Insight or analysis of the law or a contractual term

Question 1

What are five ways to attack a payment claim?

Answer 1

1. Payment claim invalid because it does not identify the works carried out, contrary to s 68 BIF Act
2. Payment claim is invalid because it includes claims for payment under multiple construction contracts contrary to s 75(1) BIF Act
3. Payment claim has not been made in respect of a reference date, contrary to s 70 BIF Act
4. Payment claim is invalid because it includes unlicensed work
5. Payment claim has not been made within the timeframes under s 75(2)(b) & s 75(3) BIF Act.

Question 2

What is the common law view if a payment claim is not served in accordance with the contract requirements but payment claim comes to attention of other party?

Answer 2

Deemed to be validly served if the payment claim comes to the attention of the other party: Eriksson v Whalley [1971] 1 NSWLR 397, FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340

In Pelligra Build Pty Ltd v Australian Crane & Machinery Pty Ltd [2020] VCC 545, it was held that service of a payment claim via email was valid despite the method of service being expressly unauthorised under the contract.

Question 3

Does a Principal have an automatic right to instruct variations under common law?

Answer 3

No. The Contract must specifically empower the Principal to instruct variations.
If it does not, the Subcontractor can refuse to perform the variation and insist on performing original scope of works.

Even where there is an express power to order a variation, it must not fundamentally change the nature of the contract.

In Ettridge v The Vermin Board of the District of Murat Bay [1928] SASR 124, Contractor engaged to construct a fence along a railway. The Principal instructed contractor to deviate from original rail line. Contractor refused and abandoned work. Court held that the Principal did not have contractual power to instruct variation and therefore, by insisting Contractor depart from original line, the Principal had repudiated the Contract.
= Contractor entitled to terminate.

Question 4

Can you issue one payment claim for multiple purchase orders?

What is the leading case authority ?

Answer 4

No because the claim is not made in respect of one claim under one construction contract. Instead the claim is made in relation to multiple construction contracts: Class Electrical Services v Go Electrical [2013] NSWSC 363

A payment claim must relate to only one construction contract: section 75, 70 BIF Act QLD; Matrix Projects (Qld) Pty Ltd v Luscombe [2013] QSC

Question 5

Q:

What are each of these emails missing to be a bare-minimum payment schedule, and what are authorities for each?

1) “We do not intend to pay your payment claim. Let’s discuss it at our next meeting.”

2) “I cannot pay your payment claim because of all the defective works I’ve been sending you.”

3) “No payment for above invoices until all work in the attached documents has been completed.”

Answer 5

1) Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333

A payment schedule must state the reasons why payment is withheld. s69(c) BIF Act.

2) Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171

For a document to be incorporated into a payment schedule by reference, it must be identified with sufficient particularity. *Be careful, as it is not a very high bar to incorporate a document by reference.

3) Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211

A statement that a claim will be paid at some unspecified time in the future is not a statement that the person does not intend to pay at all, so does not state an amount for payment the responded intends to make. s69(b) BIF Act.