Exit Distraction Free Reading Mode
- Selected for Reporting
[2024] QCA 94
The question in this matter was whether certain documents submitted in the form of a spreadsheet with various tables and amounts included satisfied the requirements for a “payment claim” under s 68 Building Industry Fairness (Security of Payment) Act 2017. The Court considered the requirements of s 68 and held that it did not. That was so because the impugned documentation: (1) did not identify the construction work to which the progress claim related; (2) did not state the claimed amount of the progress payment; and (3) did not request payment of the claimed amount. The Court accordingly allowed the appeal, setting aside the application for the payment claim.
Dalton JA, Brown and Kelly JJ
24 May 2024
Facts
The respondent entered into a construction contract with the applicant to design and construct 56 townhouses for $17,216,874. The respondent brought two applications pursuant to s 78(2)(a) Building Industry Fairness (Security of Payment Act) 2017 (“BIF Act”) seeking the payment of $149,485.60 from the applicant in relation to a progress claim. The primary judge determined that a payment claim had been made pursuant to the BIF Act and ordered that the applicant pay that claim to the respondent. The applicant appealed on the basis that the primary judge incorrectly applied s 68 BIF Act, and made errors dealing with certain factual matters. [2], [4].
The purported payment claim
The respondent builder sent an email to the principal on 30 June 2023 which had two attachments. The first was a three-page spreadsheet dated 30 June 2023 headed, inter alia, with “Progress Claim” and described as Progress Claim 17. The spreadsheet showed a table listing 42 trades, against each was listed a contract value as a monetary sum. Relevantly, one column showed a percentage in a column labelled “% Complete”. Against each trade was a monetary amount under a column headed “Current Claim” and a column containing another monetary figure headed “Remaining Balance”. Under a small box containing a monetary amount against various descriptions was another small box showing the words “Amount Due this Claim (ex GST)” and another figure. The second document was a statutory declaration by a director of the builder in connection with Progress Claim 17. [10]–[15].
The progress claim
The respondent builder sent the applicant a second email containing five invoices on 17 July 2023. Also attached to that email was the spreadsheet sent on 30 June 2023, as well as the statutory declaration by the director of the builder sent on that date. [16]–[17].
At the foot of each invoice was the statement “This claim is made under the Building Industry Fairness (Security of Payment) Act 2017” along with a declaration that all subcontractors had been paid “as at the date of this payment claim”. The applicant responded to those invoices with a payment schedule. [18]–[19].
Was there a payment claim under s 68 BIF Act?
The respondent argued that the documents sent on 30 June 2023 constituted a payment claim and the applicant’s payment schedule was issued out of time. The appellant contended to the contrary that the documents sent on 30 June 2023 did not meet the statutory definition of a payment claim and that the first time a payment claim was given was on 17 July 2023 such that its payment schedule had been provided in time. [20].
Section 68(1) BIF Act relevantly defines “payment claim” as follows:
“(1)A payment claim, for a progress payment, is a written document that—
(a)identifies the construction work or related goods and services to which the progress payment relates; and
(b)states the amount (the claimed amount) of the progress payment that the claimant claims is payable by the respondent; and
(c)requests payment of the claimed amount; … .”
The Court considered that there were three reasons why the documents sent on 30 June 2023 did not meet this statutory definition.
First, those documents did not identify the construction work to which the progress claim related within the meaning of s 68(1)(a) BIF Act. That is because the contract in question was for the construction of 56 townhouses – it was meaningless to say that a certain percentage of certain works had been completed. More description was required for the document to sufficiently identify the construction work for the purpose of s 68(1)(a). It was irrelevant that this was the 17th progress claim and that it was in substantially the same form as the earlier claims. Whether or not the documents meet the statutory definition is a matter of objective construction, so it did not matter that someone on behalf of the principal did not swear that they did not understand what work had been done in respect of the 17th claim or any preceding claim. Principals have no statutory obligation to make a payment claim or respond with a payment schedule to something that is delivered to the principal but does not meet the statutory definition of “payment claim”. [24]–[26].
Second, it did not appear from the email of 30 June 2023, or any of the attachments, what the amount of the payment claim was, such that the purported claim did not state the claimed amount of the progress payment as required by s 68(1)(b) BIF Act. [28]–[33].
Third, the 30 June 2023 email and its attachments did not request payment of the claimed amount. Section 68(1)(c) requires that the written notice must identify the construction work to which a progress claim relates, and the amount of the progress payment which is claimed by the builder as payable by the principal must be stated. The statement “Amount Due this Claim” was regarded by the Court as “an identification by the builder of the progress payment which it claimed was payable by the principal” as required by s 68(1)(b), but that s 68(1)(c) required that there be a request for payment of the amount claimed. Something which amounts to a request for payment – such as documentation being headed “Invoice” and not “Project Summary”, as it was here – is required to be expressly contained in or clearly implied in the document. Nothing in the email and attachments of 30 June 2023 requested payment to that effect. [34]–[35].
The Court also considered the effect of Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2024] QSC 16. In that case, a document which was not an invoice was found to be a payment claim even though it did not expressly request payment. There was no relevant distinction between the documents in that case and in the present case. The judge in Iris Broadbeach was prepared to find that the documentation impliedly included a request for payment because the document was headed “Progress Claim”, gave a figure for a “Total Progress Claim Value for the Month (Incl GST)”, was annotated to the effect that the claim was submitted under the BIF Act, and was accompanied by a statutory declaration similar to the one made in the present case. The Court did not consider the analysis in Iris Broadbeach to be persuasive and declined to follow its reasoning.
Disposition
The Court gave leave to appeal and allowed the appeal, setting aside the order made below and in substitution ordered that the originating application seeking payment against the applicant be dismissed. The Court also ordered that the respondent pay the applicant’s costs below and of the appeal.
A Lukacs