Tomkins Commercial & Industrial Builders Pty Ltd v Starline Interiors Pty Ltd [2025] QSC 226

Sarah Ferrett  |  Hazel Gacka | Oliver Conroy

Key takeouts

In an adjudication decision under the Building Industry Fairness (Security of Payment) Act 2017 Act (Qld) (BIF Act), a mistake by the adjudicator of fact or in law will not lead to the adjudication decision being set aside for jurisdictional error.

However, where an adjudicator fails to consider a ‘centrally important matter’ such as a payment schedule in reaching their adjudication decision, the decision will be determined void on the grounds of jurisdictional error.

Where an adjudicator departs from an agreed approach as to how the adjudicated amount should be calculated, the adjudicator must call for further submissions from the parties as a matter of procedural fairness.

Facts

Tomkins Commercial & Industrial Builders (Tomkins) was the head contractor for the construction of a 39-storey residential tower on the Gold Coast. In November 2023, Tomkins subcontracted Starline Interiors (Starline) to perform fit out and completion works under a lump sum contract.

In September 2024, Tomkins terminated its subcontract with Starline following the termination of the head contract between Tomkins and the principal on the same day. Starline’s works were still in progress at the time of termination.

In October 2024, Starline issued its tenth and final progress claim (Final Progress Claim) to Tomkins seeking payment of $1.9 million. The previous nine progress claims by Starline had been dealt with under the subcontract without dispute.

For the Final Progress Claim, however, Tomkins certified only $101,926.37 as payable to Starline in its payment schedule (Payment Schedule). The discrepancy between the parties arose from conflicting views as to the percentage of the subcontract works completed by Starline at the time the subcontract was terminated.

Adjudication

In December 2024, Starline lodged an adjudication application. Starline did not seek payment of the full amount in the Final Progress Claim. Rather, Starline claimed a revised sum of $1.2 million (Revised Claim).

Starline explained the difference in the amount claimed stemmed from the calculation method used. Whereas the Revised Claim was calculated by ascertaining the value of work performed by Starline less amounts previously certified by Starline, the Final Progress Claim had been calculated by deducting the amount previously paid by Tomkins. Starline also accepted that the Final Progress Claim included duplicate costs for unfixed items and goods, which were removed and reconciled in the Revised Claim.

In February 2025, Tomkins filed an adjudication response. In the adjudication response, Tomkins accepted the amount due and payable was to be calculated in the way Starline had done in the Revised Claim. This method involved:

(a)     first, determining the total cumulative amount due in relation to all works performed under the subcontract; and

(b)      then, deducting from that amount, the total cumulative amount which had been certified in relation to the ninth payment claim.

In April 2025, the adjudicator awarded Starline $1.3 million, being an amount greater than the Revised Claim.

In reaching this decision, the adjudicator determined the value of the work performed by Starline and then deducted the amounts previously paid (the approach taken by Starline in the Final Progress Claim) as opposed to deducting the amounts previously certified by Tomkins (the approach taken by both parties in the adjudication).

Tomkins applied to the Supreme Court of Queensland seeking a declaration that the adjudication decision be ruled void for jurisdictional error on the grounds that the adjudicator awarded a higher amount than sought in the adjudication application.

Decision

Justice Muir found the adjudication decision was affected by jurisdictional error and therefore void.

Tomkins’ submission for jurisdictional error was on two grounds that the adjudicator:

1. failed to consider a centrally important matter; and
2. denied the parties procedural fairness.

Argument 1: Failure to consider centrally important matter

Tomkins submitted that the adjudicator breached section 88(2) of the BIF Act by failing to consider the Payment Schedule and the adjudication submissions of both parties.

When considering the issue, the court emphasised that an adjudicator does not need to refer to all submissions advanced on a particular issue to evidence that the submissions had been considered. However, in circumstances where an adjudicator fails to consider central material, it may be inferred that the adjudicator failed to refer to a submission on a centrally important matter, clearly articulated and based on uncontested facts.

The court found that the adjudicator’s adoption of a method of calculation contrary to the position of both parties, without inviting the parties to make further submissions, evidenced a reasonable inference that the adjudicator failed to consider a centrally important matter included in the payment schedule.

Argument 2: Denial of procedural fairness

The court reiterated the obligation for procedural fairness in an adjudication includes giving the parties the opportunity to be heard. Such a denial of procedural fairness might occur where a decision is made on a basis not advanced by either party, unless it can be said no submission could have been made which might have produced a different result.

The court emphasised that a material mistake by the adjudicator alone, whether of fact or in law, will not lead to the adjudicator’s decision being set aside for jurisdictional error.

In the decision, the court found that in circumstances where an adjudicator uses an alternative method to calculate the adjudicated amount, the parties ought to have been given the opportunity to make further submissions on this issue. The court ruled that this resulted in a substantial denial of procedural fairness on three grounds:

1. if the adjudicator invited submissions, there was a real prospect that both parties would have urged him not to calculate the adjudicated amount using the method adopted;
2. the adjudicator’s decision allowed Starline to seek orders in both the Supreme Court and District Court for the claim; and
3. the method cannot be unravelled by severing the amount certified and unpaid from the adjudicated amount.