Commercial construction businesses in Queensland are well aware of the strategic advantage of submitting progress claims that are also valid payment claims under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).
Many commercial contractors, subcontractors, consultants and to a lesser extent suppliers in Queensland were taken by surprise following clarification of the rules for preparing valid payment claims under the BIF Act with the Qld Supreme Court decision in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178 (KDV Sport).
Prior to KDV Sport, payment claims were commonly prepared simply by reference to a trade or contract breakdown and progressive % complete claimed for each trade since the previous claim.
The payment claim in issue in KDV Sport was a single page tax invoice that claimed payment by reference to % complete of a trade breakdown identifying lump sum prices allocated to each trade (as part of the lump sum contract price), amounts previously claimed for each trade as a %, amounts paid to date and the amount now claimed.
The Court in KDV Sport held that progressive increases in % complete for trade items (and related values claimed) give no indication of the particular work undertaken for each trade item since the previous claim and fails to properly identify the particular work claimed.
For example, if plumbing and drainage work was 20% complete with claim 1 and is claimed as 50% complete in claim 2 (i.e. claiming the additional 30% value for that trade, without more), the particular plumbing and drainage work undertaken and claimed in claim 2 is not apparent to the recipient.
Accordingly, if claiming for payment by progressive % complete against a trade or contract breakdown, further descriptions of the actual work done since the previous claim are required to be included in the payment claim to ensure it is a valid payment claim under the BIF Act. Troy Legal provides expert advice on the preparation of payment claims under the BIF Act, contact us now on 07 3012 6657.
