Queensland Adjudication: They Shoot Horses, Don’t They?

The 1969 psychological film drama ‘They Shoot Horses, Don’t They?’ features the abject misery of desperate dance contestants to win $1,500 during the Great Depression. The title refers to mercy killing of injured horses and the film draws the parallel between the horse and the treatment of the contestants.

The Building Industry Fairness (Security of Payment) Act 2017 and its appalling treatment of Queensland building industry participants can be viewed as the horse. Surely the time has come to ditch this Act and join all other States in applying security of payment laws consistent with the Murray Review recommendations to the Commonwealth for harmonized Security of Payment (SoP) legislation.

This 195-page Act of legalise is incomprehensible to a layman and fertile ground for legal argument at the cost of Queensland industry parties. In contrast, the equivalent SoP Act in NSW is 32 pages and, by amendments effective from October 2019 and 1 March 2021, further simplified. Other States, including Western Australia and South Australia, are legislating improvements to their SoP Acts consistent with the Murray Review recommendations.

Previously, I have highlighted the disaster imposed on Queensland industry participants by what Government persists in calling the ‘Fairness’ Act. Refer The Death Knell Bell Does Toll for Queensland Adjudication. That article draws attention to statistics published by the Queensland Building and Construction Commission (QBCC) in the 2018-19 Annual Report and was written from the perspective that the treatment of Queensland industry participants by the ‘Fairness’ Act was so bad, it could not be worse.

The article highlighted an increase in the fall over rate in adjudication applications of 23% in 2009/2010 from a base of 999 adjudication applications to 169% in 2018/19. Further the article complains that QBCC had stopped publishing the monthly statistics from which such analysis could be readily made. Now information must come from studying every published adjudication decision and brief information in the QBCC Annual Report. That report is now the only source for adjudication application numbers. Withholding monthly statistical information, previously continuously available from 2004, is hardly consistent with the QBCC stated vision to ‘to be a regulator that builds trust and confidence in all we do’.

The QBCC Annual Report for 2019-20 is now available.

Was I correct in my previous article to assume the adjudication numbers could not decline further? Unfortunately, I was not. The 2019/20 annual report reveals a continuing decline in every applicable statistic: numbers of adjudication applications; decisions issued; and decisions on the disputed payment issues between the parties.

Financial Year Applications Decisions No Jurisdiction Decisions on Disputed Payment Issues
2018/2019 572 300 77 223
2019/2020 421 270 79 198

The 2019/2020 figures include 3 months of Covid-19 induced non-payments. One would have expected an increase in adjudication applications, not a reduction approaching 27%. In NSW, Adjudicate Today recorded an increase of 9% in numbers of adjudication applications received over the same period.

In Queensland, industry participants are voting with their feet against the Act. In NSW, the number of adjudication applications and support for the SoP Act grows each year.

Another concern. There are 145 registered QBCC adjudicators making 270 decisions, an average of less than 2 matters per adjudicator per annum. Without continuing quality work, the adjudicator’s skill set must decline. By contrast, Adjudicate Today adjudicators on the NSW panel averaged 17.32 matters per adjudicator last financial year.