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BIFA Refresher Part 7 – After The Adjudication Decision

Welcome to our seventh and final article in this series.  The adjudicator has made its decision under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA), the adjudicator’s fees have been paid and that decision has been released to the parties, what happens now?

If the adjudicator found in favour of the respondent, including if it found it did not have jurisdiction to determine the adjudication, usually nothing else happens in relation to the adjudication process.  This is because, in practice, it is usually the claimant who pays the adjudication fees in the first instance and the adjudicator will usually make the claimant responsible for 100% its fees in these circumstances.

However, adjudicators often determine that the respondent must pay the claimant some amount of money, plus the relevant amount of interest and often at least a portion of its fees, usually expressed as a percentage.

If the respondent is liable to pay an adjudicated amount to the claimant, that payment must occur within five business days of the respondent being served with the adjudication decision unless the decision specifies some other period or date for payment.

What happens if the respondent does pay?

The Queensland Building and Construction Commission (QBCC) Registrar is required to provide an adjudication certificate to the claimant as soon as practicable, and no later than 5 business days, after it receives a copy of the decision from the adjudicator.

If the respondent has not paid the adjudicated amount and other relevant fees owing to the claimant by the due date, the claimant may file that adjudication certificate as a judgment debt in court of competent jurisdiction.

Where to file and enforce the adjudication certificate is dependent on the size of the debt owing (the total of the adjudicated amount, the interest outstanding at the time the adjudication certificate was issued and the proportion of the adjudicator’s fees and adjudication fee). The jurisdiction of the courts are:

  1. Claims of up to $150,000 – Magistrates Court;
  2. Claims from $150,000 to $750,000 – District Court; and
  3. Claims over $750,000 – Supreme Court.

The adjudication certificate must be accompanied by an affidavit of the claimant stating that the whole or a part of the adjudicated amount has not been paid to the claimant at the time the certificate is filed and a filing fee will be applicable when lodging the adjudication certificate with the relevant court.

Once an adjudication certificate is registered as a judgment, the claimant can enforce the enforcement processes outlined in the Uniform Civil Procedure Rules 1999 (Qld) as a judgment creditor.  The possible means of enforcing the judgment debt include enforcement warrants for seizure and sale of assets of the respondent., redirection of the respondent’s debts or earnings or an instalment payment plan.

Section 93(4) of the BIFA imposes limits on the steps a respondent can take to set aside the judgment, including that it is not entitled to bring any counterclaim; raise any defence; or challenge the decision; and that it is required to pay into the court, as security, the unpaid portion of the adjudicated amount pending the final decision in those proceedings.

Where the work under the construction contract is ongoing, if the respondent fails to pay the adjudicated amount, the claimant may give the respondent written notice of the claimant’s intention to suspend carrying out construction work or supplying related goods and services.

In addition, if the respondent fails to pay by the due date, it may incur of penalties and disciplinary action by the QBCC. The claimant will also be able to enforce the decision as a judgment debt.

Disputing an adjudication decision

Whilst a respondent may seek to judicially review the adjudicator’s decision, by way of an originating application to the Supreme Court of Queensland, the grounds available to do so are very limited, generally being restricted to jurisdictional error or procedural fairness.

Jurisdictional error occurs where the adjudicator does something they are not empowered to do, or where they fail to do something, they are required to do in accordance with its requirements under the BIFA. Therefore, the adjudicator may make not make a decision unless there a construction contract covered by BIFA; an available ‘reference date’; a valid payment claim; and a valid adjudication application and if it does make a decision where one or more of those does not exist, there has been a jurisdictional error.

Essentially this means that, even if the adjudicator made a clear mistake, including error of fact or law, as long as the decision was within the scope of the adjudicator’s power, the courts are unlikely to disturb the decision.

Interim only

One final thing that it is important for parties to remember is that any adjudication decision is an interim decision only, which has been described as a ”pay now, fight later” scheme.  This means that the parties can dispute the same issues in subsequent court proceedings or dispute resolution processes under the construction contract.

If you have any concerns about your obligations in relation to BIFA, or your options for recovering payment under BIFA, feel free to contact us to get in touch.

Disclaimer
The content of this blog article is intended to provide general information as a summary of the subject matter, which is current at the time of publication. It is intended for information purposes only and should not be regarded as advice. Specialist advice should be obtained about your specific circumstances before taking action on any issue dealt with in this publication.