Andrew Kelly

“Working out” the period for serving a payment claim in Queensland

Andrew Kelly

13 September, 2019

Security of payment

Claimants will lose their right to recover payments if they fail to serve a payment claim in time

In Queensland, a recent decision serves as a reminder that claimants will lose their right to recover payments if they fail to serve a payment claim in time, be that calculated in accordance with the terms and conditions of the contract, or within the applicable statutory period.  The decision, detailed below, confirms that “reference dates” under the contract will not work out a period to serve a payment claim, and unless the contract mandates a different period, builders will have 6 months from the completion of work to issue payment claims.

Background

The Brisbane Construction and Infrastructure team at Thomson Geer recently acted successfully for United Petroleum Pty Ltd in the Supreme Court of Queensland proceeding Evans Built Pty Ltd v United Petroleum Pty Ltd & Anor [2019] QSC 223.

The matter dealt with the critical issue as to the latest period a builder could issue a payment claim under the security of payment regime.  In relation to payment claims, the Queensland security of payment legislation mandates a period of 6 months after the work was carried out or the period worked out under the contract, whichever is later.  In this case, the Court considered what was meant by “the period, if any, worked out under the construction contract” under section 17A of the Building and Construction Industry Payments Act 2004 (Qld) (which is now section 75(2) of the Building Industry Fairness (Security of Payments) Act 2017 (Qld))

The builder, Evans Built sought to argue that “reference dates”, that is the dates upon which a contractor is entitled to issue progress claims, could represent the period under a construction contract from which a claim could be made.  The judge was not persuaded by this argument, finding that the references dates which entitled Evans Built to make claims on the 25th day of each month did no more than stipulate the frequency with which progress claims could be made under the contract; they said nothing about the period within which progress claims must be served.

Accordingly, Justice Burns determined that “the period for making of a payment claim should be six months after the construction work to which the claim relates” as prescribed by section 17A of the Building and Construction Industry Payments Act 2004 (Qld).  As no work had been performed in the last 6 months, the Supreme Court dismissed the application with costs, finding that the adjudicator did not err in concluding that he lacked jurisdiction to determine the application.

For more information on this decision, or what the implications are for you or your business, please contact:

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au

Sam Lenz | Paralegal/Law Clerk | +61 7 3338 7492 | slenz@tglaw.com.au