The recent QLD Supreme Court decision in Bridgeman Agencies Pty Ltd v S.E. QLD Plumbing & Drainage Pty Ltd concerns an appeal by the main contractor (Bridgeman) of an Adjudication decision in favour of the subcontractor (SE QLD Plumbing and Drainage) in the sum of approx. $103,000 for hydraulic services performed.
The main contractor argued that the Adjudicator did not have jurisdiction to make the determination because the subject payment claim (claim 4) was invalid on the basis that it did not sufficiently identify the construction work claimed for the purposes of s68(1)(a) of the BIF Act.
Claim 4 (like earlier claims 1 to 3) issued by the subcontractor attached worksheets which listed a trade breakdown and completed variations. The worksheets listed amounts claimed for each item of a trade breakdown and each variation as % complete of the total amount allocated for each item in the contract sum.
Earlier cases in QLD of KDV Sport and MWB Everton Park have held that work claimed by descriptions of % complete by reference to a trade breakdown may be insufficient if the work claimed as represented by the % complete is unclear on the facts.
In this instance, the scope of works document annexed to the Subcontract listed individual items of work within each trade breakdown. Separate worksheets for each claim and variations were also issued by the subcontractor as attachments with payment claims 1 to 3 that provided a detailed breakdown of the work items undertaken for each variation.
The main contractor contended that, notwithstanding the earlier worksheets exchanged between the parties, the documents relied upon to sustain a payment claim must be included in the payment claim itself, otherwise the payment claim was invalid.
The Court rejected that submission, stating “it is a settled principle that, in deciding whether work has been sufficiently identified, the background of each of the parties “derived from their past dealings and exchanges of documentation” is properly to be taken into account”.
In considering the claim 4 worksheet and variation worksheet (and other worksheets previously exchanged), the Court identified only 5 items included in claim 4 (items 11, 12, 22, 25 and 26) where the use of a % complete for the item was insufficient. The Court concluded the majority of the work claimed in claim 4 was sufficiently identified.
The Court went on to apply the principles in E Home Construction Pty Ltd v GCB Constructions Pty Ltd, such that if the majority of a payment claim includes items that can be claimed in a valid payment claim, the inclusion of minor insufficiently described amounts did not invalid the entirety of the payment claim. Accordingly, claim 4 was a valid BIF Act payment claim and the Adjudicator had jurisdiction to make the determination in favour of the subcontractor.
In this instance, the claimant subcontractor (more out of luck than good management) avoided the payment claim being declared invalid and Adjudication decision void.
Even where prior detailed descriptions have been exchanged in advance of a payment claim, claimants are well advised to ensure each amount claimed in a BIF Act payment claim is sufficiently identified, particularly when claiming by % complete of items in a trade breakdown. The objective is to ensure that whatever work is being claimed, it can be clearly identified by more than the % complete value in the payment claim.
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.
The recent QLD Supreme Court decision in Bridgeman Agencies Pty Ltd v S.E. QLD Plumbing & Drainage Pty Ltd concerns an appeal by the main contractor (Bridgeman) of an Adjudication decision in favour of the subcontractor (SE QLD Plumbing and Drainage) in the sum of approx. $103,000 for hydraulic services performed.
The main contractor argued that the Adjudicator did not have jurisdiction to make the determination because the subject payment claim (claim 4) was invalid on the basis that it did not sufficiently identify the construction work claimed for the purposes of s68(1)(a) of the BIF Act.
Claim 4 (like earlier claims 1 to 3) issued by the subcontractor attached worksheets which listed a trade breakdown and completed variations. The worksheets listed amounts claimed for each item of a trade breakdown and each variation as % complete of the total amount allocated for each item in the contract sum.
Earlier cases in QLD of KDV Sport and MWB Everton Park have held that work claimed by descriptions of % complete by reference to a trade breakdown may be insufficient if the work claimed as represented by the % complete is unclear on the facts.
In this instance, the scope of works document annexed to the Subcontract listed individual items of work within each trade breakdown. Separate worksheets for each claim and variations were also issued by the subcontractor as attachments with payment claims 1 to 3 that provided a detailed breakdown of the work items undertaken for each variation.
The main contractor contended that, notwithstanding the earlier worksheets exchanged between the parties, the documents relied upon to sustain a payment claim must be included in the payment claim itself, otherwise the payment claim was invalid.
The Court rejected that submission, stating “it is a settled principle that, in deciding whether work has been sufficiently identified, the background of each of the parties “derived from their past dealings and exchanges of documentation” is properly to be taken into account”.
In considering the claim 4 worksheet and variation worksheet (and other worksheets previously exchanged), the Court identified only 5 items included in claim 4 (items 11, 12, 22, 25 and 26) where the use of a % complete for the item was insufficient. The Court concluded the majority of the work claimed in claim 4 was sufficiently identified.
The Court went on to apply the principles in E Home Construction Pty Ltd v GCB Constructions Pty Ltd, such that if the majority of a payment claim includes items that can be claimed in a valid payment claim, the inclusion of minor insufficiently described amounts did not invalid the entirety of the payment claim. Accordingly, claim 4 was a valid BIF Act payment claim and the Adjudicator had jurisdiction to make the determination in favour of the subcontractor.
In this instance, the claimant subcontractor (more out of luck than good management) avoided the payment claim being declared invalid and Adjudication decision void.
Even where prior detailed descriptions have been exchanged in advance of a payment claim, claimants are well advised to ensure each amount claimed in a BIF Act payment claim is sufficiently identified, particularly when claiming by % complete of items in a trade breakdown. The objective is to ensure that whatever work is being claimed, it can be clearly identified by more than the % complete value in the payment claim.
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.
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