The recent Supreme Court decision in ACP Properties (Townsville) Pty Ltd v Rodrigues Construction Group Pty Ltd & Anor [2021] QSC 45 considers the level of detail required for a valid payment schedule. The Court confirmed this should not be approached from an unduly critical viewpoint, finding that two conversational emails issued by a principal were valid payment schedules.
The Court was also required to consider whether the contractor's invoice contained the necessary detail to make it a valid payment claim under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) ('BIFA').
Facts
ACP was the owner of Townsville Transit Centre. Rodrigues Construction Group ('RCG') was engaged to undertake refurbishing work on the building. RCG issued ACP an invoice claiming approximately $237,000. The invoice did not contain a great deal of detail but was accompanied by a series of annexures. Those annexures included employee timesheets and supplier invoices.
The employee timesheets stated the times when the employees were engaged but did not specify the work undertaken by them or where they worked within the building. The supplier invoices varied in detail, however, some did not identify the work or materials supplied or where within the building the construction work was carried out.
ACP issued two emails in response to RCG's invoice. In those emails, it alleged that the contract price had been capped at $2.7 million plus GST (excluding variations, which were yet to be assessed by a quantity surveyor). ACP contended that it had already paid $100,000 more than the capped price. It indicated that an initial assessment by the quantity surveyor suggested that the assessed value of the variations would be less than $100,000.
RCG obtained an adjudication decision in its favour, with the adjudicator refusing to consider ACP's emails on the basis that they did not constitute payment schedules under the BIFA.
Findings
Payment Claim
ACP asserted that RDG's invoice was not a valid payment claim under the BIFA, arguing the document had failed to identify the construction work or related goods and services to which the progress payment related.
ACP complained that the information provided did not allow it to know, with precision, which parts of the project employees were working on during the timeframes claimed for. The Court observed the modest sum being claimed for this component (less than $4000) and, as a result, decided that merely detailing the days worked, employees working and their hours worked each day was sufficient to reasonably identify the basis of the claim. Arguments raised by ACP regarding the lack of detail in various supplier invoices also failed to invalidate the purported payment claim.
The Court found that the invoice issued by RDG was sufficiently detailed to be a payment claim under the BIFA.
Payment Schedule
RDG asserted that ACP's emails did not constitute payment schedules under the BIFA, arguing that the emails failed to state the amount of the payment (if any) that ACP proposed to make.
The Court had little trouble in deciding that each of the emails was a payment schedule. They did, after all, make it very clear that ACP considered no amount was payable under the contract and that ACP proposed to pay no amount. The reason for that position had been clearly conveyed by the simple explanation that the construction costs had been capped and the payments to date exceeded the cap.
Because the adjudicator had refused to consider the payment schedules in deciding the adjudication application, the resulting decision was affected by jurisdictional error. The Court declared the decision void and of no effect
Lessons
- Even experienced adjudicators can fall into jurisdictional error, rendering the resulting decision void.
- Despite recent decisions concerning the level of detail required for a valid payment claim, the courts remain reluctant to analyse payment claims in an unduly technical manner. This decision would suggest that may especially be the case when the amount being claimed is relatively modest.
- Even a conversational email can, in certain circumstances, be a payment schedule – so long as it meets the requirements specified under section 69 of the BIFA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
