On 17 December 2018, the Building and Construction Industry Payments Act 2004 (Qld) (“the BCIPA”) was replaced by Chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017 (“the BIFSOP”). Payment claims take a slightly different form under the BIFSOP, with very significant consequences.
New risks when serving claims for payment
Under the BCIPA, payment claims had to state that they were made under the Act. Without that statement, the claim was not a payment claim under the Act. This gave builders an option: they could intentionally omit the statement from their invoices, and claim payment without triggering the operation of the Act.
This requirement does not exist in the BIFSOP. Any claim for payment for construction work, or related goods and services, under a construction contract can be a payment claim under the new Act.
Accordingly, unless a builder’s invoice bears a statement that it is not made under the new Act (which would be an unusual thing to see), the operation of the new Act can be unintentionally triggered.
This creates risks, which parties to construction contracts might not be aware of.
For recipients of payment claims under the BIFSOP, by failing to respond in time, they both commit an offence and become liable to pay the amount claimed. Rather than face such consequences, they might instead make an application to Court for an order declaring the payment claim void for not having a reference date to attach to, or not identifying the construction work to which the claim relates in a reasonably comprehensible way, or claiming an amount calculated (in part) on amounts previously claimed and unpaid.
Accordingly, builders risk finding themselves on the receiving end of such an application whenever they serve any claim for payment for construction work, or related goods and services, under a construction contract, even if they did not realise they were triggering the operation of the BIFSOP.
Builders should educate their accounts departments on the operation of the BIFSOP. The deadlines under the Act are strict and cannot be extended for any reason. Our team has extensive experience in building and construction matters and is ready and able to assist.