Building and Construction Industry Payments Act 2004 (Qld) (Act) – sections 17 and 21 – whether the payment claim was valid – whether the adjudicator had jurisdiction – offsetting claim
Separate invoices served collectively with a covering email may constitute one payment claim.
A future right to claim liquidated damages is not an 'offsetting claim' within the meaning of section 459H of the Corporations Act 2001 (Cth) and therefore cannot be relied upon to offset a creditor's statutory demand for payment based upon an adjudication certificate.
Mortimer Constructions Pty Ltd (first respondent) was sub-contracted by Camporeale Holdings Pty Ltd (applicant) to perform construction work at Proserpine State High School. The first respondent issued a payment claim to the applicant on 25 September 2014 in the form of a covering email that was not endorsed under the Act and which referenced five attachments. Four of the five attachments were tax invoices which were endorsed under the Act and identified the work as relating to 'The Project at Proserpine State High School'. The applicant did not pay the payment claim, contending that it did not comply with the requirements of the Act.
The first respondent applied for adjudication pursuant to section 21 of the Act. Although the adjudicator (second respondent) found in favour of the first respondent, the payment claim went unpaid. Instead of filing the adjudication certificate that was obtained as a judgment, the first respondent relied on the certificate in issuing a creditor's statutory demand on 27 February 2015.
The applicant contended that:
- the adjudication decision was void or voidable for want of jurisdiction as multiple payment claims had been made in respect of a single reference date, contrary to section 17(4) of the Act; or
- alternatively, it had an 'offsetting claim' within the meaning of section 459H of the Corporations Act 2001 (Cth) for the cost of rectification of the works and for liquidated damages incurred due to the delay occasioned by the rectification work.
Henry J held that the payment claim was valid; it was 'readily discernible' that the covering email and the attached tax invoices (the combined total of which amounted to the progress payment claimed) amounted to service of one payment claim. In reaching this decision, his Honour relied on Tailored Projects Pty Ltd v Jedfire Pty Ltd (2009) 2 Qd R 171 and the consistent New South Wales line of authority.
His Honour also held that there was sufficient evidence of an offsetting claim but only in relation to the rectification works. To this end, the applicant only had (at best) a future claim for liquidated damages, which did not meet the temporal requirement of the definition of an 'offsetting claim'.