The QLD Supreme Court in Downer EDI Rail Pty Ltd v DT Infrastructure Pty Ltd recently clarified the proper interpretation of s97(1)(b) of the BIF Act in terms of a deemed withdrawal of an Adjudication Application by early payment by the respondent.
The Court held that the section provides that, if the respondent pays the amount sought by the adjudication application (rather than the amount claimed in the payment claim), the application is deemed withdrawn.
The claimant (DTI) served a payment claim at approx. $22 million (ex GST). The respondent issued a payment schedule assessed the claim at approximately $13.5 million, leaving the amount in dispute at approx. $8.7 million.
The claimant applied for adjudication, but only in respect of only two variation claims, totalling $681,445.37 and not for assessment of the total of the disputed amount.
Before the adjudicator issued a decision, the respondent paid the full value of the variation claims in the sum of $681,445.37 (plus interest) and applied to the Court for a declaration that, the adjudication application was deemed withdrawn by s97(1)(b).
The Court held that the words “the subject of the adjudication application” in the section limit its operation to the amount in issue before the adjudicator, not the total amount claimed in the payment claim. Accordingly, the Court held the adjudication application was withdrawn with the respondent’s payment.
Where there is no genuine dispute in respect of amount sought at adjudication, early payment will bring the matter to an end and limit costs exposure in connection with the adjudication process, including arguments as to who should pay.
Respondents are also well advised to remind claimants (after such payment is made) of their obligation under s97 of the Act to promptly confirm the withdrawal to the adjudicator, otherwise the claimant will be held liable for the Adjudicator's costs.
The QLD Supreme Court in Downer EDI Rail Pty Ltd v DT Infrastructure Pty Ltd recently clarified the proper interpretation of s97(1)(b) of the BIF Act in terms of a deemed withdrawal of an Adjudication Application by early payment by the respondent.
The Court held that the section provides that, if the respondent pays the amount sought by the adjudication application (rather than the amount claimed in the payment claim), the application is deemed withdrawn.
The claimant (DTI) served a payment claim at approx. $22 million (ex GST). The respondent issued a payment schedule assessed the claim at approximately $13.5 million, leaving the amount in dispute at approx. $8.7 million.
The claimant applied for adjudication, but only in respect of only two variation claims, totalling $681,445.37 and not for assessment of the total of the disputed amount.
Before the adjudicator issued a decision, the respondent paid the full value of the variation claims in the sum of $681,445.37 (plus interest) and applied to the Court for a declaration that, the adjudication application was deemed withdrawn by s97(1)(b).
The Court held that the words “the subject of the adjudication application” in the section limit its operation to the amount in issue before the adjudicator, not the total amount claimed in the payment claim. Accordingly, the Court held the adjudication application was withdrawn with the respondent’s payment.
Where there is no genuine dispute in respect of amount sought at adjudication, early payment will bring the matter to an end and limit costs exposure in connection with the adjudication process, including arguments as to who should pay.
Respondents are also well advised to remind claimants (after such payment is made) of their obligation under s97 of the Act to promptly confirm the withdrawal to the adjudicator, otherwise the claimant will be held liable for the Adjudicator's costs.
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