Contractors take note: if you perform works for which you are not licensed, don't expect the Queensland security of payment legislation to respond.
In St Hilliers Property Pty Ltd v Pronto Solar Innovations Pty Ltd  QSC 164, the respondents (Pronto Solar Innovations Pty Ltd and Pronto Projects Pty Ltd) entered into subcontracts with St Hilliers to perform subcontract works relating to the construction of solar farms in central Queensland. Those subcontract works included pile driving and pre-drilling activities.
During the course of the project the respondents:
- purported to serve payment claims on St Hilliers under section 17 of the Building and Construction Industry Payments Act2004 (BCIPA); and
- on the basis of those payment claims, served a Form 1 Notice of Claim of Charge and a Form 2 Notice to Contractor under the Subcontractors’ Charges Act 1974 (SCA).
Neither of the respondents, however, held a licence to perform "building work" as defined in the Queensland Building and Construction Commission Act 1991 (QBCCA).
In the circumstances, the Court held as follows:
- Despite argument to the contrary by the respondents, the subcontracts did require the performance of “building work” under the QBCCA. While there was quite some discussion as to what properly constitutes "building work", the Court had no difficulty in holding that the phrase "goes beyond the traditionally understood meaning" and included the piling and drilling works in issue. Relevantly, the Court pointed to the fact that, not only are such works omitted from the categories of excluded works under the Queensland Building and Construction Commission Regulation 2003; rather, they are of a class of "building work" specifically required to be performed by a licensed contractor (refer to Part 32 of Schedule 2 to the Regulation, which identifies “Foundation work (piling and anchors)”).
- Section 42 of the QBCCA deprived the respondents of any entitlement to “monetary or other consideration” for the subcontract works performed. (Under section 42, a "person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class", further, a person who carries out work in contravention of that prohibition is not entitled to monetary or other consideration).
- By reason of section 42, absent an entitlement to payment under the subcontracts there were no payments that could be secured by a charge under the SCA.
- Similarly, an unlicensed contractor denied a payment entitlement under section 42 cannot be entitled to progress payments under the BCIPA.
Accordingly, the charges claimed by the respondents under the SCA were cancelled and the purported payment claims under the BCIPA were declared invalid and of no effect.