Gulf Civil Pty Ltd v K & F Group Pty Ltd [2026] QSC 221

Michael Creedon  |  Charlotte Gordon  |  Sarah Nichols

Key takeout

• A hire agreement stated to be ‘ongoing until return of machinery’ may stay on foot, and support a security of payment claim, while any single item remains deployed.
• A solicitor’s letter affirming that a hire agreement remains in place can confirm a ‘construction contract’ or itself create an ‘other arrangement’ under section 64 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).
• A party challenging an adjudicator’s jurisdiction bears the onus of proving there was no construction contract. Gaps in evidence count against it.

Facts

On 20 March 2022, K & F Group Pty Ltd (K & F) and Gulf Civil Pty Ltd (Gulf Civil) entered into a document for the hire of plant (Hire Agreement). The Hire Agreement identified K & F as the ‘Owner’ and Gulf Civil as the ‘Hirer’. At the time, both companies were controlled by Owen Whish (Whish).

The Hire Agreement was to be read in conjunction with the ‘Agreement Particulars’. The Agreement Particulars were to be entered into on each and every occasion that K & F hired plant to Gulf Civil. However, only one set of Agreement Particulars was ever prepared (on 20 March 2022).  It recorded a commencement date, described the duration as ‘ongoing until return of machinery’, and listed 22 items of plant and equipment with hourly and monthly hire rates.

The plant and equipment listed in the Agreement Particulars was subsequently deployed and used by Gulf Civil. As time went on, items were returned to K & F’s depot and redeployed from time to time.

In mid-2025, Whish entered negotiations for the sale of Gulf Civil and also offered to sell the deployed K & F equipment to Gulf Civil. On 4 August 2025, Haribol Civil Pty Ltd acquired all the shares in Gulf Civil. At meetings on 4 and 5 August, Whish told Gulf Civil’s new owner that Gulf Civil could use the deployed plant free of charge while it considered whether to buy it. Some weeks later, Gulf Civil declined to purchase the plant. 

On 27 August 2025, K & F purported to terminate the Hire Agreement on 14 days’ notice.  On 19 September 2025, Gulf Civil’s then solicitors responded (19 September Letter). The letter stated that the Hire Agreement set out the basis on which K & F had hired the plant to Gulf Civil, that K & F had no unilateral right to terminate it, and that it would end when the plant was returned. Gulf Civil progressively returned the plant, with all items returned by December 2025.

On 2 January 2026, K & F issued a payment claim for $1,143,388 to Gulf Civil. The payment claim was made under the BIF Act and claimed hire charges, repair costs, loss-of-use damages, servicing and compliance costs, and a demobilisation charge. Hire charges for each item ran from 4 August 2025 (the date of the share sale), and most were calculated using rates said to be drawn from the Agreement Particulars.

On 23 January 2026, Gulf Civil issued a payment schedule in response to K & F’s payment claim. The payment schedule assessed the amount payable as ‘$nil’, noting that there was no clear contractual basis for the entitlement. Gulf Civil claimed that the hire charges were not properly incurred under the Hire Agreement and that it never accepted that such charges would accrue after completion of the share sale.

On 6 March 2026, K & F applied for adjudication under the BIF Act. On 7 May 2026, the adjudicator determined K & F was entitled to $301,768.

By application to the Supreme Court of Queensland, Gulf Civil sought orders that the adjudication decision be set aside or declared void for want of jurisdiction. It contended that the adjudicator erred in determining the charges were incurred under a ‘construction contract’ within the meaning of section 64 of the BIF Act.

Decision

Gulf Civil’s application was dismissed. The Court found that Gulf Civil failed to demonstrate that the adjudication decision was made in the absence of the necessary jurisdictional fact of the existence of a construction contract.

Did the Hire Agreement constitute a ‘construction contract’?

The Court found that the Hire Agreement was a ‘rolling hire agreement’.

In reaching this decision, the Court noted that there were ‘obvious oddities and inconsistencies’ in the Hire Agreement. For instance, defined terms referred to annexures or schedules that did not exist, and text was missing from the end of the document. Despite such anomalies, the Court had ‘no doubt’ that the Hire Agreement constituted a concluded agreement whereby K & F agreed to hire plant to Gulf Civil from 20 March 2022, in return for Gulf Civil paying hire charges at the rates set out in the Agreement Particulars.

The Court noted that the Hire Agreement’s ‘character’ largely turned upon the proper construction of the ‘Entire Agreement’ clause. The Entire Agreement clause required Agreement Particulars to be entered into each time plant was hired and stated that any further Agreement Particulars would be subject to the Hire Agreement’s terms. This was suggestive of a framework agreement. However, such language was also in tension with the duration stated in the Agreement Particulars (ie ‘Ongoing until return of machinery’). When considering this, the Court noted that the real issue was not how the Hire Agreement ought to be characterised in the abstract, but rather when it would end. With that focus, the Court found that the Hire Agreement was properly characterised as a ‘rolling hire agreement’. That was apparent from reading the entire agreement, having regard to its context and the commercial purposes or objectives it sought to secure.

The Court concluded that a reasonable businessperson would have understood that the Hire Agreement was intended to provide for ‘a continuing, rolling hire agreement’. The Court construed the duration in the Agreement Particulars to mean ‘ongoing until the return of all machinery’. That interpretation was consistent with clause 37(c) of the Hire Agreement, which stated, ‘the singular includes the plural’.

The Court noted that Gulf Civil’s construction would produce an ‘unwieldy result’ and one which would ‘frustrate the commercial objects that were sought to be secured by the contract’. That is, each item would only be hired for one discrete ‘Hire Period’ and could not be remobilised without entering into a new set of Agreement Particulars. When considering the alternative construction, the Court suggested that ongoing projects requiring the use of the plant could be unnecessarily delayed until further Agreement Particulars were finalised. There would also be ‘a slew of different Agreement Particulars unnecessarily accumulating’, which could not have been the parties’ intention.

Was the Hire Agreement still on foot as of 4 August 2025?

The Court found that the Hire Agreement remained on foot as of 4 August 2025.

In reaching this decision, the Court noted that there was no evidence of when and how the 22 items listed in the Agreement Particulars were returned and redeployed. However, it seemed more likely than not that most of the items had been returned at some time. Notably, the evidence did not establish that all items had been returned at any one point in time (which would have brought the Hire Agreement to an end). In particular, a dozer listed in the Agreement Particulars had remained deployed at Gulf Civil’s Jardine River project since 2024. As a result, the Court rejected the argument that there was no ‘construction contract’ from 4 August 2025 onwards.

The Court held that the 19 September Letter confirmed the existence of the Hire Agreement as a ‘construction contract’ (with effect from at least 4 August 2025). Whish’s ‘free of charge’ statement did not change this. Whatever its effect on Gulf Civil’s liability for hire charges in the interim, it did not affect the Hire Agreement’s continued existence. In the alternative, the Court held that even if it was wrong about the proper construction of the Hire Agreement, the 19 September Letter would nonetheless amount to an ‘other arrangement’ under section 64 of the BIF Act. Once the 19 September Letter was sent, there was a concluded, bilateral state of affairs under which K & F undertook to supply (and had supplied) plant for hire to Gulf Civil. By its conduct, Gulf Civil adopted and confirmed the arrangement documented in the Hire Agreement.

The Court considered that Gulf Civil’s adoption of the Hire Agreement operated retrospectively from 4 August 2025 but held that this was ‘immaterial’. According to the Court, the 19 September Letter showed that there was an arrangement constituting a ‘construction contract’ (at least from 19 September). That was all that was required for the adjudicator to have jurisdiction to decide the application. Any errors about entitlement to particular hire charges or charging periods were errors within the adjudicator’s jurisdiction and did not invalidate the decision.