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BIFA Refresher Part 3 – Making a payment claim

In our earlier blog articles we have talked about key differences between BCIPA and BIFA and your entitlement to claim a progress payment – but now we are starting to get into the nitty gritty side of things –  what to do when a party (called the Claimant) is entitled to claim a progress payment under the BIFA and how to make sure it is a valid payment claim.

Section 68 of the BIFA defines a payment claim – in summary, for a payment claim to be valid it needs to tick the following boxes.

  1. be in writing.
  2. identify the construction work or related goods and services which the progress payment relates to in accordance with the BIFA.
    • this should not only include hours worked and amount payable but also set out all the work that has been completed and is being claimed for the particular time frame.
    • The test for whether the level of identification is enough is an objective one but is considered in the context of the background knowledge of each of the parties, including their past dealings and exchanges of documentation. The detail in the identification must enable the recipient to understand the basis of the claim and ascertain with sufficient certainty the work to which the claim relates, so it is able to provide a meaningful payment schedule.
    • It has been held that this is not intended to be an onerous task that requires particularity or precision, but it does require some description which identifies the work done which is reasonably comprehensible to the recipient.[1]  In the same decision, it was held that a trade breakdown with a percentage claimed may not be sufficient if the specific items of work performed for a particular claim is not described or the nature of the work which is included in any particular trade category is unclear.
  1. clearly state the amount of the progress payment that the claimant claims to be payable (the claimed amount).
  2. request payment of the claimed amount in accordance with section 68(1)(c) of the BIFA.
    • BIFA states that it is sufficient for the payment claim use the words “tax invoice” to satisfy this requirement.
  1. value of the construction work and related goods and services claimed in the payment claim either:
    1. in accordance with the contract; or
    2. in accordance with section 72 of the BIFA
  1. has a reference date in accordance with section 75(4) of the BIFA.
    • For more information about reference dates, please have a look at our article on Entitlement to claim a progress payment.
  1. served from (on or after) the reference date.
  2. If you have multiple contracts with a single respondent, each payment claim must be for only one individual contract and be the only payment claim served for any one reference date.
  3. only claim payment for work carried out and completed or related goods and services supplied up to the reference date (and not include work carried out after that reference date).
  4. be served within the longest of:

For interim payment claims (including a claim for practical completion or following termination of a contract):

      1. the period worked out under the construction contract; or
      2. within 6 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied;

For final payment claims:

      1. the period worked out under the construction contract;
      2. 28 days after the end of the last defects liability period; or
      3. within 6 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied?
  1. be served on the respondent (as defined in section 75(1) of BIFA), being the party liable to make payment under the relevant construction contract.
    • It is important to note that where a contract is administered by a superintendent, it is usually not enough to send the payment claim to the superintendent as may be specified for progress claims under the contract, it must also be sent to the principal/head contractor.
  1. be served in accordance with the Contract, section 102 of the BIFA and/or section 39 of the Acts Interpretation Act 1954 (Qld) (AIA).
    • BIFA allows for service in accordance with any provision in a contract but specifically states that it in addition to, and does not limit or exclude, the AIA, or the provisions of any other law about the giving of notices.  Section 39 of the Acts Interpretation Act 1954 (Qld) specifies methods of service for individual and for companies or bodies corporate.  For individuals service occurs when it is:
      1. delivered to the person personally; or
      2. left at, or by sent by post, telex, facsimile or similar facility to, the address of the place of residence or business of the person last known to the person serving the document; or
      3. as otherwise allowed for by the operation of another law or as authorised by a court or tribunal.
    • However, if the service is on a company or a body corporate it must be done:
      1. by leaving it at, or sending it by post, telex, facsimile or similar facility to, the head office, a registered office or a principal office of the body corporate;
      2. as otherwise allowed for by the operation of another law (which would include section 109X of the Corporation Act 2002 (Cth)) or as authorised by a court or tribunal.

It is important to note that, although commonly used by the parties, neither BIFA nor the AIA specify service by email.  However, email service is contemplated by the Electronic Transactions (Queensland) Act 2001 (Qld) and court decisions in relation to the former BCIPA regime (which had an equivalent provision) has found that service is deemed to have occurred when an email was capable of retrieval from the addressee’s email system.  The difficulty with email service is usually proving that service has occurred.

If you have any concerns about preparing a claim for payment under BIFA, feel free to contact us to get in touch

[1] KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178 at [51] and [52].

Disclaimer
The content of this blog article is intended to provide general information as a summary of the subject matter, which is current at the time of publication. It is intended for information purposes only and should not be regarded as advice. Specialist advice should be obtained about your specific circumstances before taking action on any issue dealt with in this publication.