Azure Project 19 Pty Ltd v 5 Point Projects Pty Ltd [2026] QSC 96

Andrew Orford | Laura Berry | Lois Min

Key takeouts

An adjudicator must base their decision solely on the matters set out in section 88(2) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (Act), being the provisions of the Act, the relevant construction contract, the payment claim, the payment schedule, the parties’ submissions and the outcome of any inspection undertaken by the adjudicator.

Where an adjudicator makes a decision that cannot be supported by reference to one of the matters listed in section 88(2), the adjudicator commits jurisdictional error.

In considering the parties’ submissions, an adjudicator must genuinely consider them but is not required to determine every issue raised or to investigate beyond what the parties have presented.

Where jurisdictional error is established, it will not necessarily void the entire adjudication decision.  The court may sever the affected portion of the decision and adjust the adjudicated amount accordingly.

Background

In October 2022, Azure Project 19 (Azure) and 5 Point Projects (5 Point) entered into a design and construct contract for the development of a luxury residential project (contract). The contract provided for liquidated damages at $10,000 per day from the date for practical completion until the earlier of the date of practical completion or termination.

In June 2025, 5 Point served a payment claim of approximately $4 million. On 16 July 2025, the superintendent certified that $1,130,000 in liquidated damages was payable by 5 Point to Azure. Azure then issued a payment schedule certifying only $48,517 as the amount due and payable to 5 Point, deducting liquidated damages and other amounts.

The adjudication

In August 2025, 5 Point applied for adjudication and submitted that Azure was entitled to no more than $110,000 in liquidated damages. The dispute centred on the contractual date for practical completion and the actual date of practical completion.

In February 2026, the adjudicator determined that $1,731,973 was payable to 5 Point. The adjudicator made no finding on the date for practical completion and treated the date of practical completion as ‘immaterial’, reasoning that both parties’ proposed dates after the ‘reference date’, despite that conclusion not being supported by the contract or the parties’ submissions. To value liquidated damages, the adjudicator applied what he understood to be 5 Point’s concession of $110,000 in liquidated damages.

The alleged jurisdictional errors

Azure applied to the Supreme Court seeking to have the adjudication declared void for jurisdictional error on four grounds, being that the adjudicator:  

1. failed to consider the parties’ submissions on the date for practical completion and the date of practical completion (First Ground);
2. failed to consider the contractual terms relating to liquidated damages (Second Ground);
3. failed to give adequate reasons on the liquidated damages issue (Third Ground); and
4. failed to calculate liquidated damages in accordance with the contract (Fourth Ground).

Decision

The Court determined that jurisdictional error was established on two of the four grounds advanced by Azure and held that the decision was partially void, reducing the adjudicated amount by $130,000.

First Ground

Azure argued that the adjudicator failed to consider the parties’ submissions on practical completion and failed to carry out his statutory task under section 88(2) of the Act. The court rejected this argument.

Kelly J held that the adjudicator’s reasons revealed an awareness of the parties’ submissions, an attempt to distil them, and an express statement that he had considered them. The statutory task was to ‘consider’ the submissions, not to make findings on every matter raised. There was no statutory obligation on the adjudicator to determine the dates for and of practical completion. The adjudicator’s obligation was only to consider the submissions bearing on those questions.

Second Ground

Azure submitted that the adjudicator failed to consider the contract in relation to liquidated damages.

Kelly J found that the adjudicator’s reasoning revealed he had formed the view that the date of practical completion was ‘immaterial’ to his considerations because each party argued that practical completion occurred after the ‘reference date’.  His Honour held that the part of the adjudication that relied upon the ‘reference date’ as a basis for classifying the date of practical completion as immaterial involved an error, as the adjudicator failed to consider the provisions of the contract. In effect, the adjudicator did not apply the contract and instead determined the claim on a basis that had no foundation in either the contract or the parties’ submissions. Having reached that conclusion, the adjudicator valued the liquidated damages claim by reference to 5 Point’s concession that $110,000 in liquidated damages was payable.

Kelly J found that had the adjudicator properly considered the contract and the parties’ extensive submissions on the application of liquidated damages, he may have determined a different date of practical completion, which in turn would have altered the liquidated damages calculation. The failure to consider the contract and the parties’ submissions in this regard constituted jurisdictional error.

Third Ground

Azure argued that the adjudicator failed to give adequate reasons on the question of liquidated damages.

Kelly J found that the adjudicator’s reasons revealed no intellectual justification or logical basis for treating the date of practical completion as ‘immaterial’. The deficiency in reasoning demonstrated that the adjudicator had not discharged his statutory task under section 88 of the Act. Rather than applying the contract, the adjudicator decided the claim on another basis, attributing unexplained significance to the reference date. His Honour determined that the error identified by the third ground was material and that jurisdictional error was established.

Fourth Ground

Azure submitted that the adjudicator failed to calculate liquidated damages in accordance with the contract. The court rejected this argument.

Kelly J found that the adjudicator was confronted with two competing dates of practical completion: 25 February 2025 (Azure) and 16 June 2025 (5 Point). Having considered the material, the adjudicator was not satisfied that either date had been established. His Honour held that this determination was within the adjudicator’s power and that the adjudicator was not obliged to search for a different date. The dispute referred to adjudication was limited to the issues the parties presented, and the adjudicator was not required to address the true merits of the claim beyond those issues.

Severance

Rather than setting aside the entire adjudication, Kelly J exercised the power under section 101(4) of the Act to sever the part of the decision affected by error. His Honour identified the ambit of the liquidated damages dispute as falling between $110,000 (as assessed by the adjudicator) and $240,000 (calculated from the conceded date for practical completion to termination). The adjudicated amount was accordingly reduced by $130,000. His Honour held that an order reducing the adjudicated amount by the full $1.13 million sought by Azure would have been ‘relevantly unfair’, given the adjudicator’s unchallenged finding that Azure’s asserted date for practical completion was not established..