Digital age pitfalls with BIF Act claims – Construction & Planning

Digital age pitfalls with BIF Act claims

The digital age has certainly enhanced our ability to convey
information, something that is very important in the building and
construction industry. However, technology can also create
pitfalls, particularly when it comes to claims under the Building
Industry Fairness (Security of Payment) Act 2017 (Qld), where
compliance with technicalities is critical. The case of Iris
Broadbeach Pty Ltd v Descon Group Australia Pty Ltd gives a recent
illustration.

Facts

Iris Broadbeach Pty Ltd v Descon Group Australia Pty
Ltd [2023] QSC 290 involved a contractor and principal
disputing the amount claimed by the contractor under a payment
claim.

The contractor sought to secure payment through a Building
Industry Fairness (Security of Payment) Act 2017 (Qld)
(BIF Act) adjudication application that was lodged
using an online form accessed from the QBCC website.

Shortly after the electronic submission of the application, the
contractor received an email from the QBCC. That email confirmed
the contractor’s submission of the adjudication application and
relevantly stated, ‘Please see attached PDF for a copy of your
form submission’. The document attached to QBCC’s email was
a four page document described in the case as the ‘QBCC PDF
Form’.

The QBCC PDF Form contained parts, but not all, of the
electronic form that was completed by the contractor.

The contractor only served the QBCC PDF Form on the
principal.

The adjudication application was referred to an adjudicator, who
determined they had jurisdiction to determine the application. The
parties then participated in the adjudication process and the
adjudicator published a decision on 9 June 2023.

Court proceedings

On 16 June 2023, the principal commenced a Supreme Court of
Queensland proceeding seeking orders that the adjudication decision
was void because the adjudicator did not have jurisdiction.

The principal alleged that the adjudicator did not have
jurisdiction because the contractor, in making the adjudication
application, had failed to comply with certain procedural
requirements of the BIF Act, in particular that:

• the contractor had failed provide the principal with a copy of
  the adjudication application as required




• the payment claim was not a valid payment claim.

Issue 1 – failure to provide a copy of the
adjudication application

The BIF Act requires an adjudication application to be ‘in
the approved form’ and that a ‘copy of an adjudication
application must be given to the respondent’.

This issue, therefore, turned on a consideration of the approved
form for an adjudication application and whether the QBCC PDF Form
was a copy of the adjudication application.

The Court identified three possible forms:

• the manual form, which was available on the QBCC website to be
  downloaded, completed and submitted in person




• the electronic form, which was available on the QBCC website to
  be completed and lodged electronically




• the QBCC PDF Form, which was not available on the QBCC website,
  and was only provided to the contractor after it had lodged its
  adjudication application.

The manual form and electronic form were substantially the same
document. The contractor chose to use the electronic form in this
case.

Regarding this issue the Court decided that:

• the QBCC PDF Form was not the ‘approved form’




• a ‘copy’ of the adjudication application could only
  mean a full copy of the approved form of the adjudication
  application that was lodged with the QBCC




• the QBCC PDF Form was not a full copy of the approved form of
  the adjudication application that was lodged with the QBCC




• accordingly, the contractor – having only provided the
  principal with the QBCC PDF Form – had failed to comply with
  the requirement under the BIF Act to provide the principal with a
  copy of its adjudication application.

The adjudicator, therefore, had no jurisdiction to determine the
matter and their determination was void.

Issue 2 – was the payment claim a valid payment
claim?

For a payment claim to be valid it must be sufficiently
particularised such that the person receiving the payment claim can
understand the basis of the claim and the construction work to
which it relates. The recipient should not have to engage in a
process of reconstruction of other material in order to ascertain
the basis for the payment claim.

The principal argued that the payment claim was deficient
because (among other things):

• the actual work performed by the contractor was not
  described




• payment was sought as a percentage of the relevant category of
  work




• it was not possible for the principal to know, by inspecting
  the site, the work claimed to have been performed by certain
  consultants in that period




• the deficiencies in the payment claim could not be remedied by
  the subsequent provision of further information – the payment
  claim must be sufficiently detailed at the time it is given to the
  principal in order to be valid.

The Court, after considering the relevant authority, agreed with
the principal’s submission that any information provided by the
contractor after the payment claim was served was irrelevant to the
determination of whether payment claim was valid.

Further, the Court decided that the payment claim did not
sufficiently describe the actual work undertaken in order to be
valid. It required the principal to engage in a
‘significant degree of analysis … including piecing
together information from multiple sources‘.

Accordingly, the payment claim was invalid and the adjudicator
did not have jurisdiction to determine the matter.

The Court, therefore, ordered that the adjudication decision was
void and it was set aside.

Comments

This case is another example of a long line of authority that
stands for the principle that the procedural requirements of
security for payment legislation must be strictly complied with.
Courts recognise security for payment legislation provides special
statutory rights for those seeking payment for building and
construction work. To gain the benefit of those rights, parties
must strictly adhere to the prescribed procedures.

Electronic web forms may facilitate the easy submission of
material, but there may also be difficulties with compliance with
the requirements of the BIF Act if the applicant cannot retain (or
does not receive) an entire copy of that material for service. It
is therefore always important to check legislative requirements to
ensure any technology aligns with what is required. This is
particularly so for BIF Act matters where technicalities are
critical.

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