The implications of a recent Brisbane District Court decision in
J Hutchinson Pty Ltd v Thunder Investments Pty Ltd reminds us of
the draconian effect of timeframes under the Building and
Construction Industry Payments Act 2004 (Qld).
The message of this case is clear – the consequences
of failing to meet payment timeframes under the Act are dire, and
construction industry participants should become very familiar with
the payment timeframes stipulated in the Act.
Contractor, J Hutchinson Pty Ltd entered into an oral agreement
with Thunder Investments Pty Ltd whereby Hutchinson was to
construct a building in Toowoomba. On 12 February 2009, Hutchinson
served a payment claim upon Thunder Investments by way of mail,
facsimile and email. It was not the service of this payment claim
that was in question, but the form of the payment claim that is
required under the Act.
The Act provides that a payment claim should identify:
the construction work to which the payment claim relates;
the amount that the claimant is claiming to be payable;
that it is made pursuant to the Act.
Hutchinson brought an action under the Act for recovery of the
statutory debt owed to them under the payment claim. Thunder
Investments argued against summary judgment, relying on three
The time when the payment claim was made.
That the payment claim was not valid because it failed to
properly identify the construction work, or related goods and
services to which the claim related.
That Hutchinson was estopped from relying upon the absence of a
payment schedule due to the course of dealing between the
The bulk of the argument in this matter was that the payment
claim was not valid. His Honour found that although the documents
were 'relatively terse', they were sufficient to identify
the construction work to which the payment claim related, in that
they made specific reference to the project name, the project
number, the amount claimed, and the fact that the payment claim was
made pursuant to the Act. This was sufficient for His Honour to
grant summary judgment to Hutchinson for the amount sought, being
His Honour also noted in his reasoning for granting summary
judgment, that in the event that Thunder Investments did wish to
dispute its obligation to pay the amount claimed in the payment
claim, it should have, within 10 days, resisted payment by
responding with a payment schedule pursuant to s18 of the Act.
Under this section, if the recipient proposes to pay anything less
than the amount claimed, the amount that is proposed to be paid as
well as reasons for the reduction in the amount should be included
in the schedule.
Section 19 of the Act outlines the consequences for a principal
of not delivering a payment schedule within the timeframe
stipulated under the Act. Notably, the principal immediately
becomes liable to pay the amount claimed, and the claimant is
entitled to recover that amount as a statutory debt. Most
significantly, in circumstances where the claimant brings
proceedings, s19 (4) will prevent the respondent or principal from
raising any defence in relation to matters arising under the
This decision hammers home the dire consequences of failing to
meet the rigid timeframes under the Act. The Act has become one of
the most critical tools for construction industry participants to
ensure that payment is made under a construction contract. The
Hutchinson matter clearly demonstrates how easily and quickly a
valid payment claim can be recovered under the Act.
Participants in the construction industry should ensure that
they are well informed of the timeframes stipulated in the Act in
relation to payment claims and payment schedules. Without a
thorough knowledge of the Act, you run the risk of being
'thunderstruck' as was the case for Thunder
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