A couple of recent decisions give contractors some more freedom when it comes to Payment Claims by making it clear they can be withdrawn.
One of the restrictions under the BCIPA is that you can only send one (1) Payment Claim per reference date. Under the Act if your contract allows you to make a progress claim on a particular date (eg the 25th day of the month) that is the reference date to be used. If your contract is silent on the issue of the timing of progress claims, the reference date is the last day of each month.
However, many people issue a Payment Claim and then decide to issue a new ‘revised’ one, usually to increase it, resulting in arguments as to the validity of that second Payment Claim.
In recent cases, the Courts have recognised that you can withdraw a Payment Claim.
In the first case a Payment Claim was issued and an offer made by the builder to pay a lesser sum than that being claimed. The subcontractor then issued a new Payment Claim for the lesser amount.
The Court held that the second Payment Claim was valid because it considered that by issuing the second Payment Claim for the amount offered by the Builder, the subcontractor had impliedly withdrawn the first claim.
Furthermore, the Courts have now recognised that a Payment Claim can be withdrawn so long as it is done so unambiguously. Therefore if you wish to issue a new Payment Claim you must write to the recipient and clearly state that you are withdrawing that specific Payment Claim. Once you have done that, it is suggested that you issue the new Payment Claim on the next day
The first case scenario is quite a common one. However it should be remembered that if you are sent a Payment Schedule in response to your Payment Claim for a lesser amount which you are happy to accept, you do not need to issue a new Payment Claim for that lesser amount. Of course, you may wish to issue a new Payment Claim in circumstances where you reach a settlement.
This is relevant for contractors throughout Queensland, New South Wales, Victoria, Tasmania & South Australia. Western Australia and Northern Territory however operate on a different model.