BCIPA compliance required despite final contract certificate

11 March 2010 Topics: Litigation and dispute resolution, Construction and infrastructure

The recent case of Martinek Holdings Pty Ltd -v- Reed Construction (Qld) Pty Ltd [2009] QSC 328 confirms that a Superintendent’s certificate does not automatically override an adjudicator’s decision under the Building and Construction Industry Payments Act 2001 (Qld).

In this case, the builder (Reed) had delivered a final payment claim under BCIPA to the principal, Martinek Holdings. In response, the Superintendent advised that more time was needed to assess Reed’s claim. Reed applied for an adjudication of the dispute and the adjudicator ultimately decided that the principal was required to pay Reed $919,634.91.

Two days later, the Superintendent issued a final certificate certifying that $72,027.27 was owing to the principal from Reed. Reed served a notice disputing the Superintendent’s certificate and seeking payment of the amount of the adjudicator’s decision.

Martinek applied to the Supreme Court for a stay of the decision made by the adjudicator to prevent Reed from enforcing the adjudicator’s decision in court. Martinek argued that the Superintendent’s final certificate established on a final basis what was owed under the contract and that it, in effect, “undid” the effect of the adjudicator’s decision.

Justice White did not accept this argument and dismissed Martinek’s application for a stay. Her Honour noted that as Superintendent’s final certificate was disputed, it could not be said to represent the final position between the parties and could not override the adjudication decision.

The decision was challenged on appeal. The Court of Appeal agreed with Justice White and held that in this case the Superintendent’s certificate could not trump the effect of the adjudication decision.

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