Background
This was a costs judgment following the primary decision in Azure Project 19 Pty Ltd v 5 Point Projects Pty Ltd [2026] QSC 96, delivered on 15 May 2026. The dispute arose from a building and construction adjudication under the Building Industry Fairness (Security of Payment) Act 2017 (Qld), in which an adjudicator determined that Azure Project 19 Pty Ltd (the Principal) owed 5 Point Projects Pty Ltd (the Contractor) $1,731,973.75, including $110,000 for liquidated damages on a project referred to as PV019.
The applicants challenged the adjudication decision in the Supreme Court, asserting four grounds of jurisdictional error. They primarily sought a declaration that the entire decision was void; alternatively, they sought a reduction of the adjudicated amount by the full liquidated damages claimed of approximately $1.13 million. The Court upheld two of the four grounds, found both errors to be material, and made orders under s 101(4) of the Act declaring the decision void to the extent it included $110,000 for PV019 liquidated damages and reducing the adjudicated amount by $130,000.
The parties then filed written submissions on costs. The applicants sought their costs on the standard basis, or alternatively 60 per cent of standard costs. The Contractor argued that the applicants had obtained only nominal relief and that costs should instead be awarded against them.
The Court’s Holding
Kelly J ordered the Contractor to pay the applicants’ costs of the proceeding, including reserved costs, on the standard basis to be assessed if not agreed. The Court rejected the Contractor’s characterisation of the $130,000 reduction as “nominal,” finding that description inaccurate as a matter of substance. The applicants had successfully established two grounds of jurisdictional error over the Contractor’s opposition, and had then demonstrated that those errors were material — also over opposition — before obtaining declaratory and consequential orders under s 101(4) of the Act.
Applying r 681 of the Uniform Civil Procedure Rules 1999 (Qld) as the starting point for the costs discretion, the Court held that the applicants were to be regarded as having won the event. The Court noted that the Contractor had maintained throughout that no jurisdictional error affected the adjudication and that the adjudicated amount should not be reduced at all; its resistance to any reduction made it inappropriate to treat the outcome as a de facto victory for the Contractor.
Key Takeaways
- A party that successfully establishes jurisdictional error in an adjudication decision and obtains a reduction of the adjudicated amount — even a reduction less than the maximum sought — will ordinarily be treated as the successful party for costs purposes.
- Courts will resist characterising a substantive monetary reduction in an adjudicated amount as “nominal” where the respondent contested any reduction at all throughout the proceedings.
- The default costs rule under r 681 UCPR (costs follow the event) applies to security-of-payment judicial review proceedings; a court must identify who won the event as a matter of substance and reality, not by comparing the outcome with the most ambitious relief claimed.
- Section 101(4) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) permits the Court to sever a jurisdictionally infected component of an adjudicated amount and reduce the sum payable accordingly.
Why It Matters
This decision provides practical guidance for contractors and principals engaged in judicial review of Queensland security-of-payment adjudications. It confirms that a claimant need not succeed on every ground, or obtain the full quantum of relief sought, to be entitled to a favourable costs order — success on the core question of jurisdictional error, resulting in a real (if partial) reduction of the adjudicated amount, is sufficient to constitute winning the event.
The judgment also serves as a caution to respondents who contest adjudication challenges in their entirety. By maintaining an absolute position that no jurisdictional error existed and no reduction was warranted, the Contractor foreclosed any argument that it had substantially prevailed, making an adverse costs order the inevitable consequence of the Court’s findings on the merits.