Wednesday, December 8, 2010

Queensland Supreme Court fixes identical payment claims

One of the main reasons given by some consultants in Queensland for not using the legislated payment process as the preferred business as usual process was the risk that a claimant may not be able to serve a subsequent payment claim at a later date if the first claim had a simple procedural error, or the claimant simply allowed the due date to pass without taking action to dispute or recover the progress claim.  
Claimants were advised to get into trouble first and then seek advice about using the Act, on the grounds that they might lose their entitlement to claim later.  It has the effect of avoiding the intention of the Act to encourage a transparent, logical payment process as the industry's business as usual process.
The Queensland Supreme Court has clarified the situation of serving later identical payment claims under the Building and Construction Industry Payments Act 2004 (Qld) in a recent decision, Spankie & Ors v James Trowse Constructions Pty Ltd & Ors [2010] QSC 336 (Spankie).
The Court in Spankie disagreed with earlier judgements and determined that an identical payment claim can be served from a later reference date. 
However this decision does not detract from the principle that a claimant cannot claim under the BCIPA an amount which has been the subject of an earlier valid adjudicator's decision.
The state of play (at least in Queensland) following Spankie is:
  1. A payment claim will not be invalid because it is identical to an earlier payment claim.
  2. A claimant is not entitled to claim under the BCIPA an amount which has been the subject of an earlier valid adjudicator's decision.
This is an important clarification and a very wise interpretation of the Act. It will have the effect of:
  • Encouraging all parties to use the Act a the preferred business-as-usual payment process;
  • Allowing claimant's more time to negotiate disputed payments before forcing them into adjudication or other recovery mechanisms.
  • Taking out the main excuse for advising claimants to avoid using the process of the Act as it was intended.
Any minor inconvenience to respondents issuing similar payment schedules in subsequent months is well worth the benefit.

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