• Jurisdictional Error in Adjudications: James Trowse v ASAP
  • November 22, 2011
  • Law Firm: Norton Rose Canada LLP - Montreal Office
  • Part of an adjudicator’s decision is infected by jurisdictional error: will the whole decision fall over?

    You have an adjudicator’s decision in your favour under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) however part of your claim or part of the adjudicator’s decision is invalid - what happens now? The answer, according a recent Queensland Supreme Court decision, is that the whole decision will fall over even if only one small discrete part of the claim or the adjudicator’s decision is invalid.

    What you need to know: the claimant’s perspective
    If you are a claimant seeking to make a claim under the BCIPA, check that everything you are claiming can be validly claimed under the BCIPA. Examples of what cannot be claimed include (among many others):

    1. claims which have been decided by an earlier adjudicator (whether awarded or not);
    2. claims which are not for construction work (or for related goods or services), such as the extraction, whether by underground or surface working, of minerals, including tunnelling or boring, or constructing underground works, for that purpose (expressly not construction work under the BCIPA); or
    3. future costs, i.e. costs for which you have neither incurred nor accrued a liability for (unless your contract provides you are entitled to claim such costs, which is rare).

    If you as a claimant include an amount which cannot be validly claimed in your payment claim and adjudication application and the adjudicator decides an amount in your favour based on an invalid part of the claim, then the whole adjudicator’s decision will be void. You then will need to start the whole BCIPA process again if you still wish to seek relief under the BCIPA.

    What you need to know: the respondent’s perspective
    If you are a respondent, the avenues available to you to seek a court order that a whole adjudicator’s decision is void, even if only part of it is invalid, have expanded.

    This principle will assist a respondent if an adjudicator’s decision is made awarding an amount to the claimant and the respondent can establish that part of the adjudicator’s decision is void. In that situation the whole adjudicator’s decision will be void.

    For example, the whole of an adjudicator’s decision for say $20 million, which includes a variation for future prolongation costs (not a valid claim) worth say $50,000, may be declared void.

    The case
    The principle that the whole of an adjudicator’s decision is void if part of that decision is void was determined by the recent Queensland Supreme Court decision of James Trowse Constructions Pty Ltd v ASAP Plasterers Pty Ltd & Ors [2011] QSC 145.

    ASAP Plasters made an adjudication application under the BCIPA including claims for a number of variations. The adjudicator decided amounts for ASAP Plasterers including for “Variation 24” which made up about 10% of the whole claim. The adjudicator decided “Variation 24” on a point with neither party had put forward in their submissions; therefore the adjudicator denied the parties natural justice because they did not have an opportunity to make arguments about the point which ultimately decided the claim for “Variation 24”. A claim for which an adjudicator fails to afford the parties natural justice is void. That was only the case for “Variation 24” not the other parts of the adjudicator’s decision. However because just one part of the adjudicator’s decision was void the whole adjudicator’s decision was void. One part of an adjudicator’s decision which is invalid cannot be severed from the main valid part of an adjudicator’s decision to save the rest of the adjudicated amount.