The recent QLD Supreme Court decision in Forme Two concerns an appeal by the developer (Forme Two) in respect of an adjudicator’s decision in favour of the contractor (McNab) in the amount of approx. $186K relating to a development in New Farm.
The developer appealed the decision on the basis that the contractor’s BIF Act payment claim was invalid because it failed to comply with the 6 month time bar in s75(2) of the Act.
The Court was required to consider whether satisfaction of the requirements of s75(2) of the Act was a jurisdictional matter, or a matter within an adjudicator’s jurisdiction. A jurisdictional matter meaning that, if not properly decided by an adjudicator, it will invalidate an adjudication decision.
The Court ultimately held the respective time limits for interim claims in s75(2) and for final payment claims in s75(3) of the Act, are both jurisdictional limits which if incorrectly decided, would invalidate an adjudication decision – applying the earlier QLD Supreme Court decision in SHA.
Section 75(2) BIF Act states: “the claim must be given before the end of whichever of the following periods is the longest…..(a) as worked out under the construction contract; (b) the period of 6 months after the construction work to which the claim relates was last carried out". The central issue to be decided in the case (for the first time in QLD) was whether s75(2)(b) required that, to be a valid BIF Act payment claim, it must include a claim for work carried out in the 6 months prior to the giving of the claim, or whether all that is required is that any work must be carried out under the construction contract within 6 months of giving of the claim (even if there is no claim item for work performed within 6 months).
The contractor conceded that there was no claim for work performed within 6 months in the subject payment claim. The Court followed the approach in the NSW case of Estate Property Holdings regarding the equivalent 12-month time limit in the NSW SOP Act and held the words “to which the claim relates” meant that a valid payment claim must include a claim for work performed within 6 months.
The Court also held that although no opinion on s75(2) of the Act was expressed in the adjudication decision, by proceeding to decide payment in favour of the contractor, the adjudicator had determined that the subject payment claim satisfied s75(2) of the Act. By the contractor’s concession before the Court that there was no claim for work performed within 6 months in the subject payment claim, the Court held the adjudicator had incorrectly determined a jurisdictional matter. Accordingly, the adjudication decision was void on the basis that the subject payment claim was invalid.
Contractors, subcontractors, consultants and suppliers preparing BIF Act payment claims need to carefully consider the timing of claims later on their projects to ensure that any historical claims in dispute do not go unclaimed for an extended period where the contract work is delayed, winding down or otherwise complete, to avoid the 6 month time bar applied by the BIF Act to interim claims.
Julian Troy is founder and director at Troy Legal. With over 23 years experience in construction law, Julian cuts to the real issues and provides simple and effective advice to construction businesses across SEQ and Australia. Read more about BIF Act payment claims here.
The recent QLD Supreme Court decision in Forme Two concerns an appeal by the developer (Forme Two) in respect of an adjudicator’s decision in favour of the contractor (McNab) in the amount of approx. $186K relating to a development in New Farm.
The developer appealed the decision on the basis that the contractor’s BIF Act payment claim was invalid because it failed to comply with the 6 month time bar in s75(2) of the Act.
The Court was required to consider whether satisfaction of the requirements of s75(2) of the Act was a jurisdictional matter, or a matter within an adjudicator’s jurisdiction. A jurisdictional matter meaning that, if not properly decided by an adjudicator, it will invalidate an adjudication decision.
The Court ultimately held the respective time limits for interim claims in s75(2) and for final payment claims in s75(3) of the Act, are both jurisdictional limits which if incorrectly decided, would invalidate an adjudication decision – applying the earlier QLD Supreme Court decision in SHA.
Section 75(2) BIF Act states: “the claim must be given before the end of whichever of the following periods is the longest…..(a) as worked out under the construction contract; (b) the period of 6 months after the construction work to which the claim relates was last carried out". The central issue to be decided in the case (for the first time in QLD) was whether s75(2)(b) required that, to be a valid BIF Act payment claim, it must include a claim for work carried out in the 6 months prior to the giving of the claim, or whether all that is required is that any work must be carried out under the construction contract within 6 months of giving of the claim (even if there is no claim item for work performed within 6 months).
The contractor conceded that there was no claim for work performed within 6 months in the subject payment claim. The Court followed the approach in the NSW case of Estate Property Holdings regarding the equivalent 12-month time limit in the NSW SOP Act and held the words “to which the claim relates” meant that a valid payment claim must include a claim for work performed within 6 months.
The Court also held that although no opinion on s75(2) of the Act was expressed in the adjudication decision, by proceeding to decide payment in favour of the contractor, the adjudicator had determined that the subject payment claim satisfied s75(2) of the Act. By the contractor’s concession before the Court that there was no claim for work performed within 6 months in the subject payment claim, the Court held the adjudicator had incorrectly determined a jurisdictional matter. Accordingly, the adjudication decision was void on the basis that the subject payment claim was invalid.
Contractors, subcontractors, consultants and suppliers preparing BIF Act payment claims need to carefully consider the timing of claims later on their projects to ensure that any historical claims in dispute do not go unclaimed for an extended period where the contract work is delayed, winding down or otherwise complete, to avoid the 6 month time bar applied by the BIF Act to interim claims.
Julian Troy is founder and director at Troy Legal. With over 23 years experience in construction law, Julian cuts to the real issues and provides simple and effective advice to construction businesses across SEQ and Australia. Read more about BIF Act payment claims here.
