Forme Two Pty Ltd v McNab Developments (Qld) Pty Ltd [2025] QSC 96

Sarah Ferrett | Ren Shike | Charlotte Kath

Key takeouts

• A contractor must make a payment claim for work within six months of completing that work, in order for the payment claim to be valid under section 75(2)(b) of the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act).
• However, a contractor may make a claim for historical work, as long as the payment claim also includes a claim for work completed within six months of the payment claim.
• Compliance with section 75(2) is a jurisdictional fact, such that an adjudicator must be satisfied that the payment claim contains a claim for work completed in the six months immediately prior to the claim in order for their jurisdiction to be enlivened.

Facts

In August 2022 Forme Two Pty Ltd (Forme Two) engaged McNab Developments (Qld) Pty Ltd (McNab) to develop design drawings for a development in New Farm, under an unsigned contract.

On 17 January 2024 McNab sent a purported payment claim under the BIF Act, to which Forme Two responded with a payment schedule certifying $nil (with reasons) on 18 February 2024. McNab lodged an adjudication application, challenging the payment schedule. An adjudication decision was made on 20 March 2024 in the sum of $162,505 in favour of McNab (adjudication decision).

On 12 April 2024 Forme Two filed proceedings in the Supreme Court, alleging that the adjudication decision was void for jurisdictional error because it was based on an invalid payment claim under the BIF Act.

Forme Two’s primary argument

Section 75(2)(b) of the BIF Act, provides that ‘[u]nless the payment claim relates to a final payment, the claim must be given before … the period of 6 months after the construction work to which the claim relates was carried out or the related goods and services to which the claim relates were last supplied‘.

The parties agreed that the payment claim did not include any claim for an amount for work undertaken in the six months prior to the payment claim being delivered. Therefore, Forme Two argued that the payment claim was invalid because it did not comply with section 75(2)(b) of the BIF Act, and therefore the adjudication decision was void for jurisdictional error.

Decision

The court granted the application, finding that the adjudication decision was affected by jurisdictional error and void.

Issue 1: Characterisation of work required by section 75(2)(b)

In order to be a valid payment claim under section 75(2)(b), the payment claim must include a claim for work carried out in the six months prior to the giving of the payment claim. McNab contended that this was nonsensical because it would allow a claim for work completed over six months prior if it contained a claim for at least one piece of work completed within six months. While Hindman J agreed that historically completed work can be claimed if it is included in a payment claim with recent work, she found it was not nonsensical but rather consistent with section 75(5) which permits claims for amounts included in previous payment claims.

Issue 2: Characterisation of work required by section 75(2)(b)

Hindman J found that compliance with 75(2)(b) of the BIF Act to be a ‘basic and essential requirement of the validity of the adjudication decision‘, such that it is a jurisdictional fact. While McNab argued that it was not a jurisdictional fact because the issue can require interpretation by the adjudicator, Hindman J found that it was a jurisdictional fact because, in accordance with the test in Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd [2018] NSWCA 339, it is a matter ‘readily determined’. The fact that some cases may be factually complex is not determinative.

Given that the payment claim did not contain any claims for work completed within six months of the payment claim, the payment claim was invalid under section 75(2)(b) of the BIF Act. As the adjudication decision relied upon an invalid payment claim, the adjudication decision was void for jurisdictional error.