Payment schedules - Building and Construction Industry Payments Act 2004 – section 19(a)(2)(i)
A party must strictly adhere to the Building and Construction Industry Payments Act 2004 (Qld) (Act) to ensure its payment schedule is valid.
Veolia Energy Technical Services Pty Ltd (applicant) performed works in the refurbishment of the Hayman Island Resort for FKP Hayman Pty Ltd (respondent). The applicant applied to the court under section 19(2)(a)(i) of the Act for recovery of the unpaid portions of amounts withheld by the respondent in seven payment claims:
- September 2013: The applicant commenced work on the Lagoon Wing on 23 September 2013. In relation to two payment claims, the respondent sent a single response which did not expressly identify which payments were being withheld. The applicant contended that the respondent had failed to serve a valid payment schedule under section 18 of the Act.
- November 2013: On 20 November 2013, the parties executed a written subcontract for the works on the Lagoon Wing which purported to prevent the accrual of reference dates. The applicant served two payment claims. The respondent did not serve a payment schedule in response. The respondent argued the applicant's claims were invalid because only one claim could be served per reference date.
- March 2014: A separate construction contract for the supply of goods for the Pool Wing between the parties commenced on 20 March 2014 and continued into April 2014. The applicant served payment claims on 10 April 2014 and 23 April 2014 but resent the latter on 7 May 2014. The respondent argued that only one reference date was available and served a response in July 2014.
- February 2014: Another engagement for the Pool Wing occurred in February 2014. Whilst its payment claim was dated 7 July 2014, the applicant produced evidence that it was served at 5.13pm on 17 July 2014 and argued that the respondent's document served earlier on the same day at 2.32pm was not a valid payment schedule.
The court held in favour of the applicant. Clare SC DCJ held that:
- September 2013: whilst the Act does not preclude a single payment schedule from responding to multiple payment claims, the respondent had failed to provide sufficient detail for withholding the applicant's claimed amounts and breached section 19 of the Act;
- November 2013: the Act allows reference dates to accrue, that the two payment claims were validly served because the claims had been issued on two different accrued reference dates and that the provisions of the subcontract preventing the accrual of reference dates were void under section 99 of the Act;
- March 2014: two reference dates had accrued under the Act and the payment claims related correctly to the reference dates of 31 March 2014 and 30 April 2014 respectively but the respondent's July 2014 response was too late to qualify as a 'payment schedule'; and
- February 2014: a payment schedule under section 18 of the Act is the 'reply' to a payment claim, which cannot validly occur if a payment schedule is issued prior to a payment claim being served.