Vantralia Pty Ltd v Redline Water Infrastructure Pty Ltd [2023] QSC 291

Andrew Orford  |  James Knell |  Lochlan Andrew

Key takeout

Under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) final payment claims must be delivered no later than 6 months after the completion of all construction work required under the contract.  A party seeking to advance or defend proceedings regarding this time period should lead evidence as to when work under the contract was completed. 

Where no such evidence is provided, the court may look to other factors, such as the date a contract was validly terminated.  A date that a contract was purportedly terminated, where the termination is ultimately found to be invalid, will not be accepted as the last possible date when construction work under a contract is completed.

Facts

Vantralia Pty Ltd (Vantralia) and Redline Water Infrastructure Pty Ltd (Redline) were parties to a contract to perform earthworks

Disputes arose between the parties regarding payment and performance issues.  Redline gave notices suspending the works on 29 July and 8 August 2022.  Redline issued a show cause notice on 30 July 2022 and Vantralia issued one on 4 August 2022.  Vantralia purported to terminate the contract on 18 August 2022 and Redline purported to terminate on 30 August 2022.  

Redline submitted its final payment claim on 28 February 2023, 6 months and 10 days from Vantralia’s purported termination, and just under 6 months from Redline’s purported termination. Each party contended that the termination by the other party was invalid.

An adjudication application was made in respect of the final payment claim and on 5 June 2023 the adjudicator determined that Vantralia was to pay Redline the adjudicated amount.

Vantralia challenged the decision for jurisdictional error because it alleged that Redline’s final payment claim was out of time as Vantralia had validly terminated the contract on 18 August 2022.

Decision

The court dismissed Vantralia’s application.

Was Redline’s final payment claim out of time?

The central issue was whether Redline’s final payment claim was given after the time period specified in s 75(3)(c) of the BIF Act, being ‘6 months after the completion of all construction work to be carried out under the construction contract‘.  In determining when the time period began, the court emphasised that parties should not equate the termination of a contract with the completion of all construction work.  In this case Vantralia and Redline did not put forward evidence or arguments about the timing of completion of the work as their focus was on the purported termination by either party.  The court’s primary focus was the issue of whether and when the contract was validly terminated.

The court agreed with the adjudicator’s finding that Vantralia did not have a contractual basis to terminate the contract on 18 August 2022.  First, Vantralia claimed that Redline had breached the contract by failing to proceed with the works with due expedition and without delay.  Vantralia argued that Redline was not able to complete the quantity of work remaining, which had been calculated based on the percentage of the contract price not yet claimed by Redline, by the date for practical completion.  The court rejected this claim, noting that there may be any number of reasons, both within the fault of the principal or the contractor or otherwise, as to why Redline was delayed or had only claimed a portion of the contract price.  This did not demonstrate that Redline was proceeding less than diligently.

The court also disagreed with Vantralia’s claim that Redline had breached the contract by wrongfully suspending the work and wrongfully repudiating the contract.  Redline was entitled to suspend the work due to Vantralia’s failure to pay the full amount claimed in Redline’s payment claim. The court concluded that there was no evidence of an inability or refusal by Redline to perform the contract.

Vantralia’s termination was found invalid and Redline’s final payment claim was given within 6 months after the completion of all construction work to be carried out under the contract.

Was Vantralia afforded procedural fairness?

The court also considered Vantralia’s claim that it had not been afforded procedural fairness with respect to the adjudicator’s consideration of issues regarding geotechnical testing, certification and surveys.  Vantralia relied on various provisions in the contract to imply that Redline was required to submit geotechnical testing and certification as a condition to payment, and that by failing to examine this, the adjudicator’s decision was misapprehended and therefore amounted to jurisdictional error.  This argument was rejected as the contract only required certification if specified by the superintendent, which in this case it was not.  A failure by Redline to comply with technical requirements may have, if proven by Vantralia, entitled Vantralia to bring proceedings against Redline, but did not of itself invalidate payment claims or require a determination by an adjudicator.

Vantralia also alleged that the adjudicator drew unfair inferences from the fact that no evidence was given from the superintendent regarding the requirement for geotechnical testing or certification and that no surveys were carried out at the relevant time.  The court considered that such claims were a challenge to the adjudicator’s reasoning process, and not a challenge on the basis of jurisdictional error.  There were no specific instances alleged where Vantralia was not afforded an opportunity to know and meet the case against it.