Payments
Progress Payments (Chapter 3 BIFA)
Whether you are a subcontractor, head contractor, supplier, consultant or client it is imperative that you understand your rights and obligations under chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017 (BIFA) and to ensure that you execute the contract in accordance with the Act. Serious consequences apply to many of the obligations with regard to BIFA progress payments including fines and, if you also hold a contractor’s licence, disciplinary action by the Queensland Building and Construction Commission. There are also serious legal consequences that apply if you don’t give a payment claim properly or if you do not respond to a payment claim properly.
The role of the Superintendent under a construction contract has changed as a result of the introduction of chapter 3 of the BIFA and it is critical for all parties, the Principal, the Superintendent and the Contractor, to understand the changes to ensure that your rights are not adversely affected as a result of the inclusion of a Superintendent on the project.
Wood L&M Solutions is able to assist with the following in relation to chapter 3 of the BIFA:
- Payment Claims;
- Payment Schedules;
- Adjudication Applications;
- Adjudication Responses;
- Further submissions if requested by the Adjudicator;
- Payment withholding requests;
- Charges over property.
Our extensive experience in the administration of construction contracts and our understanding of the execution of projects provides you with the knowledge necessary to either claim or defend a claim on the strongest grounds possible.
In the event that you have received an adjudication decision that is not in your favour, we are able to review the decision to determine your prospects of success in applying for an urgent injunction to stay the enforcement of the adjudication decision and applying for the decision to be set aside. There are very narrow grounds on which an adjudication decision may be set aside and time is critical if you wish to make such an application. Please contact us urgently if you wish to consider making applications such as these.
QBCC Monies Owed Complaint
The ‘monies owed complaint’ is essentially a complaint made to the Queensland Building and Construction Commission against a licensee that it has failed to meet the minimum financial requirements of its licence in relation to payment of its debts. However, a number of changes occurred to the monies owed complaint process through the inclusion of the Minimum Financial Requirements (MFRs) in the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 (MFR Regulation) which commenced on 1 January 2019 because the rules around debts changed significantly. Essentially, it is a requirement on all licensees to pay a debt that is owing to a contracted party, or a supplier of goods or services, on or before the day the debt becomes due and payable.
However, the rules around when a debt becomes ‘due and payable’ have changed as well e.g. it is not due and payable if the amount of the debt is equal to or less than an amount owed by the creditor to the licensee, or if the debt is the subject of a dispute when it becomes due and payable.
Subcontractors' Charge (Chapter 4 BIFA)
Whether you are the subcontractor giving the subcontractor’s charge or the contractor or principal receiving a subcontractor’s charge, it is imperative that you comply with your obligations under chapter 4 of the BIFA as serious consequences apply to many of the obligations including fines and legal consequences if you do not give, or respond to, a valid subcontractor’s charge.
Wood L&M Solutions is able to assist with the following in relation to chapter 4 of the BIFA:
- submitting a request for information to the contractor;
- giving a Notice of Claim to the person obliged to pay the money under a higher contract;
- responding to a Notice of Claim given by a subcontractor.
It is critical that a notice of claim is given properly to be effective otherwise it will be of no effect. It is also critical that a notice of claim be given within the applicable timeframe.
Debt Recovery through QCAT
All disputes relating to ‘building work’ (as defined in the Queensland Building and Construction Commission Act 1991) must be commenced as a ‘building dispute’ in the Queensland Civil and Administrative Tribunal (QCAT). This includes any action to recover a debt relating to ‘building work’. It must not be commenced as a ‘debt dispute’ or a ‘minor civil dispute’. If it is incorrectly commenced, it is likely that the QCAT Member will dismiss the application and/or insist on the matter being transferred as a ‘building dispute’.
However, prior to making an application to QCAT for a building dispute, the parties must first have participated in a dispute resolution process with the QBCC and evidence of such participation must be lodged with all building dispute applications to QCAT.
QCAT has authority to hear matters involving domestic building work of all values and commercial building work up to $50,000. If the parties agree, commercial building dispute matters of more than $50,000 can be heard provided the necessary paperwork is properly lodged with QCAT.
QCAT is designed to be less formal than a court and the parties are largely represented by themselves (i.e. not lawyers) and legal representation is only permitted by application to the QCAT Member in exceptional circumstances. However, it is always advisable to obtain legal advice prior to commencing proceedings in any court or tribunal to be sure of your rights and to ensure that you correctly make the application.
Prior to a QCAT hearing, the parties may be required to attend a Compulsory Conciliation Conference where a QCAT Member, Adjudicator or the Principal Registrar will assist the parties to reach agreement regarding the dispute. If agreement is reached, the QCAT representative will record the terms of the agreement in writing and make the orders necessary to give effect to the agreement. Each party will need to sign the agreement. If agreement is not reached, the QCAT representative will manage the dispute by making directions or orders aimed at reducing the issues in dispute that are to be determined at the QCAT hearing.
Debt Recovery through Litigation (Magistrates Court, District Court, Supreme Court)
Attempting to recover a debt through litigation in the Magistrates Court (up to $150k), the District Court (up to $750k) or the Supreme Court (over $750k) is time consuming and expensive. It is almost always best to focus your efforts on other ways to reach an agreement over money if at all possible. However, sometimes it is the only option – either because you have exhausted all other dispute resolution avenues or you are on the receiving end of a court application. Either way, strict timeframes apply so it is important to seek legal advice early to understand what those timeframes are, what options you have to seek recovery or to respond, what evidence you need to obtain (which may include engaging an expert to provide additional supporting evidence), and generally what you need to do.
We can assist you with all aspects of litigation and we work with other law firms where it is in our client’s best interests to do so.
Last updated: 30 December 2021