The Building and Construction Industry Payments Act
2004 ("BCIPA") remains a powerful
tool for contractors in the recovery of payment for their works.The
Queensland Supreme Court recently in Civil Mining &
Construction Pty Ltd -v- Isaac Regional Council  QSC 231
once again reinforced this point in its consideration of the
validity of a payment claim in the face of a previous payment claim
of same fact being declared void and the matter concurrently being
dealt with under the mechanisms provided in the contract.
Civil Mining & Construction Pty Ltd
("CMC") and the Isaac Regional Council
(the "Council") entered into a contract for road works
construction. As part of the many disputes that occurred throughout
the construction CMC served a payment claim under BCIPA (described
as payment claim 8).In considering payment claim 8the adjudicator
awarded CMC $9,923,090.87 of the $20,063,438.16 claimed. The
Council in response applied to the court to declare the
adjudication decision void because of defective service. In
response to the Court's early indication that the Council's
request would likely be upheld the parties consented to orders to
have the Adjudicator's decision set aside.
Around the same time of consenting to the orders CMC served a
further payment claim for $36,451,859.29 for work completed up to
final stage including works already considered in the now void
payment claim 8 (the new payment claim being referred to as payment
claim 11). In response the Council served its payment schedule for
a lesser amount and applied to the Court for an injunction
preventing the matter from going to adjudication. Council's
position was that:
Nearly all of the components of payment claim 11 fell within
the previous void claims including payment claim 8;
CMC was aware that the claim is substantially disputed by the
CMC had also invoked the dispute resolution provisions of the
contract which was expected to result in an arbitration of
effectively the same matters.
Supreme Court Decision
Justice McMurdo decided that although the previous adjudicator
decisions were declared void, the declaration did not have the
effect of preventing a further payment claim being made. The
setting aside of the decision of the adjudicators had the effect of
putting the parties in the same position as if there had been no
adjudication at all.
Whilst s17(5) of BCIPA prevents a contractor from serving more
than one (1) payment claim in relation to the reference date, the
Council conceded that payment claim 11 had a different reference
date from that of payment claim 8. As a result, CMC was entitled
pursuant to s17(6) to include in its payment claim an amount that
has been the subject of a previous claim.
Justice McMurdo went on to consider the Council's second
argument in which it was alleged that CMC's knowledge of the
fact that the claim was substantially disputed would prevent an
adjudicator's consideration of payment claim 11. Justice
McMurdo found that such a fact could not be a bar to pursuit of a
claim under BCIPA which clearly provides claimants with the remedy
of an adjudication in the very circumstance where their claims are
In consideration of Council's third argument, Justice
McMurdo determined that it has been well established that the
statutory remedies provided in BCIPA and other remedies contained
within the contract could be pursued concurrently in relation to
the same dispute.
What this means
The fact remains, the recipient of a payment claim must act
quickly in preparing and serving a payment schedule regardless of
what else is occurring with the disputed works. Failure to do so
could result in the recipient losing its right of reply and being
required to pay the full amount of what is claimed.
Contractors on the other hand should consider the possibility of
serving a payment claim under BCIPA even if the matter is disputed
under the contract and/or an adjudication decision was previously
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.
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