Getting it right: The requirements for a payment claim under the BIF Act revisited
Andrew Orford | Elissa Morcombe | Abhishek Rishi
Key takeout
A builder’s entitlement to progress payments under the Building Industry and Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) depends upon the builder giving a payment claim that complies with the BIF Act. A payment claim that meets some, but not all the requirements under the BIF Act, will mean the payment claim is invalid for the purposes of the BIF Act.
Facts
MWB Everton Park Pty Ltd (MWB) entered into a contract with Devcon Building Co Pty Ltd (Devcon) to design and construct 56 townhouses.
On 30 June 2023, Devcon sent an email to MWB purportedly attaching a spreadsheet with the heading ‘Project Summary’ and ‘Progress Claim’ and a statutory declaration (30 June documents). MWB did not treat this email as the payment claim and did not issue a payment schedule.
On 17 July 2023, Devcon sent another email to MWB with a second set of documents (17 July documents). The 17 July documents were described as ‘Tax Invoices’. MWB treated the receipt of those documents as a payment claim and responded with a payment schedule.
Devcon alleged that the 30 June documents constituted a payment claim and therefore MWB failed to deliver a payment schedule in time. MWB argued that they did not meet the statutory definition of a payment claim and the first time a payment claim was given was the 17 July documents. The payment schedule issued in respect of the 17 July document was delivered on time.
District Court decision
The primary judge decided that the 30 June documents satisfied the requirements for a payment claim under the BIF Act, ordering MWB to pay the amount of that claim, together with interest.
Appeal
MWB appealed the District Court decision primarily on the grounds that the primary judge incorrectly applied section 68 of the BIF Act and made errors dealing with the factual matters before her.
Decision
The Court of Appeal allowed the appeal and set aside the decision of the District Court. Dalton JA found that the 30 June documents did not meet the requirements of a payment claim under the BIF Act.
Section 68(1)(a) – Failure to identify the Construction Work
The trade summary attached to 30 June documents did not sufficiently identify the construction work and lacked sufficient detail to identify the construction work for the purposes of the Act. Specifically, in Her Honour’s view, in a contract such as this, it was ‘meaningless’ to say that 5% of concreting or 12% of plumbing had been completed.
This was regardless of the fact that it was in substance similar to previous claims. According to Dalton JA, the claim must meet the objective construction of a payment claim under the Act, which means it does not matter whether the principal subjectively understands it or not.
Section 68(1)(b) – Failure to state the one amount of progress payment
The 30 June documents failed to state the amount claimed by Devcon. Dalton JA rejected Devcon’s argument that the amount of $149,485 at the bottom of a table in the purported payment claim was the only amount payable and all the other pages were merely breakdowns of the relevant works.
In circumstances where the contract work was in several parts and the purported claim mentioned different amounts payable for separable portions, a failure to reconcile these amounts meant that the purported claim did not state one amount which was the claimed amount of progress payment.
Section 68(1)(c) – Failure to request payment of the claimed amount
Devcon submitted that the words ‘amount due this claim’ in the 30 June documents was a request for payment. The Court of Appeal disagreed. Dalton JA stated that ‘something more’ is required to satisfy the requirements of section 68(1)(c). While no particular form of words is necessary, the word ‘invoice’ (included in the 17 July documents) is taken to satisfy this requirement. A document titled ‘Project Summary’ was insufficient to amount to a request for payment.