Construction contracts often require contractors to sign a
statutory declaration affirming that all subcontractors have been
paid. In a recent Queensland Supreme Court decision, Applegarth J
found that non-compliance with the statutory declaration condition
did not restrict a contractor's statutory right to make a
payment claim. The contractual requirement that the contractor
provide a statutory declaration before it could make a progress
claim was void under section 99 of the legislation.
BRB Modular Pty Ltd (BRB) engaged AWX Constructions Pty Ltd
(AWX) to construct a camp and accommodation
village at an LNG processing facility.
AWX was entitled to make a progress claim on the 28th day of
each month, subject to conditions in the contract. One condition
required AWX to sign a statutory declaration in the following form:
"to the best of my knowledge, all sub-contractors and
suppliers who have at any time been employed by [AWX] for work
under the Subcontract have as at the date of this declaration been
paid all moneys due and payable to them in respect of their
employment in relation to that work."
AWX submitted a payment claim under the contract and signed a
statutory declaration, but the wording was qualified by the
following words "other than those owed variations, payable
to the head contractor."
BRB contended that the pre-condition for making a payment claim
had not been complied with, and therefore the payment claim was not
valid under the Building and Construction Industry Payments Act
2004 (Qld) (Act).
The matter proceeded to adjudication. The adjudicator determined
the contractual precondition for a statutory declaration was void
because of section 99 of the Act, which provides:
section 99(1): "the provisions of the Act have effect
despite any provision to the contrary in any contract, agreement or
section 99(2): "contractual provisions are void to the
extent they are contrary to the Act or exclude, modify, restrict or
otherwise change the effect of a provision of the
BRB applied to the Supreme Court seeking a declaration that the
adjudication determination was void for jurisdictional error, and
an injunction restraining AWX from giving effect to it.
Applegarth J found that:
the contractual requirement to make a statutory declaration
impedes rather than facilitates the object of the Act,31 which is
to ensure cash-flow between the claimant and the other
although the condition may encourage the payment of third
parties, third parties are not the primary beneficiaries of the
Act's provisions, and the Act does not purport to regulate
relations between a contractor and third parties;33
there is a risk that an insolvent company that receives a
progress payment may not be able to satisfy its creditors, but the
Act shifts the risk of insolvency to the
the condition was not unduly onerous,35 but the consequences of
non-compliance were disproportionate and extreme;36
as the subject matter of the statutory declaration did not
relate directly to the proposed payment claim,37 the
condition had no real utility in advancing the purpose of the
the condition impeded payment to which AWX would otherwise have
been statutorily entitled, without any corresponding benefit,39
thereby excluding, modifying, restricting or otherwise changing the
effect of the Act;40 and
this meant the condition was void under section 99 to the
extent it affected rights and liabilities under the
Applegarth J concluded that the adjudicator had jurisdiction to
determine AWX's payment claim.42 The contractual
precondition BRB relied on to deny AWX a progress payment could not
prevent AWX from making its payment claim.43
31 At  32 At  33 At  34 At  35 At  36 At  37 At  38 At 39 At  40 At  41 At  42 At  43 At 
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about your specific circumstances.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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