Allencon Pty Ltd v Palmgrove Holdings Pty Ltd trading as Carruthers Contracting [2023] QCA 6

Andrew Orford  |  Sarah Cahill  |  Ali Harris

Key takeout

When reckoning time under the Building Industry Fairness (Security of Payment) Act (Qld) (BIFA), if the word ‘day’ is used in the construction contract to prescribe a period of time and the contract defines that term as being a ‘calendar day’, it does not create an inconsistency with the BIFA.

If a payment schedule is to be delivered within 21 calendar days and that time period ends earlier than 15 business days, then the former is the time period by which the payment schedule must be delivered by virtue of section 76 of BIFA.  If the 21 calendar days falls over the Christmas – New Year blackout period, a respondent will not have the benefit of the BIFA blackout period.

Facts

Allencon Pty Ltd (Allencon) entered into a subcontract with Palmgrove Holdings Pty Ltd (trading as Carruthers Contractors) to construct roadworks (subcontract).

Allencon delivered a payment claim on 24 December 2021 (payment claim).

On 28 January 2022, Carruthers delivered a payment schedule. This was 15 business days after the delivery of the payment claim taking into account the Christmas – New Year blackout period defined in schedule 2 of BIFA, which is excluded from the definition of business days. The subcontract, however, required a payment schedule to be issued within 21 days of receipt of the claim for payment, where ‘day’ was defined to mean ‘calendar day’. Reckoning time this way required the payment schedule to be issued by 14 January 2022.

Decision

The Court of Appeal allowed the appeal, set aside the original orders made by the District Court and entered judgment for Allencon.

The Court of Appeal held the payment schedule was not served within time.

The District Court had held that the payment regime in the subcontract was in conflict with the regime under the BIFA, which defined ‘day’ to mean ‘business day’. See Christmas shut down: Contractual payment regime read down to align with BIF Act.  As section 200 of BIFA prohibits parties from contracting out of the requirements under BIFA, Burnett DCJ found that the Act creates a benchmark statutory regime incorporating the Christmas – New Year blackout period in accordance with general industry standard, and that Carruthers had in fact submitted the payment schedule on time.

Carruthers’ case was that the subcontract did not provide a period within which the payment schedule was required to be given under section 76(1)(a) of the BIFA. Accordingly, under section 76(1)(b) of BIFA, the period for the delivery of the payment schedule expired on 31 January 2022, meaning the payment schedule was given within the required period (taking into account the days excluded as business days as defined by schedule 2 of BIFA).

The critical issue on appeal was whether the subcontract prescribed a period for the delivery of a payment schedule in response to a payment claim. The Court of Appeal agreed that it was both a payment claim made under the subcontract, and a payment claim under the BIFA. That is, the claim gave particulars of the amount by reference to 28 items of work and materials, each of which was quantified, and gave details of the amounts previously paid. Accordingly, the claim contained the requisite details required for a payment claim under section 68 of the BIFA. It was immaterial that the document did not expressly refer to the BIFA.

Since the claim was a payment claim under the BIFA, the court found that it required in response a payment schedule that met the requirements of section 69 of the BIFA. The subcontract operated such that where a claim for payment contained a payment claim under the BIFA, the required response under the subcontract would inevitably satisfy the requirements of a payment schedule under the BIFA. In the subcontract the parties agreed that in such a case, a payment schedule was to be given within a period of 21 days in accordance with the terms of the subcontract. In this case, that period expired on 14 January 2022, meaning Carruthers failed to give a payment schedule as required under section 76 of the BIFA and was liable to pay the full amount claimed under section 77.