Key Takeaways

• Strict compliance with the BIF Act is essential throughout the adjudication process
• Ensure that the adjudication application and all accompanying documents are served on the respondent within 4 business days of lodging the application
• The consequences of non-compliance can be severe. A claimant may not only lose the benefit of a favourable adjudication decision but may also be time-barred from bringing a fresh claim.

Background

Subcontractors will be familiar with their entitlement to apply for adjudication of a payment claim if the amount scheduled by the contractor is less than the amount claimed by the subcontractor.

Section 79(4) of the BIF Act sets out the service requirements for a claimant’s adjudication application on a respondent. Specifically, within 4 business days after making the adjudication application, the claimant must give the respondent:

• A copy of the adjudication application, and
• A copy of any submissions accompanying the adjudication application.

In Platform Constructions, the claimant, Fourth Dimension, through its solicitor, lodged its adjudication application online via the QBCC’s website. In doing so, it uploaded written submissions and all referenced exhibits, including the subcontract between the parties.

Within 4 business days, Fourth Dimension provided Platform Constructions with a copy of the adjudication application, satisfying section 79(4)(a) of the BIF Act. However, Fourth Dimension did not provide Platform Constructions with a copy of the subcontract referred to in its submissions, raising an issue as to whether it complied with section 79(4)(b) of the BIF Act.

The adjudicator determined the claim in Fourth Dimension’s favour. However, Platform Constructions subsequently challenged the validity of the adjudication decision on the basis that Fourth Dimension had failed to comply with the mandatory service requirements under section 79(4) of the BIF Act.

Court’s Findings

At first instance, the primary judge found that Fourth Dimension had complied with the service requirements prescribed under section 79(4) of the BIF Act.

On appeal, Platform Constructions successfully argued that the proper interpretation of section 79(4)(b) required Fourth Dimension to give Platform Constructions a copy of all submissions accompanying the application, within 4 business days of making the adjudication application. The Court of Appeal agreed, confirming that “submissions” in the context of section 79(4)(b) encompasses all documents uploaded with the adjudication application, including the subcontract exhibited to those submissions.

Because Fourth Dimension failed to provide Platform Constructions with a copy of the subcontract referenced in and exhibited to its submissions, it did not comply with section 79(4)(b). This non-compliance was fatal to the validity of the adjudication decision. As a result, Fourth Dimension’s claim that had been determined in its favour was declared void.

Importantly, the time limits for making an adjudication application under section 79(2)(b) of the BIF Act are strict. An application must be made within 30 business days of receiving the payment schedule. If a claimant’s adjudication decision is invalidated, and the time limits for lodging a new application have expired, the claimant may lose their right to seek adjudication of that payment claim altogether. 

Further information / assistance regarding the issues raised in this article is available from the authors, Michael Gill, Partner, Nicholas Revere, Senior Associate, or your usual contact at Moray & Agnew.