Downer EDI Rail Pty Ltd v DT Infrastructure Pty Ltd [2025] QSC 212

Sian Keast  |  Stephanie Murphy | Charlotte Kath

Key takeouts

An adjudication application is taken to have been withdrawn where payment of the amount genuinely in dispute occurs before an adjudicator decides the application under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).

Withdrawal may be taken to have occurred, despite some of the amounts included in a payment claim the subject of an adjudication application, which are not expressly addressed in the adjudication application or submissions in support of it, remaining unpaid.

Facts

In June 2023, Downer EDI Rail Pty Ltd (Downer), as a contractor, and DT Infrastructure Pty Ltd (DTI), as a builder, entered into a contract for the design and construction of a train maintenance and stabling facility at Ormeau.

• On 24 February 2025, DTI served a payment claim on Downer for just over $22 million (payment claim).
• On 17 March 2025, Downer served a payment schedule, certifying payment in the of $13.5 million (payment schedule).
• The approximate $8.7 million difference between amounts included a sum for variation claims of $681,445.37.
• On 30 April 2025, DTI applied for adjudication in respect of the payment claim (adjudication application).
• On 1 May 2025, DTI served Downer a copy of its adjudication application, submissions and other supporting material.

DTI sought a determination that Downer pay DTI the amount of $681,445.37, comprising the value of variation numbers 41 and 53 in the payment claim. The claims, submissions, witness statements, and other documents in support of the adjudication application were limited to the two identified variation claims.  They did not address any other part of the $8.7 million difference between the payment claim and payment schedule.

Before an adjudication decision was made, Downer paid DTI the sum of $681,445.37 plus interest on this amount. Downer sought a declaration that, by having paid the sum for which the decision was sought, the adjudication application was taken to have been withdrawn by DTI per section 97(1)(b) of the BIF Act.

Decision

Justice Treston ordered a declaration that the adjudication application was taken to have been withdrawn by DTI and for DTI to pay Downer’s costs associated with the legal proceedings.

Substantive Issue

The substantive issue was whether the adjudication application was taken to have been withdrawn, where the amount paid by Downer was only in respect of the variations in issue and not the total amount of the payment claim.

Section 97(1)(a) of the BIF Act provides that an adjudication application is withdrawn if the claimant gives the adjudicator and respondent a written notice of discontinuation, while section 97(1)(b) provides that an adjudication application is taken to have been withdrawn where, before the adjudicator decides the application, the respondent pays ‘the claimant the amount stated in the payment claim the subject of the adjudication application.

DTI’s submissions

DTI submitted that the words ‘the subject of the adjudication’ in section 97(1)(b) of the BIF Act refer to the amount of the payment claim itself and not just particular amounts expressly addressed in the adjudication application or submissions. DTI submitted, therefore, that for the adjudication to be ‘taken to be withdrawn’, the whole of the payment claim, or at least the whole amount not expressly abandoned by DTI, would have had to be paid.

Court’s contextual approach

The Court did not accept DTI’s construction of section 97(1)(b), stating that the correct interpretation was that an application or, relevantly a part of it, was taken to be withdrawn where there had been satisfaction of the amount in dispute.

Treston J considered a contextual approach to reading the section that linked the words ‘the subject of the adjudication’ to the words ‘the amount’ was correct because the process is intended to be fast and efficient and exclusively identify those matters genuinely in dispute.

Her Honour also had regard to the following provisions of the BIF Act which supported Downer’s approach to interpreting the section:

• Section 75(5) permits a later payment claim to bring forward those parts of the payment claim in issue that remain unpaid, meaning the unpaid parts of the payment claim is not abandoned.
• Section 79(3) and (4), provide that the adjudication application may be accompanied by submissions relevant to the application, which will be given to the respondent within 4 business days after making the application, with the purpose of the giving of submissions, which narrow the matters in dispute, being to allow the respondent to respond to the actual matters in issue.
• Sections 84 and 85 are directed towards allowing the adjudicator to decide the disputed amounts as quickly as possible, supporting a construction that that the adjudicator is not required to decide matters not genuinely in dispute.
• Section 88(2) sets out the matters the adjudicator must consider, including at (c) and (d), the parties’ submissions. Therefore, requiring the adjudicator to consider matters pertaining to approximately $8.7 million worth of claims, where both parties’ submissions were confined to $681,445.37, would be an onerous construction of the legislation.