Thomson Geer’s Brisbane Construction Team recently acted for the successful party in a Supreme Court of Queensland proceeding which confirmed that a payment claim containing claims under two separate contracts will be void under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).
The decision of Ausipile Pty Ltd v Bothar Boring and Tunnelling (Australia) Pty Ltd  QSC 39 related to an originating application for summary judgment filed by Ausipile Pty Ltd (Ausipile) against our client Bothar Boring and Tunnelling (Australia) Pty Ltd (Bothar) to recover the amount of $761,296.75 claimed in a payment claim, for which no payment schedule was given in response.
Bothar was engaged to design and construct a concrete jacking pipe from the Gold Coast to South Stradbroke Island. Bothar subsequently engaged Ausipile as a subcontractor to design and construct a secant pile launch shaft to launch a tunnel boring machine.
For the works Ausipile was required to perform under the subcontract, Ausipile had initially used a crawler crane to lift the steel reinforcing cages off the piles. Following Ausipile completing its works under the subcontract, the parties entered into a separate hire agreement for the use of the crawler crane for the excavation of the launch shaft, which was work Bothar was required to perform under the head contract it had entered into.
Ausipile issued a payment claim to Bothar (Payment Claim 6), which claimed:
- unpaid amounts in relation to two previous payment claims; and
- additional amounts for hire of the crawler crane.
In accordance with section 78(2)(a) and section 100 of the BIF Act, Ausipile would be entitled to summary judgment given Bothar had failed to issue a payment schedule in response to Payment Claim 6, unless one of the defences advanced by Bothar were successful.
Bothar advanced the following defences:
- Ausipile engaged in misleading and deceptive conduct;
- Ausipile did not give a valid warning notice; and
- Payment Claim 6 concerned two separate contracts.
Whilst the first and second defences were unsuccessful, her Honour Justice Wilson agreed with Bothar’s submissions with respect to its third defence advanced, finding that Payment Claim 6 related to two separate and distinct contracts.
In this regard, Bothar submitted that Payment Claim 6 claimed for works under two separate and distinct contracts:
- the first, being the subcontract for the design and construction of the secant pile launch shaft; and
- the second, being the crawler crane hire agreement.
In agreeing with Bothar’s submissions, her Honour went on to confirm that the effect of a payment claim containing claims under two contracts was that the payment claim was void. Accordingly, Ausipile’s originating application for summary judgment was dismissed.
What does this mean?
The decision confirms that a payment claim containing two contracts is not a valid payment claim for the purposes of the BIF Act. A payment claim must only claim for works completed under the one contract that is the subject of the payment claim.
If you have any questions about this decision or the security of payment regime more broadly, please contact us below.
Andrew Kelly | Partner | +61 7 3338 7550 | [email protected]
Samuel Speechly | Lawyer | +61 7 3338 7529 | [email protected]