York Property Holdings Pty Ltd v Tomkins Commercial Industrial Builders Pty Ltd [2025] QSC 44

David Pearce  |  Sarah Cahill  |  Jack Gibney

Key takeouts

• This case illustrates that the failure of an adjudicator to consider sections or elements of a party’s submissions or relevant documents, can amount to jurisdictional error.  
  
  
• Where an adjudicator falls into jurisdictional error in relation to a discrete component of an adjudication decision, that part of the decision may be severed under section 101(4) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).
  
  
• This case is also a reminder that any contract provision which attempts to void or suspend a statutory right to payment under the BIF Act will fall foul of section 200, which prevents parties from contracting out of the BIF Act.  
  

Facts

In August 2021, York Property Holdings Pty Ltd (York) engaged Tomkins Commercial & Industrial Builders Pty Ltd (Tomkins) to construct a 40-storey residential building at Main Beach, Gold Coast (contract).

In August 2024, Tomkins submitted a payment claim for $43 million. In September 2024:

• York issued a show cause notice on Tomkins, alleging York had committed a substantial breach;
• Tomkins served a notice terminating the contract for breach by York;
• The Superintendent issued a payment schedule responding to the payment claim certifying the amount payable as a negative amount of $957,501.70; and
• York purported to exercise its right to take work out of Tomkin’s hands and in doing so, asserted that all payments were suspended until final completion so that take-out and rectification costs could be set off against final payments owed to Tomkins.

In October 2024, Tomkins made an adjudication application under the BIF Act. 

In February 2025, the adjudicator determined that $16.8 million (adjudicated amount) was payable to Tomkins (adjudication decision). 

York did not pay the adjudicated amount to Tomkins and applied to the Supreme Court of Queensland seeking a declaration that that the adjudication decision was affected by jurisdictional error and void and sought an injunction to prevent enforcement of the adjudicator’s decision.

York contended that the adjudication decision was void for jurisdictional error on two grounds,that the adjudicator:

• erred in finding the take-out clause was void for contracting out of the BIF Act; and
• failed to properly consider the parties’ submissions, as required under the BIF Act.

The adjudicator’s construction of the contract

York argued that the contract allowed it to suspend any payments claimed by Tomkins until project completion, and that any take-out and rectification costs it subsequently incurred could be set off against the payment claim.  

Tomkins argued that the York could not suspend Tomkins’ statutory right to a progress payment for work already carried out up to the reference date for the payment claim  and that any clause in the contract that allowed for this contravened the prohibition against contracting out of the BIF Act.

The adjudicator found that relevant clause was inconsistent with the BIF Act and contravened the express provision against contracting out.

The adjudicator’s consideration of the parties’ submissions

York argued that the adjudicator failed to properly consider its submissions required by section 88(2) of the BIF Act. York contended that the adjudicator failed to consider:

• concessions by Tomkins that resulted in a reduced claim for work on the building façade from $11.8 million to $8.1 million; and
• submissions by York that increased the deductions for defective work on the façade from $4 million to $11 million.

Decision

Treston J held that the adjudication decision was infected with jurisdictional error only in relation to second ground, being the adjudicator’s lack of consideration of Tomkins’ concessions regarding the work on the building façade.  Her Honour was convinced that the adjudicator overlooked the relevant component of Tomkins’ submissions, finding that the adjudicator must not have considered the submissions sufficiently because his decision:

• repeatedly referred to the incorrect sum and made no mention of the sum actually claimed;
• described that the ‘whole amount’ was in contest, when it was not;
• failed to properly consider the evidence as to the actual value of the works;
• clearly failed to consult the secondary/supporting materials in the submissions as to the value of the claim; and
• only referenced the portions of Tomkins’ expert evidence extracted in Tomkins’ reply submission, rather than the statutory declaration they drew from.

Treston J concluded that such a material error could not have been made had the adjudicator genuinely considered the mandatory matters required by the BIF Act.

The court rejected York’s argument regarding the adjudicator’s construction of the contract.  The adjudicator determined that the relevant clauses had the effect of taking away the statutory right to payment under the BIF Act, which was akin to an attempt to contract out of the contract.  This determination fell within the valid exercise of an adjudicator’s jurisdiction, being the interpretation of terms of a contract arrived at by a process which considers the matters set out in section 88(2) of the BIF Act.  Accordingly, the court found there was no jurisdictional error related to the contract construction issue.

As the court only found jurisdictional error in relation to a discrete component of the adjudication decision, it was open to consider a severance of the part of the decision affected by jurisdictional error in accordance with section 101(4) of the BIF Act.