Late last year the Queensland Supreme Court in the case of Karam Group Pty Ltd (Karam) v HCA Queensland Pty Ltd (HCA) & Ors considered an application by the principal, Karam, to set aside an Adjudication decision on the basis it was given out of time and sought a refund of approx. $1.8m paid by the principal to the builder, HCA, in respect of that decision.
At issue was the validity of the decision due to late notice given by the Adjudicator of the right to withhold the release of the decision (after the due date) pending payment of Adjudication fees.
The Court held that whilst Adjudicators have the right under s95(7)(d) of the BIF Act to withhold the release of a decision (after the due date) until their fees are paid, reading the Act as a whole, that right must be exercised and communicated by notice to the parties prior to expiry of the due date for the decision.
If that right is not exercised prior to expiry of the due date, the Adjudicator is required to give a copy of the decision to the QBCC registrar and the parties prior to expiry of the due date.
Because the Adjudicator in this instance failed to communicate the right to withhold the decision prior to expiry of the due date, instead did so the next day (and also failed to give a copy of the decision prior to expiry of the due date), the Court held the decision was void.
To rub salt into the wound of the builder, because the decision was declared void, the Court held the builder was obliged to repay in full the money paid by the principal in respect of the decision, plus interest.
The take home for contractors awaiting the outcome of an Adjudication decision (and not already on notice of the Adjudicator’s right to withhold a decision pending payment) is to get on the front foot and initiate contact with the Adjudicator (before the due date) to ensure the Adjudicator is aware of their obligations under the Act in the respect of the exercise of that right to withhold the release of a decision pending payment of their fees.
Clearly getting that wrong can mean a favourable Adjudication decision is rendered worthless.
If you require further information, contact Julian Troy at julian@troylegal.com.au
