Baguley Build Pty Ltd v Olcon Concrete & Construction Pty Ltd & Anor [2025] QSC 126

Julie Whitehead  |  Laura Berry  |  Rose Dillion

Key takeouts

• A respondent must articulate in its payment schedule the reasons for withholding amounts claimed by a claimant.  In doing so, a respondent cannot simply rely on ‘previous reasons’ for withholding payments, without specifying what those previous reasons were. 
• If an adjudicator fails to consider the matters set out in s 88 (2) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act), their adjudication decision may be void on the grounds of jurisdictional error.  This is a tough hurdle for parties to overcome and a real error must be demonstrated to pass this threshold.

Facts

Background

Olcon Concrete & Construction Pty Ltd (Olcon) was subcontracted to Baguley Build Pty Ltd (Baguley) in relation to the construction of a sports facility.  On 13 July 2024, Olcon gave Baguley a payment claim in the amount of $137,075.40 for works carried out (Payment Claim).  On 25 July 2024, Baguley issued its payment schedule, certifying a $NIL amount (Payment Schedule).  The covering email sent with the Payment Schedule noted that the Payment Claim appeared to be a consolidation of previous claims and that Baguley’s position with respect to these claims had not changed.  The Payment Schedule stated that the ‘reasons for withholding payments have not changed’.

Previous Payment Claims

Olcon had issued two earlier payment claims to which Baguley issued payment schedules in response.  Those payment schedules stated that Baguley was withholding payment because of unsigned timesheets, no receipts for accommodation, inefficient work, excessive downtime and defective works.

The Adjudication

On 13 August 2024, Olcon submitted an adjudication application in respect of the Payment Claim and Payment Schedule. Olcon contended that the effect of sections 69(c), 82(4) and 88(2)(d) of the BIF Act was that Baguley could not use ‘past reasons’ that were not expressly set out in the Payment Schedule.  

Baguley contended that:

• it was permissible for a payment schedule to incorporate reference to material extrinsic to the payment schedule where that material was identified with sufficient particularity; and
• Olcon was aware of the Baguley’s reasons for withholding payment because it had identified those reasons in its adjudication application.

The Adjudicator found in favour of Olcon in applying s 82(2)(d) of the BIF Act.  They determined that only the Payment Schedule relevant to the current adjudication application could be considered. References to the previous payment schedules or unchanged reasons were deemed insufficient for the purpose of identifying what amounts were in dispute in response to the Payment Claim.

Baguley applied to the Supreme Court of Queensland for a declaration that the adjudication decision was void.  Baguley argued that a jurisdictional error occurred because:

1. the Adjudicator incorrectly applied s 82(4) of the BIF Act in characterising Baguely’s submissions in the adjudication response as new reasons for withholding payment; and
2. the Adjudicator was wrong not to recognise that the reasons in a payment schedule may be incorporated by referring to earlier payment schedules and correspondence between the parties.

Decision

Copley J. dismissed Baguley’s application, finding that the Adjudicator had not fallen into jurisdictional error.

The court concluded that the Adjudicator had appropriately considered the Payment Schedule on two grounds.  As the Payment Schedule contained limited reasons, the Adjudicator did not regard it as persuasive due to the lack of specificity regarding the reasons for withholding payment in relation to the claimed items, and their value.  Furthermore, as the additional reasons in Baguley’s adjudication submissions were not included in the Payment Schedule, they were ‘new reasons’ and could not be considered.

The court noted that the statutory function of the Adjudicator was to consider a payment schedule, along with all submissions, including relevant documents.  So long as this was performed, then an adjudicator has discharged the functions required of them by the BIF Act.  Baguley failed to establish that the Adjudicator had not considered the matters set out in s 88(2) of the BIF Act, and consequently, did not demonstrate that the adjudication decision should be void for jurisdictional error.