Galaxy Developments Pty Ltd | Time is of the Essence
The recent case of Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors  QCA 10, demonstrates why, under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (‘BIF Act’), adjudicators must make their determinations within the legislative timeframe. The Court also reiterated the importance for businesses and contractors to ensure they are licensed to complete contracted works under the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) and the Queensland Building and Construction Commission Act 2018 (Qld) (‘QBCC Regulation’).
In summary, Galaxy Developments Pty Ltd (‘Galaxy Developments’) and Civil Contractors (Aust) Pty Ltd (‘Civil Contractors’) entered a contract for earthworks valued at approximately $1.3 million; however, the relevant earthworks in dispute only related to a small portion of the works valued at $37,000 (‘Works’). The Works consisted of the relocation of a bike rack and seat on a footpath.
Before trial, a QBCC adjudicator held that Civil Contractors should recover an adjudicated amount of $1.4 million from Galaxy Developments. Galaxy Developments then brought an application to the Supreme Court of Queensland alleging that the adjudicator’s decision was void because it wasn’t delivered within the relevant legislative timeframe. If successful, Civil Contractors would lose a successful adjudication at no fault of their own.
THE PRIMARY CASE
The Court agreed with Galaxy Developments and declared the adjudicator’s determination was void because:
1. the adjudicator failed to decide the adjudication within the legislative timeframe; and
2. Civil Contractors did not hold the required QBCC licence to carry out the Works under the contract, which meant that they were not entitled to any payment under the BIF Act.
Civil Contractor’s appealed the decision.
THE CASE ON APPEAL
On appeal, the Court confirmed that:
1. the adjudicator’s decision was void because the decision was not made within the legislative time frame under the BIF Act;
2. an adjudicator’s jurisdiction is defined by the relevant time limit under the BIF Act; and
3. an adjudicator’s powers cease upon the expiry of the timeframes under the BIF Act.
The Court otherwise determined that Civil Contractors were licenced because the Works were excluded from the definition of building work under Schedule 1 of the QBCC Regulation. Civil Contractor’s therefore were not required to hold a QBCC building licence to complete the Works.
The Court’s decision demonstrates the potential ambiguity under the BIF Act, making it abundantly clear that businesses and contractors should obtain professional legal advice when contracting for building and construction work, or when commencing or defending legal proceedings.
KEY TAKEAWAYS FOR BUSINESSES, CONTRACTORS AND ADJUDICATOR’S
The importance of licensed building work
Businesses and contractors must not carry out building work unless they hold the appropriate QBCC licence. The QBCC Act and the QBCC Regulations set out the categories of trade contractor licences which contractors must hold prior to commencing works. Schedule 1 of the QBCC Regulations provide for a limited number of work categories that are not considered building work under the QBCC Act, and therefore do not require a licence.
As shown in the above case, the Court found that Civil Contractors were unlicenced to complete the Works, but on appeal, the Court found that the Works were excluded under Schedule 1 of the QBCC Regulation. With different interpretations of building work available, businesses and contractors should do their due diligence and obtain professional legal advice to ensure they are meeting the required standards under both the QBCC Act and the QBCC Regulations. Failure to meet the required standards may result in fines, legal proceedings, or even the termination of your building licence, rendering you legally incapable of performing works in your desired area of construction.
Notes for adjudicators
Adjudicators should note that their failure to comply within the required legislative time frame will result in:
1. the decision being void; and
2. no entitlement for payment of fees concerning the matter.
Ultimately, an adjudicator’s jurisdiction is strictly defined by the relevant time limit under the BIF Act and a favourable outcome can be taken from a winning party at no fault of their own.
OUR ROLE IN LITIGATION
If you are looking to seek legal advice, Ramsden Lawyers are able to assist you. We are happy to arrange an initial consultation to assist you in navigating the procedures set out under the relevant legislation for your circumstances.
The content of this article is intended to provide a general guide to the subject matter and must not be relied on as legal advice. Specific advice should be sought about your circumstances.
For further all things litigation at Ramsden Lawyers please follow this link.