To succeed with a claim for payment, the most critical thing a contractor must prove is that their work was requested. The request for a contractor’s work can be made expressly or the request can be implied from the actions of the parties and the circumstances of the case. However, absent any request for a contractor’s work, they have no claim; the law will not impose an obligation to pay to pay for work that was not requested.

A request for a contractor’s work may take the form of a contract. If so, the contractor’s entitlement to payment for their work is whatever the contract says it is. In other words, when the parties have agreed that what is payable to the contractor is X, what is payable to the contractor is X (see Thompson Residential Pty Ltd v. Hart & Anor [2014] QDC 132).

If the request for a contractor’s work takes the form of a contract, the contractor takes the risk that they might not be paid by the party with whom they entered the contract; the contractor is not entitled to payment from anyone else who might receive the benefit of work carried out under a contract (see Lumbers v W Cook Builders Pty Ltd (in liquidation) (2008) 232 CLR 635). The usual way to gain contractual protection from the risk of non-payment is to have clauses giving contractors some form of security or requiring others to guarantee or indemnify the liability to pay. However, this protection is not available in relation to domestic building work; a domestic building contract cannot give the contractor a security interest in the land of a resident owner, and it is an offence for a contractor to knowingly lodge a caveat claiming an interest in the land of a resident building owner (see section 43 of schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld)).

If the request for a contractor’s work does not take the form of a contract, or the contract is frustrated, avoided or unenforceable, the contractor might have an entitlement to claim restitution for the reasonable value of their work, confined as to quantum by any agreement as to price (see Mann v Paterson Constructions Pty Limited (2019) 267 CLR 560). Claims for work done at the request of another merely require that the work be done at the other party’s request, either express or implied (see Lumbers v W Cook Builders Pty Ltd (in liquidation) (2008) 232 CLR 635 at 666). Of course, a clear written express request is preferable. Where the contractor’s claim is for restitution for work done at the request of another, it is not open as a matter of law for the recipient to contend by way of defence that no “benefit” was conferred on them (see SunWater Ltd v Drake Coal Pty Ltd [2017] 2 Qd R 109).

The second most critical thing a contractor must prove to succeed with a claim for payment is that the work was performed. Records should be kept which identifies the construction work or related goods and services performed between each date on which a claim for a progress payment may be made. Those records should identify where the work was performed and by whom. Those records should describe the work performed using words sufficient to enable the recipient of a payment claim to understand the basis for the claim on the face of the payment claim without reference to any other documents (see Denbrook Constructions Pty Ltd v CBO Developments Pty Ltd [2022] QDC 184). Date-stamped photographs can obviously assist the identification of what work was performed and when.

Head contractors are commonly contractually required to provide documentary evidence that they have paid all their workers, subcontractors, and suppliers, failing which payment can be withheld from them. For head contractors, it is an offence punishable by a maximum fine of $14,375 for an individual and $71,875 for a company to make a payment claim without accompanying that payment claim with a supporting statement either declaring that all subcontractors have been paid in full or stating (among other things) which subcontractors have not been paid and why.

Obviously, that documentary evidence must also be true; knowingly signing a false statutory declaration is an offence punishable by up to 3 years imprisonment, and the person making the declaration can be held personally liable to repay the entire amount paid to the contractor in reliance on the declaration (see Robinson v 470 St Kilda Road Pty Ltd [2018] FCAFC 84). It is also an offence for a contractor under a domestic building contract to claim an amount, other than a deposit, unless the amount claimed is directly related to the progress of their work and proportionate to the value of that work, or less (see section 34 of schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld)).

There are two (2) ways a contract can give a contractor an entitlement to payment for the costs they incur in carrying out the work. The first way is as part of the contractor’s original contractual entitlement. For example, the contract might provide that the contractor is entitled to an amount calculated by reference to the costs they incur plus a margin equal to those costs multiplied by a percentage. Contractors might be concerned about revealing their margin. However, this is better protection against costs-escalation than a substantial margin which is extinguished by unexpected costs.

The second way a contract can give a contractor an entitlement to payment for the costs they incur in carrying out the work is where the entitlement is not part of the contractor’s original contractual entitlement, but instead triggered by something which happens after the entry into the contract. For example, a compensable cause of delay might arise, or the superintendent might direct a variation requiring additional work to be performed, each of which might trigger an entitlement to additional costs. Parties might define an event which causes the contractor to incur additional costs as being something like a compensable cause or a deemed variation, thereby utilising pre-existing contractual provisions regarding the assessment and quantification of an entitlement to additional costs. However, this has the potential to create uncertainty and lead to disputes, which might have been avoided had the costs been included in the contractor’s original contractual entitlement.

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