Re-Running a Security of Payment Adjudication Can Cost You Everything

Published by Odyssey Legal | Business, Construction & Litigation Lawyers

A recent NSW Court of Appeal decision has confirmed a principle that every Queensland builder and contractor needs to understand: if you lose a security of payment adjudication on jurisdiction grounds, you cannot simply withdraw and try again with a different adjudicator. In Kwik Flo Pty Ltd v SE Ware Street Dev Pty Ltd [2026] NSWCA 9, the Court ruled the second adjudication was an abuse of process and set aside a $1.2 million determination in its entirety. The lesson for Queensland builders under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) is clear: get your adjudication strategy right from the start.

What Happened: The Kwik Flo and SE Ware Dispute

Kwik Flo Pty Ltd and SE Ware Street Dev Pty Ltd entered into a joint development agreement in 2022. The arrangement involved construction work, and a dispute arose over payment. Kwik Flo lodged a security of payment adjudication application claiming approximately $3 million, which included construction work and lost profits.

The first adjudicator considered the payment structure under the NSW Building and Construction Industry Security of Payment Act 1999 (SOPA) and ruled that he had no jurisdiction to hear the claim. His reason was straightforward: the way payment was calculated in the agreement fell within a specific exception under section 7(2)(c) of the SOPA, meaning the Act did not apply to that claim.

At that point, Kwik Flo faced a choice. The right course was to seek judicial review if they genuinely believed the adjudicator was wrong. Instead, they took a different path.

The First Adjudication: Why the Adjudicator Had No Jurisdiction

Under both the SOPA and BIFA, the legislation does not apply to every construction payment dispute. Section 7(2)(c) of the SOPA excludes payment obligations calculated on something other than the value of construction work performed. In plain terms: if the payment under a contract is calculated differently to what the legislation contemplates, the security of payment adjudication process may not be available.

This type of ruling - where the adjudicator finds they have no power to hear the claim - is still a valid determination under the legislation. The adjudicator is not simply declining to act. They are making a binding finding on jurisdiction. That distinction became critical in this case.

The Fatal Mistake: Attempting to Re-Run the Adjudication

After the first determination, Kwik Flo purported to "withdraw" the original application. They then lodged a new adjudication application with a different nomination body, filing supplementary evidence in support of their claim. A second adjudicator was appointed, and that adjudicator awarded Kwik Flo $1.2 million.

SE Ware challenged the second determination. Their argument was straightforward: the second application was simply a re-agitation of the same jurisdictional issue that had already been decided. The filing of new evidence and the change of nomination body did not transform it into a genuinely new application.

This approach is sometimes called forum shopping: looking for a more favourable decision-maker after losing the first time. The Court of Appeal rejected it entirely.

The Court of Appeal's Ruling: Abuse of Process

The NSW Court of Appeal held that the second adjudication was an abuse of process and set aside the $1.2 million determination in full. The Court confirmed several important principles:

• A jurisdiction ruling is still a determination. When an adjudicator rules on whether they have jurisdiction - even if that ruling is "I have no jurisdiction" - it is a binding determination under the legislation. You cannot simply ignore it and start again.
• You cannot re-agitate the same issue. Lodging a new application that raises the same jurisdictional question already decided by the first adjudicator is an abuse of the security of payment process.
• Supplementary evidence does not create a new application. Filing additional or different evidence in support of the same claim does not transform it into a genuinely fresh application if the underlying issue is unchanged.
• The remedy is judicial review, not re-lodgment. If a claimant believes an adjudicator has made an error on jurisdiction, the correct course is to seek timely judicial review in the courts. It is not to try a second adjudicator.

What This Means for Queensland Builders Under BIFA

While this case was decided in New South Wales under the SOPA, the same principle applies in Queensland under BIFA. The policy rationale behind security of payment legislation in all Australian states is consistent: these Acts exist to provide a fast, interim resolution of payment disputes. They are designed to keep money flowing on construction projects, not to create an indefinite series of adjudication attempts.

Queensland's BIFA operates on the same foundational principle that you should not be able to re-run the same dispute to obtain a different outcome. The Queensland courts have consistently interpreted BIFA in line with the underlying policy of the legislation, and the NSW Court of Appeal's reasoning in Kwik Flo is directly relevant to how Queensland courts would approach a similar situation.

For Queensland builders and contractors, the consequences of attempting a second adjudication on the same issue could include having the entire claim set aside, as happened to Kwik Flo. You may also face adverse costs orders and lose valuable time that could have been spent pursuing the correct remedy. Additionally, your original claim may become time-barred while you pursue a flawed security of payment adjudication strategy.

What You Should Do Instead: Proper Remedies When Things Go Wrong

If an adjudicator rules against you - whether on jurisdiction or on the merits of your claim - your options depend on the nature of the error alleged and the stage of the dispute. The key is acting quickly.

Seek judicial review promptly. If you believe the adjudicator made a jurisdictional error, you can apply to the Supreme Court of Queensland for judicial review. There are strict time limits, and delay can cost you the right to challenge entirely.

Obtain expert legal advice before doing anything. Before withdrawing an application, lodging a second one, or taking any other step, get proper legal advice. What seems like a sensible workaround can constitute an abuse of process and wipe out your entire claim.

Review your contract before lodging. The Kwik Flo dispute arose in part because of how payment was structured in the joint development agreement. Understanding whether your contract falls within the scope of BIFA before you lodge an adjudication application is critical. An experienced Queensland construction law solicitor can identify these issues before they become expensive mistakes.

Consider alternative pathways. If a security of payment adjudication is not available for your type of claim, there may be other avenues: a commercial dispute, a QBCC complaint, or civil proceedings. These should be considered from the outset, not as a fallback after a failed adjudication.

Get Expert Adjudication Strategy Advice

Security of payment disputes under BIFA move quickly, and the consequences of a misstep can be severe. Odyssey Legal acts for Queensland builders and contractors in BIFA adjudications, payment disputes, and construction law matters across the Sunshine Coast, Brisbane, and throughout Queensland.

If you are facing a payment dispute or have received a determination you want to challenge, contact our team before taking any steps that could compromise your position.

Contact Odyssey Legal

Frequently Asked Questions

Can I lodge another adjudication application if the first adjudicator said they had no jurisdiction?

Not if you are raising the same jurisdictional issue. The Kwik Flo case confirms that re-lodging an application to re-agitate a jurisdiction question already decided is an abuse of process. If you believe the first adjudicator was wrong, seek judicial review promptly rather than attempting a second application.

What is the difference between withdrawing an adjudication application and an abuse of process?

Withdrawing a genuine application before determination can be legitimate in some circumstances. However, purporting to withdraw an application after a determination has been made on jurisdiction - and then lodging a fresh application raising the same issue with a different nomination body - is not a true withdrawal. Courts will look at the substance of what is happening, not just the procedural steps taken.

Does the Kwik Flo decision apply in Queensland under BIFA?

Yes. While Kwik Flo was decided under the NSW Security of Payment Act, the policy principles are consistent with BIFA and with how Queensland courts approach security of payment disputes. The prohibition on re-agitating decided jurisdictional issues applies equally to BIFA adjudications in Queensland.

What should I do if I disagree with an adjudicator's decision under BIFA?

If the adjudicator made a jurisdictional error, you can seek judicial review in the Supreme Court of Queensland. There are strict time limits, so you must act quickly. You should obtain legal advice immediately after receiving a determination you intend to challenge. Do not attempt to re-lodge the application with a different body.

What happens if I file supplementary evidence and lodge a second application?

As Kwik Flo demonstrates, filing supplementary or different evidence does not transform a second application into a genuinely new one if the underlying jurisdictional issue is the same. The entire second determination was set aside. Filing additional evidence will not protect you from an abuse of process finding if the core issue was already decided.

How do I know if my contract falls within the scope of BIFA?

BIFA contains specific exclusions, including for certain payment arrangements that are calculated on something other than the value of construction work. A Queensland construction law solicitor can review your contract before you lodge an adjudication application to identify whether BIFA applies and whether any exclusions are likely to be raised by the respondent.

What are the consequences of a successful abuse of process challenge?

If a court finds that a second adjudication was an abuse of process, the entire determination is set aside - as happened to Kwik Flo's $1.2 million award. You may also face an adverse costs order and lose the time you spent pursuing the flawed strategy, during which other avenues may have become time-barred.

Is there a time limit for seeking judicial review of a BIFA adjudication?

Yes. Time limits for challenging adjudication determinations are strict and can be very short. Missing the window may permanently extinguish your right to challenge. If you are considering a challenge, contact a Queensland construction law solicitor as a matter of urgency.