Recent BCIPA case underlines the need to remain aware of contract terms
MDL is currently working on behalf of a large pool contractor who subcontracted to a large Queensland-based building company.
The subcontract documents appeared standard at first. As part of the administration of that contract, a superintendent was appointed for the purposes of (partially) screening and processing payment claims made by all subcontractors.
However, shortly after the commencement of the pool works being constructed, the builder’s Management and Administration Team changed and effectively excluded the processing of payment claims from the superintendent.
Extension of time claims receive no response
The pool works continued to be performed and our client continued to deliver progress claims directly to the builder. For a while, all appeared well.
However, our client was delayed in proceeding with its subcontract works because the site was not ready for them to proceed with the next stage of those works. Our client submitted extension of time claims – however no response was ever provided by the builder for those extensions of time.
Our client continued to house and pay its employees in the region where the works were to be performed until such time as the builder was ready for our client to proceed with the works.
Consider suspension of works without an extension of time
Our client continued to proceed with the works. However, no extensions of time were granted – and ultimately the final payment claim was rejected. Our client failed to make an application to the QBCC for an adjudication pursuant to the Building Construction Industry Payments Act (BCIPA).
MDL advised our client that a further payment claim need to be issued in accordance with the subcontract, claiming for all variations and original scope of works and importantly, including a new reference date by which payment under the subcontract fell due.
By doing this, our client will effectively restart the clock on the time constraints imposed by the BCIPA and they will be able to now make an adjudication application and hopefully obtain an Adjudicator’s Certificate for the full amount of their claims.
Once our client obtains this Certificate it can be made a Judgment of the Court and enforced against the builder like any other Judgment.
Contact MDL for advice and assistance with the BCIPA
This case is a cautionary tale to subcontractors who effectively allow a builder to run unchecked against the terms of the contract.
Had the superintendent remained in his position, this dispute may well have been resolved by simply administering the dispute resolution processes that were available to the subcontractor within the terms of the subcontract.
If you have questions about your rights and responsibilities under the BCIPA, contact McCarthy Durie Lawyers on 3370 5100 or fill out the contact form here.