Tomkins Commercial & Industrial Builders Pty Ltd v York Property Holdings Pty Ltd [2025] QSC 261

York Property Holdings Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd [2025] QCA 204

David Pearce | Alexandria Hammerton | Siobhan Beckett

Key takeout

The protracted dispute between York Property Holdings Pty Ltd (York) and Tomkins Commercial & Industrial Builders Pty Ltd (Tomkins) in relation to the construction of the Midwater apartments has generated two further decisions: Crowley J’s decision on 17 October 2025 and Bradley JA’s dismissal of York’s injunction application on 24 October 2025.

The key points from these decisions are:

• While adjudicators have broad discretion, they must base decisions on proper evidence and reasoning. Failure to do so may result in jurisdictional error (Crowley J).
• The Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) prioritises builder cashflow, allocating repayment risk to principals (Bradley JA).

Facts

First Decision: Crowley J [2025] QSC 261

In August 2021, York engaged Tomkins to construct the Midwater apartments at Main Beach, Gold Coast (Contract). Disputes arose over progress payment claims. The disputes were referred to adjudication under the BIF Act. The adjudicator delivered two decisions:

1. the first adjudication decision on 1 August 2024 (First Adjudication Decision); and
2. the second adjudication decision on 22 September 2024 (Second Adjudication Decision),

(together, the Decisions).

Tomkins challenged the Decisions, seeking declarations of jurisdictional error and orders under s 101(4) of the BIF Act severing affected parts and adjusting amounts payable.

First Adjudication Decision

In March 2024, Tomkins gave York Payment Claim No. 30, in which it claimed the amount of $13,469,098.11. In response York gave Tomkins Payment Schedule No. 30, which scheduled the amount of $416,681.40 for payment. By the First Adjudication Decision, the adjudicator determined that the amount payable in respect of Payment Claim No. 30 was $4,072,889.77.

In its adjudication application, Tomkins claimed that there was no basis for any deduction by York and claimed that the only contractual provision identified by York in Payment Schedule No. 30 (clause 29.3) was not applicable and further claimed that works York alleged were defective were in fact works that were incomplete and in progress and it was therefore inappropriate or premature for York’s Superintendent to determine that the works were defective.

In its adjudication response, York agreed that clause 29.3 of the Contract was not applicable but claimed that it was nevertheless entitled to deduct amounts from Tomkins’ claim pursuant to clause 37.7 of the Contract for the consultant works amount and, pursuant to s 72(1)(b) of the BIF Act, for the defective construction works.

Tomkins challenged the First Adjudication Decision alleging the following jurisdictional errors:

• the adjudicator impermissibly considered new reasons for withholding payment that were not included in Payment Schedule No. 30 (Jurisdictional Error 1);
• in doing so the adjudicator denied Tomkins procedural fairness (Jurisdictional Error 2);
• the adjudicator failed to consider Tomkins’ submissions, including the material referred to and attached to its submissions (Jurisdictional Error 3); and
• the adjudicator failed to consider the provisions of the Contract and Tomkins’ submissions about those provisions (Jurisdictional Error 4).

Second Adjudication Decision

In May 2024, Tomkins submitted Payment Claim No. 32 for $22,422,601.15, and York responded with Payment Schedule No. 32, scheduling -$1,209,103.68 for payment. Pursuant to the Second Adjudication Decision, the adjudicator determined that the amount payable in respect of Payment Claim No. 32 was $920,892.17.

In the Second Adjudication, Tomkins challenged three deductions ultimately allowed by the adjudicator:

• $200,000 for defective works;
• $4,764,178.27 for the façade; and
• $150,000 for pipework.

Tomkins rejected that the works were defective, submitting that the Superintendent’s concerns comprised “pure opinion” from York’s building inspector without proper basis, that the works were simply incomplete or in progress rather than defective, and that problems involved design issues for which York was solely responsible.

For most items, the adjudicator accepted York’s evidence and allowed the deductions, relying on s 72(1)(b) of the BIF Act (which allows for deductions based on the estimated cost to rectify defects).

For the façade deduction (over $4.7 million), the adjudicator accepted York’s claim that the entire façade “may” require removal and replacement based on the absence of Form 15 certification, and valued the estimated rectification costs at $4,764,178.27 – the exact amount previously paid to Tomkins for the façade works – even though there was no actual evidence of the cost to rectify the allegedly defective work.

Decision

First Adjudication Decision – Dismissed

Crowley J dismissed Tomkins’ challenge to the First Adjudication. While the adjudicator erred by considering clause 37.7 of the Contract – a new reason for withholding payment not included in York’s payment schedule – this error was immaterial. The Court found that the adjudicator’s reliance on s 72(1)(b) of the BIF Act alone was sufficient to justify the deductions for rectification of defects. Importantly, the Court held that s 72(1)(b) was not a “new reason” requiring express mention in the Payment Schedule, as the adjudicator was statutorily required to consider it under s 88(2)(a) of the Act. Accordingly, none of the alleged jurisdictional errors were established, and Tomkins’ application was dismissed insofar as it related to the First Adjudication Decision.

Second Adjudication Decision – Partial Success

The Court found that the adjudicator made a jurisdictional error when valuing the deduction for the façade works. The adjudicator did not actually find the work was defective and relied on an amount (previously paid to Tomkins) that was not a proper estimate of rectification costs. As a result, the Court declared the relevant paragraphs of the Second Adjudication Decision were void, severed them, and increased the amount payable to Tomkins by $4,764,178.27. The rest of Tomkins’ application regarding the Second Adjudication Decision was dismissed.

Second Decision: Bradley JA [2025] QCA 204

In October 2025, one week after Crowley J delivered the First Decision, York made an urgent application for an injunction to prevent payment of the $4.76 million façade sum to Tomkins from an escrow account. York also sought orders to prevent Tomkins from enforcing its contractual and statutory rights, until the determination of York’s appeal against Crowley J’s decision.  York argued that the adjudicator impliedly found the façade work defective and that there was evidence that the rectification costs were genuinely estimated to be $4.76 million.

Bradley JA assessed York’s case as weak and that its prospects of success appeared poor, as it required the Court to accept York’s contention that the adjudicator impliedly made certain findings, which differed from his express findings.  On the question of where the balance of convenience lay, His honour rejected the argument that Tomkins might not be able to repay the sum of $4.76 million stating that none of the evidence put before the Court allowed it to conclude that Tomkins would not repay any amount if York was successful in its appeal.  Bradley JA also emphasised that the policy behind the BIF Act was to preserve builder cash flow.  The risk that a builder might not be able to refund money paid to it in accordance with the BIF Act sits with the principal.  York’s application was dismissed.