Regional Council in the Supreme Court

Jonathan Miliszewski January 16, 2019
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The Case – Livingstone Shire Council v EarthTec Pty Ltd and Ors [2018] QSC 271.

The Supreme Court found in favour of Livingstone Shire Council (Council) in the decision of Livingstone Shire Council v EarthTec Pty Ltd and Ors [2018] QSC 271.

Livingstone concerned an application from Council to set aside an adjudicator’s decision made under the now repealed, Building and Construction Industry Payments Act 2004 (Qld) (BCIPA). In the adjudication decision, Council was found liable to pay EarthTec Pty Ltd (EarthTec) the amount of $1,364,696.80.

Council applied to the Supreme Court to have the adjudication decision set aside as being void for jurisdictional error and also because the adjudicator denied Council natural justice in failing to consider its properly made submissions.

Facts of Adjudication Decision

While the law is particularly interesting to lawyers, it is the facts and the difficult position Livingstone found itself in that is most useful to regional local governments to consider.  Janelle Kerrisk | Helix Legal.

EarthTec sought payment of $2,714,649.11 in relation to construction works it performed on a section of the Scenic Highway at Statue Bay (between Yeppoon and Roslyn Bay).  Almost $2M of the claimed amount was for provisional quantities and variations with approximately $722,000 being for revetment wall and road remediation works performed by EarthTec.  Council scheduled nil payment.

Prior to the adjudication, Council had already paid $1,153,224.62 into Court as a result of a number of claims of charge given by EarthTec’s subcontractors under the, now repealed, Subcontractors’ Charges Act 1974 (Qld) (SCA).  

Council contended that the adjudicator ought to take into account the amounts paid into Court under the SCA otherwise it would be required to pay for the same work twice.   

The adjudicator decided that it had no jurisdiction to consider the relevant provisions of the SCA and decided that an amount of $1,364,696.80 was payable by Council.

If your council was in this position you would have to find an additional $1.3M dollars after having just paid $1.1M into Court for unpaid subcontractors on the same project. Gerard Meade | Helix Legal

Queensland Supreme Court Decision

In finding for Council, Lyons SJA held that the adjudicator ought to have considered the interplay of the SCA and the BCIPA as it was a submission properly made by Council.

Further, the Court said that the adjudicator had failed to accord Council natural justice, as despite requesting further submissions on four separate occasions the adjudicator at no stage indicated to the parties that there was a jurisdictional hurdle for the Council to overcome.

The takeaway

It is true that there are limited grounds available to council and other applicants seeking to have an adjudication decision set aside at Court.  If the adjudication decision is seemingly inconsistent or illogical but was made within the jurisdiction provided to the adjudicator at law then it is unlikely to be set aside.  Livingstone is an example of circumstances where the adjudicator did fall into jurisdictional error.  

The BCIPA and the SCA have now been repealed and replaced by the Building Construction Industry Fairness (Security of Payments) Act 2017 (Qld) (BIFA), but the issues considered in Livingstone remain.  Livingstone is a reminder that even if you manage to correctly navigate the regulatory regime, as Livingstone Shire Council did, you may still end up on the wrong end of an adjudication decision.  At least in this case, the Supreme Court was able to rectify the wrong.

At Helix, we act for over a third of Queensland’s local governments, because we like what you do and the way you go about it.  If you’d like further information on the impact of construction industry legislation on local government construction projects, subscribe to our newsletters or contact us at your convenience for a chat.

Not intended as legal advice. Read full disclaimer.
Jonathan Miliszewski January 16, 2019

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