York Property Holdings Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd & Ors [2025] QSC 286

David Pearce | Stephanie Murphy | Siobhan Beckett

Key takeout

• The text and structure of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) support the conclusion that the existence of a reference date is an objective jurisdictional fact.  Accordingly, the question of whether a reference date exists is not a question the adjudicator is entitled to get wrong.
• The duty to afford procedural fairness does not have fixed content, rather it conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the case. However, where an adjudicator comes to a particular decision on a ground neither party has contended, then the requirements of natural justice mean the adjudicator must give the parties notice of that intention.

Facts

In August 2021, York Property Holdings Pty Ltd (York) engaged Tomkins Commercial & Industrial Builders Pty Ltd (Tomkins) to construct the Midwater apartments at Main Beach, Gold Coast (Contract).

In September 2024, Tomkins terminated the Contract following an alleged breach by York. 

In October 2024, Tomkins submitted Payment Claim 36 claiming $57.5 million.  Tomkins’ position was that the termination was valid and therefore there was a reference date under s 67(2) of the BIF Act, which provides that the final reference date for a contract is the date the contract is terminated.  In response, York served a payment schedule stating that no amount was payable to Tomkins. York’s position was that Tomkins’ termination was invalid and the Contract remained on foot.  York served a notice under clause 39.4 of the Contract in September 2024 purporting to take work out of Tomkins’ hands.  York argued the effect of this was to suspend Tomkins’ right to payment, meaning there was no reference date for a payment claim.

In December 2024, Tomkins lodged an adjudication application in relation to Payment Claim 36.  In April 2025, the adjudicator delivered his decision by which he determined that York was to pay Tomkins $10 million (Adjudication Decision).

York applied to the Supreme Court seeking a declaration that the Adjudication Decision was affected by jurisdictional error and void.  Tomkins’s position was that York’s application should be dismissed.

The primary question in dispute was whether a ‘reference date’ under s 67(2) was:

• an objective jurisdictional fact requiring court determination based on evidence; or
• subjective, where the court must decide whether the adjudicator arrived at the required state of mind in the way contemplated by the legislature.

Other issues concerned whether York was denied procedural fairness arising from the adjudicator’s reliance on Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445 (Allianz), the adjudicator’s finding that one of York’s letters constituted a Contract variation, and whether the adjudicator made a jurisdictional error by finding that Tomkins was entitled to certain termination costs.

Decision

Reference Date as Objective Fact

The critical legal question was whether the existence of a reference date for Payment Claim 36 under section 67(2) of the BIF Act is a ‘subjective jurisdictional fact’ or an ‘objective jurisdictional fact’.

Wilson J noted that the existence of a reference date under a construction contract is a precondition to the making of a valid payment claim.  However, the terms of s 67(2) were neutral on the issue of whether the requirement is an objective or subjective jurisdictional fact.  It was therefore a question of statutory interpretation.  Her Honour concluded that the text and structure of the BIF Act support the conclusion that the existence of a reference date is an objective jurisdictional fact.

The fact that an adjudicator is required to determine its jurisdiction, does not mean the existence of a reference date becomes a matter for subjective determination. The valid exercise of an adjudicator’s jurisdiction is conditioned on the decision having been made in relation to a valid payment claim, which in turn requires the claim to have been made from a reference date, and the question of whether a reference date exists is not a question the adjudicator is entitled to get wrong.

Procedural Fairness – Allianz

York submitted that the adjudicator’s consideration of Allianz was a denial of procedural fairness as neither party referred to this case in its submissions, nor was York given an opportunity to address the adjudicator on its relevance.

Wilson J noted that the duty to afford procedural fairness does not have fixed content, rather it conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the case.  The purpose of the BIF Act and the nature of an adjudication confine what the duty to act fairly requires.  In an adjudication, the parties must anticipate possible findings and make submissions on them.  If an adjudicator comes to a particular decision on a ground neither party has contended, then the requirements of natural justice require the adjudicator to give the parties notice of that intention. However, in this case the adjudicator did not come to a determination on a ground that neither party had contended for. Both parties were alive to the issue in question i.e. waiver and addressed them in the submissions referring to other cases.  Although the adjudicator went on to refer to Allianz, which he regarded as dealing with a form of waiver, that did not amount to a denial of procedural fairness.  York had the opportunity to address waiver in its submissions and chose to confine its submissions rather than looking at the concept, or the doctrine of waiver more broadly.

Unfixed Materials

The adjudicator found that Tomkins was entitled to $7.2 million for unfixed materials. The adjudicator found that a letter sent by York in August 2024 instructing Tomkins to leave unfixed material on site was a variation under clause 36.1 of the Contract.  York submitted it was denied procedural fairness because the adjudicator did not give notice of his intention to find that the letter was a variation.

Wilson J found that on this question there was a material denial of procedural fairness by the adjudicator.  York did not receive notice of the variation finding, nor should it “reasonably have anticipated” that the adjudicator would go down the path of finding a variation to the Contract. The requirements of natural justice required the adjudicator to give the parties notice of his intention to decide the issue in the way he did and allow them to make submissions. He did not.

Termination Costs

Tomkins claimed $11.4 million in termination costs, arguing that clause 39.10 created an express contractual right to recover all damages which would otherwise have been available in circumstances where a common law claim for repudiation existed.  The adjudicator found that clause 39.10 only preserved each party’s common law rights to damages, not that it created an entitlement to recover damages under the Contract.  The adjudicator also accepted York’s argument that where a Contract had been terminated, all subsequent claims are claims for damages.  The adjudicator then considered different types of termination costs to determine whether they fell within the scope of clause 39.10.  The adjudicator awarded Tomkins $1.2 million, comprising demobilisation costs, staff costs, items that Tomkins left on site, and overheads.  In making this finding, the adjudicator concluded that if damages referred to in the Contract form part of the increased cost or price of construction work actually carried out, those damages are for construction work carried out.  This was not a ground upon which Tomkins advanced its claim. The court determined that there was a material denial of natural fairness as the adjudicator allowed the claim on a basis not contended for by Tomkins and did not give York the opportunity to address it.  The adjudicator did not accept Tomkins’ submission as to its entitlement to termination costs pursuant to clause 39.10.  Wilson J stated that should have been the end of the matter, unless the adjudicator gave the parties notice of the basis upon which the adjudicator made his determination.