Introduction

Welcome to the December 2010 edition of Critical Path.

In this edition we:

  • consider the effect of amending contract documents during contractual negotiations without drawing the amendments to the attention of the other party to the transaction
  • investigate various models for construction management contracting
  • report on recent case law from the Queensland Supreme Court which suggests that a claimant can now deliver two identical payment claims in certain circumstances under the Building and Construction Industry Payments Act 2004, and
  • examine a decision of the New South Wales Court of Appeal which discusses the grounds upon which an adjudicator's decision can be challenged.

We hope you find these articles interesting as well as informative. If you have any questions regarding their content, please contact us.

James Morgan-Payler

Partner and Editor of Critical Path

You can now pursue identical payment claims under the Queensland Security of Payment Act

Serving later identical payment claims under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) is now permitted following the recent decision of the Queensland Supreme Court in Spankie & Ors v James Trowse Constructions Pty Ltd & Ors [2010] QSC 336 (Spankie).

On 31 August 2009, the claimant in Spankie served a payment claim on the respondent for about $446,000.00. An adjudicator appointed made a decision in the claimant's favour. That decision was later declared void by the Courts, for unrelated reasons, and the claimant was not entitled to the adjudicated amount.

On 31 May 2010, the claimant served another payment claim, which was identical to the payment claim served on 31 August 2009.

Section 17(5) of the BCIPA provides that a claimant cannot serve more than one payment claim for each reference date, being (usually) a date from which the claimant is entitled to a progress payment under the construction contract. However section 17(6) provides that section 17(5) does not prevent a claimant from "including" in a payment claim an amount that has been the subject of a previous claim.

The Queensland Supreme Court, most notably in Doolan v Rubikcon (Qld) Pty Ltd [2008] 2 Qd R 117, considered that the use of the word "including", meant that the later payment claim must not be the same as an earlier payment claim, but must include some additional amount or construction work claimed. The Court in Spankie disagreed and determined that an identical payment claim can be served from a later reference date. However this decision does not detract from the now settled principle that a claimant cannot claim under the BCIPA an amount which has been the subject of an earlier valid adjudicator's decision.

The state of play (at least in Queensland) following Spankie is:

  1. A payment claim will not be invalid because it is identical to an earlier payment claim.
  2. A claimant is not entitled to claim under the BCIPA an amount which has been the subject of an earlier valid adjudicator's decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.