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$2.4m claim denied over ‘bit of wood’

A “big case about a small bit of wood” – involving a construction payment claim for $2.4 million – has been decided in the Brisbane Supreme Court.

Last month, electrical contractor Ingeteam successfully challenged a decision made by a Queensland Building and Construction Commission (QBCC) adjudicator that it had breached its licensing requirements by repairing a floor with a piece of plywood for $294, and therefore he could not decide a payment claim for $2,385,867.

In his 27-page decision, Justice Applegarth concluded that no reasonable decision-maker could have arrived at the decision on the basis of the evidence and submissions made to them.

Hervey Bay solar farm owner Susan River had engaged licensed electrical contractor Ingeteam in September 2020 to operate and maintain the farm. When the contract ended in June 2023, Ingeteam pursued claims for unpaid amounts under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act). The $2,385,867 was made up of unpaid monthly instalments and unpaid fees for additional services.

Susan River disputed the claim by providing a payment schedule to Ingeteam before lodging an adjudication application with the QBCC. In its submissions to the regulator, Susan River raised several jurisdictional points that had not been raised in its payment schedule, including an issue about licensing.

It submitted that Ingeteam had carried out “building work” as defined in the Queensland Building and Construction Commission Act 1991 (Qld) in its scheduled and unscheduled maintenance, which it claimed constituted “repair” of a building for the purpose of the Act.

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“The $294.24 claim was the cost of a handsaw, a piece of plywood, a roll of tape and a small amount of time that a licensed electrician took to tape the piece of plywood to the floor, above a spot that needed repair,” Justice Applegarth said

“The adjudicator concluded, without giving the claimant the chance to call evidence or make submissions on the point, that the claimant required a licence to do that work, and because it did not have the required licence, he did not have jurisdiction.

“In deciding that the claimant did building work that required a licence and that it could not enforce the multi-million-dollar Operating and Maintenance Contract, the adjudicator denied the claimant procedural fairness.”

Laying a floating floor is exempt from licensing requirements of the QBCC Act.

“Simply put, if the adjudicator, in the interests of expedition or for some other reason, did not wish to give Ingeteam an opportunity to give evidence and make submissions about a new matter upon which the adjudicator intended to base his conclusion about jurisdiction, the adjudicator should not have relied upon the parts of Susan River’s reply submissions that made new allegations of fact about unlicensed building work,” Justice Applegarth said.

“Having not had the benefit of any submissions from Ingeteam about the floor repair or why exemptions from licensing applied to it, the adjudicator found that it amounted to ‘building work’ for the purpose of the QBCC Act.

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“Just as carpet layers and installers of vinyl do not undertake ‘building work’, someone who lays a floating floor does not undertake ‘building work’. Having regard to the statutory context, the laying or removal of a floor that is not fixed to the subfloor is unlikely to require carpentry or other trade skills.

“The adjudicator therefore erred in concluding that Ingeteam was carrying out ‘building work’ and needed a licence to do so. He erred in concluding that the carrying out of unlicensed building work meant that he did not have jurisdiction to decide the payment claim.

“Such a serious finding which had the effect of rendering the contract unenforceable, and to deprive Ingeteam of any right to payment under the BIF Act, should not have been made. It should not have been made because it was not contended for by Susan River. It should not have been made because no evidence supported the finding.

“The finding that Ingeteam breached the formation limb of s 42 was unreasonable in the legal sense. It was irrational in the sense that it was not supported by any reasoning. It lacked logic. It was not based on findings of fact or inferences from facts supported by logical grounds.”

Justice Applegarth declared the adjudication decision void in part for jurisdictional error, and that Ingeteam and Susan River were not bound by the licensing findings. He also ordered Susan River pay Ingeteam’s costs.

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