A ‘timely’ reminder of the importance of adhering to statutory timeframes under QLD security of paym

The recent decision of the Supreme Court of Queensland in Galaxy Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd [2020] QSC 51 confirms that an adjudicator must comply with the time frames prescribed by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the Act) when providing a determination.

The case concerned an adjudicator’s determination which held that Galaxy Developments Pty Ltd was required to pay a $1.3 million progress payment to Civil Contractors (Aust) Pty Ltd.

Galaxy sought to have the determination declared void because, among other things, the adjudicator’s determination was issued four days after the date which the parties had agreed, pursuant to section 86(2)(a) of the Act, the adjudicator was to provide his determination.

Relevantly, section 85(1) of the Act provides:

Subject to section 86, an adjudicator must decide an adjudication application no later than:

•   for a standard payment claim-10 business days after the response date; or
•   for a complex payment claim-15 business days after the response date.

Section 86 of the Act provides that the parties may agree to extend the time by which the adjudicator must provide its determination.

Galaxy referred to the use of mandatory language in the Act, specifically “the adjudicator must decide an adjudication application no later than…”, to argue that any non-compliance with the timeframe for providing a determination is fatal to the validity of the adjudicator’s determination, particularly where the parties had agreed to extend the adjudicator’s jurisdiction to a specific date. Galaxy submitted that, as a consequence, a determination delivered outside the agreed timeframe will be void as the adjudicator does not have the jurisdiction to make any such determination.

Dalton J, agreeing with Galaxy, noted the mandatory requirements in respect of statutory timeframes imposed by the Act upon the parties, including the adjudicator, are consistent with the legislative purpose of the Act, being to achieve a quick resolution of a disputed progress payment.

Accordingly, Dalton J held that the adjudicator’s failure to deliver his determination within the prescribed timeframe meant the adjudicator had acted outside his jurisdiction and the determination was therefore void. In making this decision, Dalton J emphasised the importance of the claimant, respondent and adjudicator all strictly complying with the timeframes mandated in the Act.

The full decision of Galaxy Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd [2020] QSC 51 can be found here.