Payment claim relying on numerous contracts invalidates BCIPA adjudication decision

The recent Supreme Court of Queensland case of Matrix Projects (Qld) Pty Ltd v Luscombe has seen yet another adjudicator’s decision under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) successfully challenged.

Facts

Matrix Projects (Qld) Pty Ltd engaged Luscombe Builders to carry out construction work to assist flood victims to rebuild homes after the January 2011 floods in south-east Queensland.

The parties signed a document described as a ‘Period Subcontract’ by which Luscombe Builders agreed ‘to perform and complete … Works yet to be agreed’ for a period of 12 months. Works under this document were performed by Luscombe after Luscombe received and accepted a written purchase order request from Matrix.

Separately, Luscombe performed works for Matrix pursuant to verbal agreements (which it referred to as ‘do and charge’ work). There were no written purchase orders issued for ‘do and charge’ jobs.

Luscombe served a payment claim under the BCIPA on Matrix claiming amounts owing for works performed on 14 separate properties pursuant to the ‘Period Subcontract’ and the ‘do and charge’ arrangement (and one further arrangement – although the claim relating to that was later abandoned).

Matrix disputed the payment claim. The claim progressed to adjudication with the adjudicator determining that Matrix owed Luscombe over $400,000 for the works it had performed under the various arrangements.

Matrix then sought to challenge the adjudicator’s decision in the Supreme Court of Queensland on a number of grounds. One of the grounds of challenge was that the payment claim could not relate to a number of contracts or arrangements.

Decision

The Court decided that the adjudicator‘s decision was void on several grounds, including because the payment claim covered more than one contract or arrangement.

The fact that Luscombe relied on a number of contracts to support the amounts claimed in the one payment claim was fatal to the validity of the claim.

The Court declared the adjudicator’s decision void and Luscombe was restrained by the Court from seeking an adjudication certificate.

Implications

The construction industry frequently involves participants who have more than one arrangement or relationship with each other – whether that be on a particular construction project or more generally.

The message from this case is that when preparing or seeking to challenge payment claims under BCIPA you need to specifically consider whether amounts being claimed relate to more than one contract. If the claim includes amounts relating to more than one contract, it will be open to challenge. In such cases, claimants may wish to consider issuing separate claims for each specific contract.

If you would like more information on these issues, please contact Lisa Valentine or Rocco Russo on +61 7 3231 2444.