CONSTRUCTION Alert: Severing invalid amounts from payment claims and adjudications – decisions under Security of Payment legislation

8 August 2011

Publications

The Supreme Court of Queensland was recently asked to determine whether a part of an adjudication decision, made under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA), which was found to be invalid for jurisdictional error, could be severed from the rest of the decision.

The Court in James Trowse Constructions Pty Ltd v ASAP Plasterers Pty Ltd & Ors [2011] QSC 145 (Trowse) found that the common law doctrine of severance did not apply, and accordingly there was no mechanism available to sever that part of an adjudication decision infected by jurisdictional error from the remainder of the decision. As a result, the entire decision was set aside by the Court. This position is different to the position adopted in other states such as Victoria.

Accordingly, a party in Queensland issuing a payment claim should ensure that all parts of its claim are valid to prevent the ultimate adjudication determination being set aside, particularly where the vast bulk of the claim has succeeded. Further, adjudicators should be vigilant in critically reviewing payment claims and adjudication applications and excising out invalid parts, or suffer the consequence of their entire decisions being set aside.

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