Under the provisions of the Building and Construction
Industry Payments Act 2004 (Qld), if a payment schedule is not
served in response to a payment claim within the time allowed, the
respondent will be precluded from bringing a defence - effectively
entitling the claimant to the full amount claimed.
Section 52 is fair play
It is now firmly established in Queensland that the BCIPA will
not prevent reliance on section 52 of the Trade Practices Act
1974 (Cth) (dealing with misleading and deceptive conduct)
where a payment schedule is not delivered in response to a payment
In 2009's landmark Queensland decision of Austruct Qld
Pty Ltd v Independent Pub Group Pty Ltd, the Supreme Court
opened the scope of defences available where a payment schedule has
not been served.
Recent goals kicked in Queensland
In Austruct, the architect appointed to the project was
led to believe that a bundle of documents received was an identical
copy of a separate bundle delivered to the company's registered
office in Sydney. It transpired that the architect was incorrect,
as there was a payment claim in the bundle of documents sent to
The architect had passed this misleading information on to a
representative of the respondent, who did not check the documents
containing the payment claim, and as a result, the respondent
failed to deliver a payment schedule within the prescribed
The Court ultimately found for the respondent and held that
"it would be improper to permit the applicant to take
advantage of the respondent's failure to deliver a payment
schedule in circumstances where that failure was brought about by
the applicant's misleading conduct".
There are other cases where arguments under section 52 of the
Trade Practices Act were successful. In Reed Constructions
(Qld) Pty Ltd v Martinek Holdings Pty Ltd, the applicant
(Reed) made representations in an informal agreement between the
parties that it would not serve a payment claim for a certain
period of time, while the parties underwent other joint venture
negotiations. In reliance on these representations, the respondent
(Martinek) did not make any payment for the amount claimed in a
payment claim issued by Reed, nor did it issue a payment schedule.
The Court held that there was an unspoken agreement between the
parties to suspend Reed's right to pursue a claim under the
BCIPA while the joint venture negotiations were underway, and this
was reinforced by Reed's actions, which amounted to misleading
and deceptive conduct. As such, the application was dismissed.
It's not going to be an easy game...
Don't be fooled into thinking that section 52 of the Trade
Practices Act is easy to satisfy. The hallmarks of a section 52
claim are onerous:
A corporation in trade or commerce must engage in conduct that
is misleading or deceptive or likely to mislead or deceive.
The other party must rely on the misleading or deceptive
conduct/information and suffer some form of detriment.
It is not enough to satisfy only some of these requirements, as
each factor is essential to a successful claim. Additionally,
ignorance of process by the other party will not constitute
misleading or deceptive conduct. For example, it is not the
responsibility of the claimant to bring to your attention that a
claim is made pursuant to the BCIPA.
In any event, we are seeing an increasing number of section 52
defences arising in response to applications to the court for
summary judgment. Although not all successful, the courts of
Queensland and New South Wales (see Bitannia Pty Ltd & Anor v
Parkline Constructions Pty Ltd) have both shown a willingness to
allow the remedies of the Trade Practices Act to apply even where
the BCIPA expressly prevents the respondent from raising a
If you have not delivered a payment schedule as a respondent,
all is not necessarily lost. You may have other options if the
claimant hasn't been upfront and honest in their dealings.
However, as a rule, it should be common practice to always check
the documents you are being sent and avoid accepting them on face
From a claimant's perspective, it is important that you
ensure any innocent steps taken to seek payment under the BCIPA
don't become something more, which could be construed as
misleading and deceptive conduct. Always be transparent in your
dealings with the BCIPA to avoid a defence of misleading and
deceptive conduct eliminating your entire claim.
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