Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2025] QSC 147

Michael Creedon  |  Elissa Morcombe  |  Charlotte Kath

Key takeouts

A decision by an adjudicator that they do not have jurisdiction to determine an adjudication application; or not to issue a decision, is not a substantive adjudication decision under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).

Adjudicators are not required to consider payments made by a respondent after the delivery of the respondent’s payment schedule. Unless an issue (including any subsequent payment) is a factual matter that existed at the time of the payment schedule and is clearly raised in a payment schedule, it is considered a ‘new reason’ within the meaning of section 82(4) of the BIF Act and an adjudicator must not have regard to it.

Facts

In December 2021, Bright Days Herston Pty Ltd (Bright Days) and ATG Project & Property Solution Pty Ltd (ATG) entered into a construction contract whereby ATG undertook to design and construct a childcare centre (contract).

• on 25 September 2023, ATG served a payment claim on Bright Days for the sum of $1.3 million;
• on 10 October 2023, the Superintendent issued a progress payment certificate in the amount of $782,738
• on 17 October 2023, Bright Days served a payment schedule on ATG scheduling an amount of $71,158 for payment. This payment schedule included a reference to a credit balance of $369,148.33;
• on 19 October 2023, ATG made an application for adjudication under the BIF Act which was accepted by the adjudicator, Mr Trattler;
• on 20 October 2023, Bright Days’ solicitors wrote to Mr Trattler, raising a potential conflict of interest under subsection 80(b) of the BIF Act; and
• on 1 November 2023, Bright Days paid ATG $719,435.45.

Mr Trattler responded to both parties, stating that while his employer engaged the same solicitors as Bright Days on an unrelated matter he did not consider there was not a conflict of interest, however, acknowledged there was a possibility of a perceived conflict of interest. Subsequently, Mr Trattler advised both parties that he did not intend to issue a decision given Bright Days’ objections, following which he confirmed that an adjudication decision had not been made within the time required by the BIF Act.

ATG requested the Adjudication Registrar refer the adjudication application to another adjudicator and in December 2023, Mr Morrow (adjudicator) confirmed acceptance of that application. In January 2024, the adjudicator delivered the adjudication decision, finding that $1,004,306.52 was payable to ATG (adjudication decision).

Bright Days applied to the Supreme Court of Queensland seeking a declaration that the adjudication decision was void for jurisdictional error and should be set aside on two grounds:

1. there was no valid referral to the adjudicator; and
2. the adjudicator failed to consider submissions.

Decision

Treston J. dismissed Bright Days’ application.

Ground 1: No valid referral

Bright Days’ primary submission was that the referral to the adjudicator was invalid, because Mr Trattler’s decision not to decide the application was still a decision made under the Act. Treston J had regard to the definition of “adjudicating” in section 95(9) of the BIF Act, which comprised three elements: accepting, considering and deciding.

Bright Days’ submission was rejected. The court reasoned that if an adjudicator’s preliminary decision that they did not have jurisdiction was itself a decision, an adjudicator would not have to consider and decide any of the substance of the application and would still be entitled to payment. Further, section 94(1) of the BIF Act, which provides that a claimant may make a new application in circumstances where an adjudicator does not decide an application within the required period, would never have any work to do because on any occasion an adjudicator decided they did not have jurisdiction, without considering the substance of the application, no new application could ever be made.

Ground 2: Failure to consider submissions

Bright Days made the following three submissions:

1. the adjudicator failed to consider submissions about the first ground;
2. the adjudicator failed to consider Bright Days’ submissions about a payment which Bright Days had made to ATG after the payment schedule had been served, but before adjudication decision was issued; and
3. in failing to consider Bright Days’ submissions about that subsequent payment, the adjudicator failed to determine the amounts off the progress payment to be paid as required by section 88(1)(a) of the BIF Act.

Treston J found that the adjudicator had not failed to take account of the submission that he was ineligible, stating that the question of whether an adjudicator considered all submissions as imposed by section 88(2)(d) of the BIF Act should be considered in the context of the whole content and tenor of the adjudication and not by reference to the presence or absence of explicit statements.

In considering points 2 and 3 above, Treston J stated that the core dispute came down to whether the payment schedule identified (expressly, or by inference or incorporation) Bright Days’ subsequent payment of $719,435.45.  Where it did not, Bright Days was precluded on relying upon the payment in the adjudication as it constituted a new reason within the meaning of section 82(4) of the BIF Act.  A respondent must not include any new reasons for withholding payment that are not included in the payment schedule. The court found that a mere assertion in the payment schedule that Bright Days had money owing to it as part of the ‘credit balance’ did not warrant consideration of the November 2023 payment by the adjudicator. The payment could not be said to be an explanation of an issue raised in the payment schedule when it was not a factual matter that existed at the time of the payment schedule. For this reason, the adjudicator’s failure to consider Bright Days’ credit balance, was not a centrally important matter, clearly articulated and based on uncontested facts.