Case note: Procon Developments (Australia) Pty Ltd v Hi-Cal Bricklaying [2025] QSC 67

Procon was the respondent to an adjudication application in which an adjudicator decided Procon was liable to pay the claimant, Hi-Cal, a progress payment in the amount of $13,699.25.[1] In arriving at his decision on jurisdiction, the adjudicator considered whether the payment claim before him was valid (as he was required to do), including by reference to whether there was an available reference date for it. But his finding on the existence and availability of a relevant reference date was both wrong and contrary to what the parties had submitted, and he did not give the parties an opportunity to be heard in relation to his proposed finding before he made it.

Procon applied to the Supreme Court to set aside the decision on the basis that: (a) the adjudicator was wrong and (b) failed to observe the principles of natural justice, in arriving at his finding that there was an available reference date.

Was the adjudicator wrong in finding there was an available reference date?

A reference date is: (a) a date stated in, or worked out under, a contract as the date on which a claim for a progress payment may be made for construction work carried out, or related goods and services supplied, under the contract; or (b) if the contract does not provide for the matter: (i) the last day of the month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract; and (ii) the last day of each later month. However, if a construction contract is terminated and the contract does not provide for, or purports to prevent, a reference date surviving beyond termination, the final reference date for the contract is the date the contract is terminated.”[2]

It was common ground that the relevant contract had in any case been terminated by 2 July 2024, the contract did not provide for a reference date surviving beyond termination and that the adjudicated payment claim was dated 14 August 2024. It follows that the only available reference dates must have been dated 2 July 2024 or earlier.

Hi-Cal had sent to Procon an invoice numbered 1150 on 28 June 2024 and then resent it on 30 July 2024, under cover of a new letter requesting payment. Procon contended that this resending constituted a new payment claim, the effect of which would have been that, if the final reference date for the contract was 2 July 2024, it was not available for the adjudicated payment claim dated 14 August 2024. The Court rejected this argument. It held that, on its face, invoice 1150 was a payment claim, and no resending or re-attaching of it was capable of converting it to a new, separate, payment claim.[3]

But the parties did not agree on the date of termination of the contract. It was Hi-Cal who alleged the date of termination was 2 July 2024. Procon alleged that termination occurred on 11 June 2024. If Procon was right about this date, then the final reference date was used up by Hi-Cal’s sending of invoice 1150 (mentioned above) on 28 June 2024.

Suffice to say that the Court did not consider, on the balance of probabilities, that the date of termination was as alleged by Procon.

In the result, the Court held that the final reference date was 2 July 2024, and that it was available to the adjudicated payment claim. Therefore, the adjudicator was not wrong in finding that there was an available reference date. He was, however, wrong in the date he decided was the reference date. 

Did the adjudicator fail to observe the principles of natural justice in finding there was an available reference date?

Hi-Cal specified in its adjudication application that 11 June 2024 was the relevant and available reference date but, in any case, this date had been used up by invoice 1150 issued on 28 June 2024 and the adjudicator identified this as an error. However, without hearing from the parties, he then decided that there was an available reference date on 31 July 2024.

This was wrong because, in any case, the parties were asserting that the contract had been terminated by 2 July 2024, the effect of which is that the final reference date had to be either this date or earlier.

But this conclusion was not the end of the matter. A denial of procedural fairness must be material, in that there must be a realistic possibility that the decision under review could have been different if procedural fairness had been observed, before the decision could be set aside.[4] In this case, the Court found it realistically possible that submissions could have been made, if an opportunity had been given to do so, which might well have persuaded the adjudicator to change his mind. Accordingly, the decision was invalid and the Court set it aside.

Footnotes

[1] Procon Developments (Australia) Pty Ltd v Hi-Cal Bricklaying [2025] QSC 67 (“Procon”), [5].

[2] BIF Act s 67.

[3] Procon, [29].

[4] See Ingeteam Australia Pty Ltd v Susan River Solar Pty Ltd [2024] QSC 30 at [76]-[80] and the authorities there referred to.