Digital age pitfalls with BIF Act claims

Facts

Iris Broadbeach Pty Ltd v Descon Group Australia Pty Ltd [2023] QSC 290 involved a contractor and principal disputing the amount claimed by the contractor under a payment claim.

The contractor sought to secure payment through a Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) adjudication application that was lodged using an online form accessed from the QBCC website.

Shortly after the electronic submission of the application, the contractor received an email from the QBCC. That email confirmed the contractor’s submission of the adjudication application and relevantly stated, ‘Please see attached PDF for a copy of your form submission’. The document attached to QBCC’s email was a four page document described in the case as the ‘QBCC PDF Form’.

The QBCC PDF Form contained parts, but not all, of the electronic form that was completed by the contractor.

The contractor only served the QBCC PDF Form on the principal.

The adjudication application was referred to an adjudicator, who determined they had jurisdiction to determine the application. The parties then participated in the adjudication process and the adjudicator published a decision on 9 June 2023.

Court proceedings

On 16 June 2023, the principal commenced a Supreme Court of Queensland proceeding seeking orders that the adjudication decision was void because the adjudicator did not have jurisdiction.

The principal alleged that the adjudicator did not have jurisdiction because the contractor, in making the adjudication application, had failed to comply with certain procedural requirements of the BIF Act, in particular that:

• the contractor had failed provide the principal with a copy of the adjudication application as required
• the payment claim was not a valid payment claim.

Issue 1 – failure to provide a copy of the adjudication application

The BIF Act requires an adjudication application to be ‘in the approved form’ and that a ‘copy of an adjudication application must be given to the respondent’.

This issue, therefore, turned on a consideration of the approved form for an adjudication application and whether the QBCC PDF Form was a copy of the adjudication application.

The Court identified three possible forms:

• the manual form, which was available on the QBCC website to be downloaded, completed and submitted in person
• the electronic form, which was available on the QBCC website to be completed and lodged electronically
• the QBCC PDF Form, which was not available on the QBCC website, and was only provided to the contractor after it had lodged its adjudication application.

The manual form and electronic form were substantially the same document. The contractor chose to use the electronic form in this case.

Regarding this issue the Court decided that:

• the QBCC PDF Form was not the ‘approved form’
• a ‘copy’ of the adjudication application could only mean a full copy of the approved form of the adjudication application that was lodged with the QBCC
• the QBCC PDF Form was not a full copy of the approved form of the adjudication application that was lodged with the QBCC
• accordingly, the contractor – having only provided the principal with the QBCC PDF Form – had failed to comply with the requirement under the BIF Act to provide the principal with a copy of its adjudication application.

The adjudicator, therefore, had no jurisdiction to determine the matter and their determination was void.

Issue 2 – was the payment claim a valid payment claim?

For a payment claim to be valid it must be sufficiently particularised such that the person receiving the payment claim can understand the basis of the claim and the construction work to which it relates. The recipient should not have to engage in a process of reconstruction of other material in order to ascertain the basis for the payment claim.

The principal argued that the payment claim was deficient because (among other things):

• the actual work performed by the contractor was not described
• payment was sought as a percentage of the relevant category of work
• it was not possible for the principal to know, by inspecting the site, the work claimed to have been performed by certain consultants in that period
• the deficiencies in the payment claim could not be remedied by the subsequent provision of further information – the payment claim must be sufficiently detailed at the time it is given to the principal in order to be valid.

The Court, after considering the relevant authority, agreed with the principal’s submission that any information provided by the contractor after the payment claim was served was irrelevant to the determination of whether payment claim was valid.

Further, the Court decided that the payment claim did not sufficiently describe the actual work undertaken in order to be valid. It required the principal to engage in a ‘significant degree of analysis … including piecing together information from multiple sources’.

Accordingly, the payment claim was invalid and the adjudicator did not have jurisdiction to determine the matter.

The Court, therefore, ordered that the adjudication decision was void and it was set aside.

Comments

This case is another example of a long line of authority that stands for the principle that the procedural requirements of security for payment legislation must be strictly complied with. Courts recognise security for payment legislation provides special statutory rights for those seeking payment for building and construction work. To gain the benefit of those rights, parties must strictly adhere to the prescribed procedures.

Electronic web forms may facilitate the easy submission of material, but there may also be difficulties with compliance with the requirements of the BIF Act if the applicant cannot retain (or does not receive) an entire copy of that material for service. It is therefore always important to check legislative requirements to ensure any technology aligns with what is required. This is particularly so for BIF Act matters where technicalities are critical.

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