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For lawyers advising contractors and subcontractors, I would distil my years on both sides of the site fence into five practical points, writes Albert Merolla.
I spent more than three decades as an engineer and project manager on major construction and infrastructure projects before I ever practised law. Of everything site life teaches you, the first lesson is that construction runs on cash flow, not concrete. When payment stops, everything stops, and right now, payment stress across the industry is as acute as I have seen it.
The figures bear that out. ASIC’s insolvency statistics show 3,596 construction companies entering external administration in FY2024–25, up from 2,977 the previous year, with construction again the largest single contributor to corporate failure in Australia.
In Queensland, the statutory pressure valve is adjudication under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act). The QBCC’s 2024–25 annual report offers a rare, current snapshot of that system in action. The Adjudication Registry received 324 valid applications, 273 standard claims of up to $750,000 and 51 complex claims above that threshold, together claiming $516.7 million. Decisions were released in 214 matters, some lodged in earlier periods, and of the $956.9 million in claims decided, adjudicators awarded $81.9 million.
Read that again: roughly nine cents in the dollar. One decided claim of $634 million admittedly distorts the ratio, but even setting that outlier aside, awards run at a fraction of amounts claimed, and the pattern matches what I see in practice: parties chronically over-claim and under-document. Adjudication delivers quick, interim justice, but only to those who did the paperwork long before the dispute arrived.
That is the lesson practitioners should take from the registry’s tables: adjudications are won on site, not in the registry. A payment claim built on the wrong reference date invites a jurisdictional challenge. A respondent that misses the deadline for a payment schedule under section 76 of the BIF Act can find itself, by force of section 82(4), shut out of reasons it never stated. And claimants must give the respondent a copy of the adjudication application and submissions within four business days under section 79(3), an obligation the Supreme Court enforced strictly in Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2023] QSC 290, holding that the registry’s summary of an application did not comply, before Parliament amended and validated the provision with effect from 1 July 2024. Even the machinery provisions are unforgiving.
For lawyers advising contractors and subcontractors, I would distil my years on both sides of the site fence into five practical points.
First, diarise the statute, not just the contract. Security-of-payment timeframes run regardless of what the contract says, and a missed deadline is rarely forgiven.
Second, treat the payment schedule as the whole defence. In most jurisdictions, reasons not included in the schedule are lost. Respondents who answer a $2 million claim with a one-line email are conceding before the adjudicator is appointed.
Third, kill the ambit claim. An inflated claim invites a credibility finding that poisons the legitimate components. The registry’s nine-cents-in-the-dollar outcome is, in large part, self-inflicted, and even with the outlier stripped out, awarded-to-claimed rates remain soberingly low.
Fourth, remember adjudication is interim. The decision is enforceable immediately, but it is rough justice on the documents. Use it as a cash-flow tool and a settlement lever, not as a substitute for final determination where the merits warrant it.
Fifth, records win cases. The strongest adjudication applications I have seen were, in truth, written months earlier, in signed site diaries, contemporaneous delay notices and disciplined progress reporting. When the dispute arrives, there is no time to reconstruct a record that was never kept.
Reform will keep coming. The trust account framework continues to bed down, other states are rewriting their own security-of-payment regimes, and the policy debate about harmonisation is far from settled. But no amendment yet devised substitutes for disciplined contract administration. Clients who understand that will rarely need an adjudicator; those who do not will keep discovering, at nine cents in the dollar, why it matters.
Albert Merolla is a solicitor and chartered engineer for Baker Merz Lawyers who practises exclusively in construction law.
