payable by the First Respondent to the Applicant under the Second Adjudication Decision of the Second Respondent is increased by $4,764,178.27 (incl. GST) to $6,161,488.27 (incl. GST) (this is the adjudicated amount plus the $4,764,178.27 incl GST). 3. The balance of the application filed 18 October 2024 is dismissed. 4. I will hear the parties on the question of costs.**
CATCHWORDS:	CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay two payment claims submitted by the applicant so the applicant referred both of those disputes to an adjudicator – where the applicant claims in respect of the first adjudication decision that the respondent provided new reasons to the adjudicator which were not included in the payment schedule – whether new reasons were provided, whether the adjudicator considered them, and whether the adjudicator breached s 88(3)(b) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) by considering them – whether jurisdictional error is established ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – PROCEDURAL FAIRNESS – GENERALLY – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay two payment claims submitted by the applicant so the applicant referred both of those disputes to an adjudicator – where the applicant claims that in respect of both adjudication decisions, the adjudicator failed to consider its submissions including the material referred to and attached to its submissions – whether the adjudicator failed to consider the applicant’s submissions and thereby denied it procedural fairness – whether jurisdictional error is established on this ground ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – RELEVANT CONSIDERATIONS – FAILURE TO CONSIDER – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay two payment claims submitted by the applicant so the applicant referred both of those disputes to an adjudicator – where the applicant claims in respect of both adjudication decisions that the adjudicator failed to consider the provisions of the contract– whether the adjudicator considered the provisions of the contract and whether jurisdictional error is established CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – DEDUCTIONS – where the applicant is the head contractor for the construction of a residential apartment tower and the respondent is the principal – where the respondent refused to pay a payment claim submitted by the applicant on the basis that the works did not comply with the contract and required rectification to the extent that the deductions for rectification equalled the amount claimed by the applicant for works completed – where the applicant referred this dispute to an adjudicator – where the adjudicator accepted the respondent’s submission that the cost of rectification was equal to the amount claimed for works completed by the applicant – where the applicant claims that the adjudicator’s decision was illogical, perverse and incoherent because of its method of valuing the rectification works – whether the adjudicator fell into jurisdictional error by valuing the deductions for rectification in the manner that he did Building Industry Fairness (Security of Payment) Act 2017 (Qld), s 72(1), s 88 Acciona Agua Australia Pty Ltd v Monadelphous Engineering Pty Ltd (2020) 4 QR 410; [2020] QSC 133, applied Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215, applied John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19, considered Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140, cited Prime Constructions (Qld) Pty Ltd v HPS (Qld) Pty Ltd [2019] QSC 301, cited Wiggins Island Coal Terminal Pty Ltd v Monadelphous Engineering Pty Ltd [2015] QSC 307, cited
COUNSEL:	D S Piggott KC, with J E Menzies, for the applicant M D Ambrose KC, with T W Ambrose, for the first respondent No appearances for the second and third respondents
SOLICITORS:	Thomson Geer for the applicant Holding Redlich for the first respondent No appearances for the second and third respondents

Description	Value of Deduction	Comments
Structural Works	$250,000	Misaligned columns, exposed reinforcement in stairwells, structural floor levels out of level, head height issues in stairs, floor rebate issues, examples of poor workmanship noted in SI170. Provisional Sum Deduction only.
Mechanical Works	$150,000	Mechanical plant rooms have not been constructed as directed. Refer SI85, SI96, SI101. Subducts have been installed without shop drawings being prepared and/or approved. Provisional Sum Deduction only.
Ceilings and Partitions	$70,083.54	All works omitted with exception of speedpanel installation. As noted in multiple instructions the requirements of Section 0522 of the Arch Spec have not been complied with. Works are not in accordance with Contract.