Paladin Projects Pty Ltd v Visie Three Pty Ltd & Ors [2024] QSC 230

Sian Keast  |  Matt Hammond  |  Siobhan Beckett

Key takeouts

• An adjudicator has the ability to determine the date of practical completion and will not fall into jurisdictional error if they select a date not submitted by either party to the adjudication.  The parties’ submissions as to the date of practical completion set the ‘outer limits’ for an adjudicator and an adjudicator is entitled to arrive at a date within those limits.

• This decision also reiterated that where only part of an adjudication decision is found to be affected by jurisdiction error, that part of the decision can be severed, leaving the rest of the determination in force.

Facts

Visie Three Pty Ltd (Visie) engaged Paladin Projects Pty Ltd (Paladin) to design and construct 36 townhouses (contract).

In February 2024, Paladin filed an adjudication application claiming the sum of $1.4 million. In May 2024, the adjudicator published his decision determining that Visie was to pay a lesser amount to Paladin (adjudication decision). 

Paladin sought judicial review of the adjudication decision on the basis that there were three parts affected by jurisdictional error and therefore void. Specifically, these parts were Variation 60, Variation 62 and a claim for liquidated damages (LD claim). In its application, Paladin relied on s 101(4) of the BIF Act which provides if a court finds an adjudicator’s decision is affected by jurisdictional error, it may identify the part affected by error and allow the part of the decision not affected by error to remain binding.

Decision

Variation 60

Paladin claimed $418,190 for principal caused delays. However, the adjudicator determined that Paladin was only entitled to $64,572. Paladin contended that the adjudicator had improperly considered ‘new reasons’ for withholding payment, contrary to the prohibition s 88(3)(b) of the BIF Act that an adjudicator must not consider any reason for withholding payment that was not included in the payment schedule.

Paladin contended that the adjudication decision was evidence that the adjudicator engaged with Visie’s adjudication response, as the adjudicator expressly agreed with Visie’s submission that ‘variation 60 is a claim for delay damages in accordance with clause 34.9 of the Contract’. Paladin relied on this statement as the basis for the adjudicator considering Visie’s new reasons. However, the court found that Paladin had not established jurisdictional error as the adjudicator had only made a passing reference to Visie’s submissions on Variation 60, and did not adopt them.  

Variation 62

The court was required to determine whether the adjudicator considered matters beyond those listed in s 88(2) of the BIF Act or alternatively substantially breached natural justice by considering the Building and Construction Industry (Portable Long Service Leave) Act 1991 (Qld) (Leave Act) and the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).  Section 88(2) of the BIF Act provides that an adjudicator must only consider the following matters:

• the provisions of Chapter 3 of the BIF Act and, to the extent they are relevant, the provisions of Part 4A of the QBBC Act;
• the provisions of the relevant construction contract;
• the payment claim to which the application relates, together with all submissions, including relevant documents, that have been properly made by the claimant in support of the claim;
• the payment schedule, if any, to which the application relates, together with all submissions, including relevant documents, that have been properly made by the respondent in support of the schedule; and
• the results of any inspection carried out by the adjudicator of any matter to which the claim relates.

The court found that the adjudicator had contravened s 88(2) of the BIF Act. This was because the adjudicator impermissibly relied on the Leave Act and the QBCC Act, and the relevant provisions of those Acts formed no part of the Payment Schedule and therefore the dispute. Furthermore, the adjudicator’s focus on the entitlements under the relevant provisions of the Leave Act and QBCC Act denied both parties from making further submissions.

LD Claim

The court was asked to determine whether the adjudicator, in making the relevant part of the adjudication decision dealing with LDs, denied Paladin natural justice. There were several components to the LD Claim addressed by the court, namely: 

1. Date of Practical Completion
   The court was asked to consider whether the adjudicator committed jurisdictional error by determining the date of practical completion. Ultimately, the court found that the parties’ submissions as to the date of practical completion set ‘outer limits’, and the adjudicator was entitled to arrive at a date within the parameters of these limits. The adjudicator was not confined to accepting one of the two propositions put forward by the parties. The court found that it was clear the adjudicator had considered each parties’ submissions and the contract in determining the date of Practical Completion, and therefore did not fall into jurisdictional error.
   
2. Concession
   The court was also asked to consider whether the adjudicator denied Paladin natural justice by finding that Paladin had conceded there was an issue with the stormwater pipe – a finding that neither Paladin nor Visie contended for. The court found that ‘concession’ should not be considered in a strict legal sense and that even if the requirement to seek further submissions from the parties’ before the finding did arise, Paladin had not established that if further submissions were made by it that the adjudicator would arrive at a different decision. Therefore, the adjudicator did not fall into jurisdictional error.
   
3.  Responsibility under the Development Approval Matrix
   The court was also asked to consider whether the adjudicator’s finding that the Development Approval Matrix placed the responsibility of Development Approval Condition 24 wholly on Paladin denied Paladin natural justice. However, as the Development Approval Matrix and Condition 24 was part of the Contract, and the adjudicator was permitted to consider the Contract, this finding was within the adjudicator’s remit. In any event, the requirement to seek further submissions from the parties before the finding was made did not arise, and Paladin did not establish that had it done so, accordingly there was a realistic possibility that the adjudicator would have made a different decision.
   
4. Meaning of Practical Completion
   Paladin contended that the adjudicator asked himself the wrong question in relation to the meaning of ‘Practical Completion’. The court disagreed and found that the adjudicator did not fall into jurisdictional error. This is because the adjudicator reached his decision based on the evidence and submissions of the parties and the relevant provisions of the contract. Furthermore, Paladin did not establish a realistic possibility that the adjudicator would have made a different decision had Paladin made further submissions.
   
5. EOT Claims
   As the adjudicator considered the submissions by the parties and the relevant provisions of the Contract, the adjudicator was not found to have ignored the parties’ arguments about contractual time bars in relation to EOT Claims. Furthermore, even if the adjudicator had denied Paladin natural justice, Paladin did not establish a realistic possibility that the adjudicator would have reached a different decision had Paladin made further submissions.
   
6. Civil Engineering Consultant
   The court found that there was a denial of natural justice because the adjudicator determined that the Civil Engineering Consultant Contract had been novated to Paladin (despite this not being contended for by either party). Paladin had not established that there was a realistic possibility that the adjudicator would have made a different decision with respect to the relevant EOT Claims. Therefore, this ground of jurisdictional error was not established.