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[2023] QCA 6
The issue on appeal was whether a subcontract prescribed a period for the delivery of a payment schedule in response to a payment claim. At first instance, the trial judge found that despite the claim for payment satisfying both the clause of the subcontract and the Building Industry Fairness (security of Payment) Act 2017 (“the Act”), the time period stipulated under the subcontract did not apply as it was inconsistent with the time period specified under the Act. On appeal, Justice McMurdo (with whom President Mullins and Justice Flanagan agreed) found that the subcontract prescribed a period within which to issue a payment schedule and by virtue of s 76(1) of the Act the relevant time was that specified under the subcontract.
Mullins P and McMurdo and Flanagan JJA
3 February 2023
A claim for payment was made by the appellant, a subcontractor, pursuant to the terms of a subcontract. It was not in dispute that the terms of the subcontract were such that the claim for payment was also a payment claim under s 68 of the Act. [6]. The main contractor (the respondent in the appeal) failed to provide a payment schedule by the date specified in the subcontract. Rather, it argued at trial and on the appeal that in the terms of s 76(1)(a) of the Act, the subcontract did not provide a period within which the payment schedule was required to be given. [8] Consequently, the period for the delivery of the payment schedule expired on 31 January 2022 and the payment schedule was given within the correct time period. [8].
McMurdo JA identified the critical issue on appeal as “whether the subcontract prescribed a period for the delivery of the payment schedule in response to a payment claim”. [10]. The court answered the question in the affirmative.
Relevantly, the subcontract specified that a payment certificate needed to be issued within 21 calendar days, such that the payment schedule was due by 14 January 2022. [7]. The appeal court found that although the requirements of the payment certificate under the subcontractor were not identical to the requirements of the content of a payment schedule under the Act, everything that was required for a payment schedule under the Act was also required for a payment certificate under the subcontract. [34]. Under the subcontract, the payment certificate could be issued by a representative authorised by the main contractor, but the subcontract also provided that the authorisation of the representative could be withdrawn “within the time allowed by the [Act] for service of a payment schedule”. One interpretation of such a clause could result in the payment certificate having a provisional or conditional effect as a payment schedule. However, the Court found that where that is a possibility, the subcontract should be construed to avoid the inconsistencies which would result from an agreement that the payment schedule had conditional or suspended effect. [36]–[37].
The result was that the combined operation of the clauses of the subcontract were such that the period specified under the subcontract for a payment schedule applied in this situation. Accordingly, the date by which the main contractor was required to provide the payment schedule was 14 January 2022, and its failure to do so entitled the appellant to payment of the amount claimed.
Disposition
The appeal was allowed.
S Parvez of Counsel