Builders Beware! Ignore sub-contractor payment claims at your peril!

Unpaid sub-contractors who have performed building work may issue a payment claim upon a builder under the provisions of the Building and Constructions Industry Payments Act (BCIPA).[1] If the receiver of a payment claim does not respond within ten business days with a payment schedule, the issuer of the payment claim is entitled to a judgment for the sum as a statutory debt.


Payment claim – strict compliance is necessary

The statutory regime under the Act is strict. Its object is to ensure that a person is entitled to receive, and is able to recover, progress payments if the person undertakes to carry out construction work. A valid payment claim is a pre-condition to the entitlement to judgment. Formal requirements of the claim are that it must identify the construction work and related goods and services to which the claim relates; state the amount payable; and state that the claim is made under the BCIPA. It must be served as a formal notice on the other party’s registered address. The claim may look like a standard invoice but it will see you in Court if you don’t address the payment claim straight away.

Disputed claim – what to do

Do not ignore a payment claim. Often the amount claimed may be for unauthorised variations or retention amounts not yet due to be paid to the subcontractor. These facts must be detailed in the schedule that is sent in reply to the payment claim. If you don’t put these details in a payment schedule and reply within the ten business days you are precluded from bringing any counterclaim against the person seeking the money from you, and you cannot raise a defence in relation to matters under the building contract.

If you are issuing a payment claim, make sure that you were licensed at the time of doing the work. We often see works undertaken while the licence was suspended for non-provision of financial details to the QBSA. Not only will this invalidate your claim but will get you into difficulties with the QBSA.

Who can help

As lawyers experienced in building and construction disputes, redchip lawyers can provide comprehensive advice in relation to payment claims and schedules.

For more information

Contact Trent Akhurst of Redchip on +617 3223 6100 or trenta@redchip.com.au.


[1] 2004 (Qld).

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