October 1, 2019

In the recent decision of Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor [2019] QCA 177, the Queensland Supreme Court of Appeal considered what constitutes effective service of an adjudication application under Queensland’s security of payment legislation.

Niclin was engaged by SHA to design and build several petrol stations. On 28 November 2018, after the parties had exchanged payment claims and schedules under the Building and Construction Industry Payments Act 2004 (Qld) (the Act), Niclin lodged adjudication applications with the Queensland Building and Construction Commission (QBCC) pursuant to s 21(5) of the Act.

By mistake, Niclin failed to serve the adjudication applications on SHA until 14 December 2018, some 12 business days after it lodged the applications with the QBCC. Section 21(5) of the Act requires that a copy of the adjudication application must be served on the respondent, but does not prescribe a time limit within which to effect service. The adjudicator appointed by the QBCC to determine the applications concluded that in the absence of a defined time limit for service, s 38(4) of the Acts Interpretation Act 1954 (Qld) (AIA) applied. That sub-section relevantly states that “[i]f no time is provided or allowed for doing anything, the thing is to be done as soon as possible…”. The adjudicator considered that in the circumstances there had not been effective service and, therefore, he had no jurisdiction to determine the applications.

Niclin sought a declaration from the Supreme Court that the adjudicator’s decision was void, and orders for the adjudication applications to be remitted. The trial judge agreed with the adjudicator’s determination, and refused the application.

Niclin appealed, arguing that the trial judge erred on a number of bases, including in her finding that s 21(5) of the Act requires service “as soon as possible” after the adjudication application was lodged, and in her finding that service was not effected in accordance with the Act such that the adjudicator had no jurisdiction. Niclin argued that the absence of any express timeframe in s 21(5) indicated that Parliament intended that applicants should be able to decide when to serve adjudication applications on respondents. Because the timeframes for the respondent and adjudicator do not begin to run until service is effected, any delay of service would only disadvantage the applicant. It also argued that it had, in fact, served the respondent “as soon as possible”.

Applegarth J, with whom Gotterson and Philippedes JJA agreed, dismissed the appeal on the basis that:

  •   In the absence of an express time limit in s 21(5) of the Act, there is a presumption that s 38(4) of the AIA applies unless there is a contrary intention in the Act. There was no contrary intention, and the application of s 38(4) of the AIA is not inconsistent with the Act’s purpose of ensuring the expeditious determination of adjudication applications.
  •   The trial judge therefore correctly concluded that the Act requires service of an adjudication application “as soon as possible”, and was also correct in finding that this had not been done in this case.

This case highlights the critical importance of adhering to the tight timeframes under the Act, so as to avoid losing the ability to enforce statutory rights.

The full decision may be found here.

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