In Protectavale Pty Ltd v. K2K Pty Ltd,  FCA 1248 the
Federal Court of Australia considered the Victorian payment
legislation and the provision of the Victorian Act which is
equivalent to section 17 (2) of the Queensland Building and
Construction Industry Payments Act 2004 which requires that a
payment claim must "identify the construction work... to which
the progress payment relates".
In Protectavale the Claimant issued a payment claim for the
amount of $635,448.06 which stated that the "construction work
in respect of which this Payment Claim is made and the amount
claimed... is listed below in the table (and attached Schedules).
The table provided:
Variations (See the attached Schedule 1)
Prolongation claim (see the attached Schedule 2)
Adjusted Contract Sum
Retention (0125% of the Contract Sum - $6,300,000...)
Claimed amount... (Adjusted Contract Sum –
Claimed amount (incl GST)
The two schedules attached to the payment claim provided details
of the variations and prolongation claims.
The problem with the payment claim was that the invoice did not
identify any of the work previously completed and paid for and the
work (apart from the variations) to which the invoice relates. The
Court found that of the amount claimed there was no "breakdown
or explanation of the work to which the claimed amount of
$215,850.00 relates" (at 14). The sum of $215,850.00 was
calculated by taking the contract sum of $6,295,000.00 and
deducting the payment received of $6,000,400.00 and retentions of
$78,750.00, leaving a balance of $215,850.00 plus GST.
Certainly, the Court considered that "payment claims are
usually given and received by parties experienced in the building
industry who are familiar with the particular construction
contract, the history of the project and any issues which may have
arisen between them regarding payment..." (Multiplex
Constructions  NSWSC 1140 at 76). But in this case, it was
simply impossible to determine the basis of the claim for
The Court confirmed that a Claimant must identify the
construction work that is the subject of the payment claim. By
simply issuing a payment claim based upon the original contract sum
less payments received, the Claimant failed to satisfy the
provisions of the payment legislation.
Finally, it is also important to note that Protectavale also
considered the timing of the delivery of payment claims. Although
the payment claim did not state that it was a "final payment
claim" it did appear to have the characteristics of a final
payment claim. The payment claim was issued before the expiration
of the defects liability period and was therefore void. The lesson
to be learnt for Claimants is to ensure that the contractual
process regarding issuing of final payment claims is followed
(which in most cases would provide for the final payment claim to
be issued following the expiration of the defects liability
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