Case Note: York Property Holdings Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd [2025] QCA 204
Executive Summary
The Queensland Supreme Court of Appeal refused an application for an interlocutory injunction, pending an appeal against an adjudication decision favouring the builder. On account of limited evidence, risk of non-payment was deemed speculative, and insufficient to warrant disturbing the statutory intent of prioritising cashflow and repayment risk allocation on the principal.
Facts
York Property Holdings (the Applicant) engaged Tomkins Commercial & Industrial Builders (the Respondent) to construct an apartment complex known as Midwater at Main Beach for approximately $128 million. Under an escrow deed, $25 million was held by HWL Ebsworth Lawyers (HWLE) in an escrow account, to be released amongst other reasons, upon the Respondent’s provision of an adjudication decision. On 22 September 2024, an adjudication decision under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) awarded the Respondent approximately $4.76-$5.24 million (the PC32 sum), plus interest at 14.39% p.a.
At first instance, payment of the adjudicated amount was ordered. York appealed and sought an injunction to restrain HWLE from paying the funds and the Respondent from enforcing the court order pending appeal of the Adjudication Determination.
Issues to be Determined
On appeal, the Court was asked to determine the following question:
Whether the Applicant should be granted interim injunctive relief restraining payment from the escrow account and enforcement of the adjudication decision pending the outcome of its appeal.
Court of Appeal Decision
The Court dismissed the application.
Legal Reasoning
The Applicant argued that payment posed a risk of non-repayment should the Respondent later become insolvent. The Court rejected this as speculative and unsupported by sufficient evidence. Further, the Court emphasised the statutory purpose of BIF Act, that is, to preserve contractor cash flow and allocate the risk of non-repayment to the principal.
The parties’ escrow deed reflected this same allocation, entitling the Applicant to payment upon an adjudication decision or court order. Accordingly, granting an injunction would undermine both the statutory purpose and the agreed risk structure, particularly as the Applicant’s entitlement had already been confirmed by the Court after a contested hearing.
Further, as has become more frequent in Court proceedings involving, Adjudications which are
difficult to overcome the Court of Appeal found that the prospects of the Applicant succeeding in its appeal were such that it did not alter the “balance of convenience”.
Key Takeaways
- This decision stands as a reminder for both developers and builders of the strict operation
of the Security of Payment regime in preserving contractor cash flow and to allocate the risk of non-repayment to the principal. - Upon an adjudication determination upheld by a court, in the absence of real and sufficient
evidence of insolvency risk, it is difficult to obtain interlocutory injunction orders. In such
circumstances, the court will favour to uphold the statutory ‘pay now, fight later’ principle.
More information
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