Most Read Contributor in Australia, September 2016
In case further confirmation of the courts support for the
strict enforcement of the Building and Construction Industry
Payments Act (Act) was required, the
Queensland Supreme Court, on Thursday, 13 September 2012 handed
down its decision in The State of Queensland v T&M Buckley
Pty Ltd (Receivers & Managers Appointed).
The issue was the operation of purported preconditions to the
existence of a reference date under the Act and as such, a
Claimant's ability to serve a payment claim under the Act.
The relevant portion of the clause provided as follows:
Subject to the prior receipt by the Superintendent of the
information required by clause 43.2, at the times for payment
claims stated in the Annexure....
Clause 43.2 of the contract provided that prior to the making of
a payment claim the Contractor must deliver to the Superintendent a
statutory declaration in the normal form attesting to the fact that
all Subcontractors had been paid all amounts due and payable as at
the date of submission of the payment claim.
The Contractor purported to serve a payment claim under the Act
without having provided the statutory declaration. Unsurprisingly,
the Respondent rejected the payment claim on the basis that it was
invalid as the reference date had not arisen (by operation of the
precondition). The matter proceeded to adjudication and the
Claimant was successful. The Respondent applied to the Supreme
Court for a declaration that the adjudication decision was void on
the basis that no reference date had arisen and as such, the
payment claim was void.
The Queensland Supreme Court however concluded that whilst the
precondition operated to restrict the right of the Contractor to
deliver a contractual claim it did not effect the reference date
under the Act and did not operate as a
precondition to the reference date arising under the Act. In
reaching this decision, the court also questioned the correctness
of the previous Supreme Court decision in Simcorp
This decision is the second decision within the last month where
the court has restricted the operation of such a clause to only the
contractual claim under the contract. In BHW Solutions Pty Ltd
v Altitude Constructions Pty Ltd the Queensland Supreme Court
concluded that a clause which purported to operate as a
precondition to payment was only applicable to the contractual
claim under the contract and not a payment claim under the Act.
Whilst at first glance these decisions may appear restrictive
they garner support from the New South Wales Supreme Court decision
in Thiess Pty Ltd v Lane Cove Tunnel Nominee Company Pty
Limited where the court concluded that if the time period for
service of a payment schedule under the Act was to be reduced it
would require clear and express words to that effect to be
contained in the contract.
Accordingly, these two decisions do not "close the
door" on preconditions to payment and/or preconditions to
reference dates. However, these decisions establish (without any
doubt) that for such preconditions to operate successfully in
relation to claims made pursuant to the Act clear and
express words will be required to be included in the
If we can be of any assistance in ensuring such clauses are
appropriately worded in your contracts please do not hesitate to
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).