BIF Act Guide

Requirements of a payment claim

Construction contract

Pursuant to section 64 of the BIF Act, a "construction contract" is defined as:

The existence of a valid construction contract between the claimant and respondent is a basic and essential requirement for a valid adjudication decision. In Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421, Hodgson JA (with whom Mason P and Giles JA agreed) identified at 441 [53] the basic and essential requirements for a valid adjudication determination under the NSW Act, the first of which was:

This requirement applies equally under the BIF Act. In GCB Constructions Pty Ltd v SEQ Formwork Pty Ltd [2023] QSC 71, Burns J stated at [15]:

If there is no construction contract, the adjudicator has no jurisdiction and any purported adjudication decision will be void.

What is a "contract, agreement or other arrangement"?

The definition of "construction contract" includes three elements: a contract, an agreement, or an "other arrangement". The use of the expression "other arrangement" indicates that the legislature intended the definition to extend beyond formal contracts.

In Machkevitch v Andrew Building Constructions [2012] NSWSC 546, McDougall J considered the meaning of "other arrangement" in the context of the NSW Act (which uses the term "contract or other arrangement"). His Honour stated at [17]-[19]:

This reasoning was adopted and applied in Queensland in GCB Constructions Pty Ltd v SEQ Formwork Pty Ltd [2023] QSC 71.

Does an "other arrangement" need to be legally enforceable?

There has been some debate in the case law about whether an "other arrangement" must give rise to a legally binding obligation.

In Lendlease Engineering Pty Ltd v Timecon Pty Ltd [2019] NSWSC 685, Ball J held at [29]-[38] that for a construction contract to constitute an "other arrangement" under the NSW Act, it must give rise to a legally binding obligation (though the obligation need not be contractual in nature). However, this decision was distinguished on its facts in later NSW cases.

The earlier view - that an "other arrangement" need not be legally enforceable - was expressed by Nicholas J in Okaroo Pty Limited v Vos Construction and Joinery Pty Limited [2005] NSWSC 45. This approach was endorsed by McDougall J in Machkevitch v Andrew Building Constructions [2012] NSWSC 546 at [70]-[71]:

The position in Queensland appears to follow the earlier, more permissive approach.

What constitutes a sufficient "other arrangement"?

Even if an "other arrangement" need not be a legally enforceable contract, there are still requirements as to what will constitute a sufficient arrangement for the purposes of the BIF Act.

In GCB Constructions Pty Ltd v SEQ Formwork Pty Ltd [2023] QSC 71, Burns J comprehensively addressed this issue. His Honour stated at [18]:

In that case, the adjudicator had found that a "construction contract" arose from a March 2021 conversation between the parties about preliminary works, which was then "expanded over time". The adjudicator also stated he would have found an "other arrangement" because "a request for work was made, pricing and payment contemplated, and the work was performed". Burns J held this was insufficient. His Honour found at [23]-[25] that the evidence did not establish a sufficient arrangement because:

• The payment claim was primarily for the supply of material, but there was nothing in the March 2021 conversation regarding the supply of, or payment for, material. The claim for materials was "only unilateral".
• There was no specification of the rates to be charged for labour.
• Nothing was agreed about the time for performance of any of the work, the making of claims, the time for payment, retention money, or the transfer of ownership of materials.

His Honour concluded at [25]:

The practical effect of GCB Constructions is that an "other arrangement" must have sufficient detail and mutuality to allow for the making and valuation of payment claims under the Act. A mere request to do work, followed by performance, will not be enough if key terms (such as pricing, scope, or timing) remain unresolved.

Between the correct parties

For a valid construction contract to exist for the purposes of the BIF Act, the payment claim must be served by a party to the construction contract on another party to that contract. Issues can arise where the wrong entity is named, or where there is confusion about corporate structures.

In Ratcliffe v Horizon Glass & Aluminium Pty Ltd [2023] NSWSC 196, Rees J set aside an adjudication determination because there was no construction contract between the claimant and the respondent. The claimant had incorrectly named the individual director of the principal as the respondent to the payment claim, when the construction contract was in fact with the principal company (not the individual director).

Rees J referred at [37] to the summary by Brereton JA in Mills v Walsh [2022] NSWCA 255 at [73] on how the court should determine the parties to a construction contract:

Applying this test, Rees J held at [39]-[40] that on the balance of probabilities, the parties had intended that the principal company (and not the individual director) enter the construction contract with the claimant. Therefore, the adjudication determination was set aside as a construction contract did not exist between the claimant and the named respondent.

A similar issue arose in Justar Property Group Pty Ltd v Chase Building Group (Canberra) Pty Ltd [2020] ACTSC 231. In that case, the respondent contended it had never entered into a construction contract with the claimant, but rather that the contract was with a different company (Maxon Group Pty Ltd) which the respondent was associated with. Mossop J held at [52] that the adjudicator was entitled to accept there was some "other arrangement" between the claimant and respondent, and applied Machkevitch, stating:

Construction work

For there to be a construction contract, one party must undertake to "carry out construction work" or "supply related goods and services" to another party. Section 65 of the BIF Act provides an exhaustive definition of "construction work".

Section 65(1) of the BIF Act relevantly provides:

Section 65(2) provides:

Section 65(3) excludes certain work from the definition:

The exclusion in section 65(3)(b) is sometimes referred to as the "mining exception". In Cadia Holdings Pty Ltd v Downer EDI Mining Pty Ltd [2020] NSWSC 1588, Stevenson J held that preparatory work that is not for the actual purpose of extracting minerals falls within the meaning of construction work and is not excluded by the mining exception in the NSW Act (equivalent to section 65(3)(b) of the BIF Act). His Honour stated that the mining exception was to be construed narrowly to benefit the claimant, meaning the tunnelling, boring, or construction of underground works referred to in the exception must be for the actual purpose of extracting minerals. Where the object and purpose of a contract is not to cause the contractor to undertake work for the purpose of actually extracting minerals, the mining exception will not apply.

In BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739, Stynes J found that the maintenance of baggage conveyor systems, aerobridges, check-in kiosks and baggage return carousels fell within the meaning of construction work under the NSW Act (equivalent to section 65(1)(b) of the BIF Act) on the basis that the significant structures were permanently attached to the terminal building.

Related goods and services

Section 66 of the BIF Act defines "related goods and services" in relation to construction work:

The definition of related goods and services is tied to construction work. If the underlying work is not construction work within section 65, then goods and services supplied in connection with that work will not be "related goods and services" and there will be no construction contract.

What is a "progress payment"?

The BIF Act scheme depends on the existence of an entitlement to a "progress payment". Section 64 defines "progress payment":

In EnerMech Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd [2024] NSWCA 162, Basten AJA (with whom Meagher JA and Griffiths AJA agreed) considered the definitions of "construction contract" and "progress payment" in the NSW Act. His Honour stated at [16]:

Practice tips

• Before serving a payment claim, verify there is a valid construction contract (or sufficient "other arrangement") between the parties who are named as claimant and respondent.
• If relying on an informal arrangement (not a written contract), ensure there is sufficient detail about key terms: what work is to be done, the price or rate, timing, and payment terms. A mere request to do work followed by performance will likely be insufficient.
• Check the correct legal entities are parties to the arrangement. Use the objective theory of contract to identify the parties from their communications and conduct.
• Ensure the work claimed is "construction work" within section 65 or relates to "related goods and services" within section 66. If in doubt, check whether the work falls within any of the express exclusions in section 65(3).
• If the work involves mining or extraction activities, consider carefully whether the mining exception in section 65(3)(b) applies. The exception is to be construed narrowly and only applies to work for the actual purpose of extracting minerals.

Requirements of a payment claim

Identify the construction works

Pursuant to section 68(1)(a) of the BIF Act, a payment claim must identify the construction work or related goods and services to which it relates.

General principles

The test is not whether the claim explains every calculation, but whether the relevant construction work (and/or related goods and services) is sufficiently identified such that the basis of the claim is reasonably comprehensible to the recipient. In MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, Dalton JA (Brown and Kelly JJ agreeing) said (adopting T & M Buckley Pty Ltd v 57 Moss Road Pty Ltd [2010] QCA 381):

In ascertaining whether the identification of construction work is reasonably comprehensible to the recipient, the following matters are usually relevant (among others, discussed below):

• The fact that payment claims are often "given and received by people experience in the building industry" and that the level of description might reflect that. Vanbeelen v Blackbird Energy Pty Ltd [2006] QDC 285, [37] (Brabazon KC DCJ) citing McDougall J in Isis Projects v Clarence Street [2004] NSWSC 714, [36]–[38].
• The parties' background knowledge. "It is appropriate to take into account the background knowledge of the parties derived from their past dealings and exchanges of information". Mackie Pty Ltd v Counahan [2013] VSC 694, [46] (Vickery J); Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd [2011] 1 Qd R 17, [25].
• If the payment claim is claiming for items that are mentioned in the construction contract, their identity may be able to be ascertained by reference to the contract. See the observations of McDougall J in Multiplex Construction Pty Ltd v Luikens [2003] NSWSC 1140, [37] approved in Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448, 455-6; [2005] NSWCA 391, [33] cited in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178, [58] (Brown J):

Degree of particularity in identifying construction works

The construction work (or related goods and services) must be identified with some degree of particularity. That is, the specific work the subject of the claim should be identified, rather than simply the general work that is the subject of the construction contract as a whole: Jemzone Pty Ltd v Trytan Pty Ltd (2002) 42 ACSR 42; [2002] NSWSC 395, [43].

The respondent should be capable of determining whether or not to pay the claim. "There must be sufficient specificity in the payment claim for its recipient actually to be able to identify a payment claim for the purpose of determining whether to pay": Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) [2005] NSWCA 409, [47]–[48] (Santow JA); see also Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248, [12] (Finkelstein J) cited in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178, [52] (Brown J); see alike observations in Richard Kirk Architect Pty Ltd v Australian Broadcasting Corp [2012] QSC 117, [29] (Daubney J).

However, determining whether the construction work has been sufficiently "identified" should not be approached in an unduly technical manner: Hawkins Construction (Aust) Pty Ltd v Macs Industrial Pipework Pty Ltd [2002] NSWCA 136, [20] (Davies AJA).

If the payment claim merely consists of a few failures to identify construction work, but by and large the work is properly identified, the payment claim may not necessarily be invalid: Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) [2005] NSWCA 409, [37] (Santow J).

Factual and mathematical errors

Generally, whether the works have been sufficiently "identified" for the purpose of section 68(1)(a) is not to be assessed by reference to whether the payment claim is factually correct or has been calculated strictly in accordance with the contract: Denbrook Constructions Pty Ltd v CBO Developments Pty Ltd [2022] QDC 184, [66] (Porter KC DCJ).

Additionally, if the payment claim has some mathematical errors, that will not of itself invalidate the payment claim, unless the errors are of a nature which renders or contributes to the payment claim being incomprehensible. KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178, [43] (Brown J).

History of paying similar payment claims may be indicative of sufficient identification

In Isis Projects Pty Ltd v Clarence Street Pty Ltd [2004] NSWSC 714, Clarence Street (Developer) and Isis Projects (Builder) enter into a construction contract to refurbish and fit out a building at 50 Clarence Street, Sydney NSW 2000. The Developer failed to pay in full, or serve payment schedules in response to, payment claims 12 and 13 (PC12 and PC13), which consisted of a cover sheet and a tax invoice describing the work by one line items, and showing for each the original contract value, the amount of previous claims, the value of work to date and the percentage completed. The Developer contended PC12 and PC13 were not valid. The Builder contended the PCs were valid and the Developer's failure to issue payment schedules meant the PCs were payable in full. The Court held that the previous conduct of the Developer in having paid 11 previous payment claims of a similar nature showed that the Developer was capable of finding meaning in the Builder's identification of the works. Thus, that conduct supported the conclusion that PC12 and PC13 sufficiently identified the construction work to which their respective payment claims relate. See the findings of McDougal J at [38]:

Case examples of what is not sufficient

MWB Everton Park

Percentages against broad trade headings without tethering to identifiable scopes/locations/activities will usually fail. In MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, the Court held a trade-summary/percentage approach did not identify the work for a 56-townhouse project:

That approach reflects Brown J's analysis in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178, where a one-page "trade breakdown" with only categories and percentages – no particulars of the actual work – failed the identification limb:

KDV Sport

The judgment in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178 helpfully provides an excerpt of the payment claim which, in that case, was found not to have identified the construction work to which it related:

Specifically, at [37] – [38] of KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178, Brown J gave examples of line items which were inadequately described:

• "Aluminium Windows & Doors";
• "Electrical";
• "Builder's Preliminaries";
• "Concrete Supply";
• "Mechanical".

Her Honour found at [60] that these items were distinguishable from the following line items which were adequately described in Peter's of Kensington v Seersucker Pty Ltd [2008] NSWSC 897, [44]–[75] (McDougall J):

• Stage (Warehouse/Retail/Office) Design Development;
• Stage (Warehouse/Retail/Office) Contract Documents;
• Stage 2 (Carpark) Design Development;
• Stage 2 (Carpark) Contract Documents Development.

Adjudication examples

MSS Projects (NSW) Pty Ltd v CPB BAM Ghella UGL JV (Adj No 2658135) – The document had clear front-matter and a contract summary, then line-item tables under specific categories showing unit, quantity, rate, completed-to-date and completed-this-period, with brief variation notes and attachments tied to the pricing schedule. Only defined categories were claimed for the period, and the descriptions and figures aligned with Annexure A/H so the respondent could understand and check them. Accordingly, the adjudicator found section 68(1)(a) was satisfied.

Verus Construction Pty Ltd v Tripple J. T Pty Ltd (Adj No 925538) – The adjudicator found the claim failed to satisfy section 68(1)(a) because the monthly "work done" descriptions were broad labels with no particulars, so the basis of the claim was not reasonably comprehensible. He noted the EOT component was shown only by three red lines on a one-page program and a separate daily rate sheet, which did not give sufficient particulars of either the EOTs or the resulting delay costs. The variations were described over one or two pages but then referred to other invoices and documents that were not included with the claim, so the supporting detail was missing. Accordingly, the adjudicator found he did not have jurisdiction.

YFA Pty Ltd v Advanced Buildings (Queensland) Pty Ltd (Adj No 1067253) – The "payment claim" was essentially a tax invoice (INV-2313, 31 March 2021) tied to a purchase order, with no particulars of what work was done, where, or when (no measurements, locations, period, drawings or calculations). The document did not "clearly, reasonably and adequately" identify the construction work to which it related. On that basis and for other reasons, the adjudicator found he did not have jurisdiction.

Practice tips

• Use location + scope + activity + period for every line (e.g., "Tower 1, L10–L12: install grid & tile to corridors – 1 January 2025 to 10 January 2025").
• Anchor to the contract: cite the contract/Annexure item ID, unit, quantity, rate, previously approved and this period columns.
• Avoid percentages against broad trades ("Electrical 15%"); make it findable on site with concrete descriptors.
• Keep all supporting documents with the claim (drawings/marked-ups, delivery dockets, photos) and ensure the text of the claim itself makes sense without hunting prior claims.
• For supply-only items, specify units/tonnage/quantities, delivery dates/locations, and what remains to supply (if any).
• Variations, delay costs claims, etc. should ideally be communicated by project letter to the respondent first, and then that correspondence should be referred (and attached) to the payment claim.

Requirements of a payment claim

State the claimed amount

Pursuant to section 68(1)(b) of the BIF Act, a payment claim must state the amount of the progress payment (i.e. the claimed amount) that the claimant claims is payable by the respondent.

Must state a claimed amount

To avoid ambiguity, a payment claim should clearly identify a single, specific figure as the "claimed amount". Failing to state the claimed amount may invalidate the payment claim, even if the total amount of the payment claim is ascertainable by summing individual items claimed.

Avoid stating multiple figures that could be construed as the claimed amount

Similarly, a payment claim should avoid presenting multiple figures that could each be read as the "claimed amount". In MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, the Queensland Court of Appeal found that an email and multiple spreadsheets did not state a single claimed amount. The spreadsheets showed different "due this claim" totals for separable parts of the works, and the project summary failed to state the total cumulative claim. Because there was no clearly identified, single claimed amount, the package of documents did not constitute a valid payment claim under the BIF Act (at [27]–[33]).

Having said this, there is authority under the predecessor Building and Construction Industry Payments Act 2004 (Qld) suggesting that it is sufficient for a payment claim to state multiple amounts which collectively constitute the claimed amount. See the observations of Henry J in Camporeale Holdings Pty Ltd v Mortimer Construction Pty Ltd [2015] QSC 211, especially at [32]:

Where applicable, the claimed amount should be GST inclusive

To the extent GST applies, best practice is to express the claimed amount as the GST inclusive figure. While the issue has not been tested before a court, expressing a claimed amount as GST exclusive may expose the payment claim to an argument that the GST component is not part of the payment claim.

Requirements of a payment claim

Request payment

Pursuant to section 68(1)(c) of the BIF Act, a payment claim must request payment of the claimed amount.

History

The requirement to request payment of the claimed amount was introduced under the BIF Act in lieu of the former requirement under the Building and Construction Industry Payments Act 2004 (Qld) to state that the payment claim was made under the Act. Most jurisdictions other than Queensland (e.g. New South Wales, Victoria, Western Australia, South Australia, Tasmania, Australian Capital Territory) still require an express endorsement under their respective security of payment acts.

"Invoice" is sufficient

For the purpose of satisfying section 68(1)(c) of the BIF Act, it is sufficient to include the word "invoice" on the face of the payment claim (section 68(3) of the BIF Act). It would appear that the payment claim does not have to, in fact, be a legitimate tax invoice; however, if the claimant intends to rely on including the word "invoice" for the purpose of requesting payment, best practice would be to ensure the payment claim satisfies the requirements of a valid tax invoice under section 29.70 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

"Amount due this claim" is not sufficient

In MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, the Queensland Court of Appeal held that the words "amount due this claim" was not sufficient to request payment. At [35], Dalton JA (Brown and Kelly JJ agreeing) stated:

Request for payment must be express or necessarily and clearly implied

In the same decision (MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94), the Queensland Court of Appeal also held that for something to amount to a "request" for payment, it must be either expressly stated in the payment claim, or necessarily and clearly implied:

Endorsement under the BIF Act might not be sufficient

As mentioned above, section 68(1)(c) of the BIF Act was introduced to replace the previous requirement to expressly state that the payment claim was made under the Building and Construction Industry Payments Act 2004 (Qld). In practice, many Queensland payment claims still contain an endorsement under the legislation.

In Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2024] QSC 16, the Supreme Court of Queensland found that a document that:

• was titled "Victoria and Albert Broadbeach Progress Claim";
• included words such as "Total progress claim value";
• was endorsed under the BIF Act, having stated "This Progress Claim is submitted under the Building Industry Fairness (Security of Payment) Act 2017"; and
• was accompanied by a statutory declaration in relation to the payment of "Progress Claim No 7",

amounted to an implied request for payment (see [139] to [142]).

However, the Queensland Court of Appeal in MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94 casted doubt over whether those four factors were indeed sufficient to "request payment of the claimed amount" under section 68(1)(c). At [36], Dalton JA (Brown and Kelly JJ agreeing) stated (possibly in obiter, though the reasons do appear to have informed the Court's ultimate decision):

Based on MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, it would appear that stating a payment claim is made under the BIF Act is not, by itself, sufficient to meet the requirement of section 68(1)(c).

That said, the District Court of Queensland in Starline Interiors Pty Ltd v Tomkins Commercial and Industrial Builders Pty Ltd [2025] QDC 63 (at [22]–[34]) held a document that included the words "payment claim" and stated "This is a payment claim made under the Building Industry Fairness (Security of Payment) Act 2017" was valid. Kent KC DCJ distinguished Dalton JA's findings in MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94 on the basis that, among other things, the documents in Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd [2024] QSC 16 that her Honour appeared to opine were not sufficient to request payment under section 68(1)(c) contained the words "progress claim" rather than "payment claim". There were other reasons supporting the validity of the payment claim in this case, including that the document included the words "net payment claimed", where the past participle "claimed" implies a request for payment.

Adjudication examples

Elite Earthmoving & Civil Pty Ltd v QLD Built Pty Ltd (Adj No 2881547) – The phrase "Contract Inv" on the document was held insufficient to satisfy section 68(1)(c). The adjudicator reasoned that section 68(3) deems a document bearing the word "invoice" to request payment; shorthand ("Inv") isn't within the text of the statute. Accordingly, the adjudicator found she had no jurisdiction.

J Hutchinson Pty Ltd v Eve Co Aust Pty Ltd (Adj No 2794290) – Although the document did not appear to be a formal tax invoice, and the word "invoice" was not prominent on the face of the document, the adjudicator held that mere inclusion of the word "invoice" anywhere in the written document is enough under section 68(3) to satisfy section 68(1)(c).

Croudace Greenhouses International Pty Ltd v Hansen Yuncken Pty Limited (Adj No 2756369) – The payment claim did not request payment of the claimed amount and did not bear the word "invoice". Applying MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, the adjudicator found that headings and statements such as "Progress Claim is made for payment…", references to a "Total" figure, BIF Act endorsement, and a statutory declaration did not independently amount to a request for payment under section 68(1)(c). Accordingly, the adjudicator found he had no jurisdiction.

Melrose Built Pty Ltd v 114 Edward Pty Ltd (Adj No 2588358) – The adjudicator held that the narration "TOTAL PAYABLE (Excluding GST)" in the progress claim satisfied (expressly or clearly implied) the section 68(1)(c) request requirement, including because the words "total payable" (having regard to the ordinary meaning of "payable") go further than "amount due" and amount to an implied request for payment.

Practice tips

• Include the word "invoice" or a phrase to the effect of "this is a request for payment under the Building Industry Fairness (Security of Payment) Act 2017 (Qld)" (or both).
• If relying only on the word "invoice", while it is probably not strictly necessary for the payment claim to be a valid tax invoice, best practice may be to ensure the document complies with the formal requirements of a tax invoice (e.g. state the claimant's name and ABN, identify which supplies are taxable supplies and the relevant amounts of GST payable, include a date of issue, etc.).

Requirements of a payment claim

Claim for a valid reference date

Pursuant to section 70 of the BIF Act, a person who has carried out construction work, or supplied related goods and services, under a construction contract is entitled to a progress payment from each reference date.

A "reference date" is defined under section 67 of the BIF Act.

Jurisdictional requirement

A payment claim will be invalid if it is not made from a valid reference date. As the High Court unanimously found in Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340 (Southern Han):

The decision in Southern Han was dealing with reference dates under analogous provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW); however, the decision has been followed in Queensland. See for example the following passage of Wilson J in National Management Group Pty Ltd v Biriel Industries Pty Ltd [2019] QSC 219:

See also Karam Group Pty Ltd v Earthmoving Contractors Pty Ltd [2021] QSC 10:

Thus, if a payment claim is made without the accrual of a valid reference date, then it is invalid and cannot be adjudicated upon.

From each reference date

In past, there have been competing Queensland views as to whether a payment claim must be made "on" the reference date or may be made "after" (but in respect of) that date. In Reed Constructions (Qld) Pty Ltd v Martinek Holdings Pty Ltd [2011] 1 Qd R 28; [2009] QSC 345, Daubney J read the entitlement as confined to making a claim on the date specified, recognising only a single opportunity per month, with any missed month postponed to the next (at [26]). By contrast, in Tenix Alliance Pty Ltd v Magaldi Power Pty Ltd [2010] QSC 7, Fryberg J declined to follow Reed, holding that the Act does not forbid making one claim after the relevant date in respect of that date; the prohibition is only against two claims for the one reference date (at [45]–[46]). The later approach was adopted by Mullins J in McNab Developments (Qld) Pty Ltd v MAK Construction Services Pty Ltd [2013] QSC 293: the statutory right "from each reference date" permits a claim at any time after the contractual date, subject to the statutory outer limit. Under the BIF Act, the correct approach almost certainly is that a payment claim can be served both on and from/after the reference date.

Cannot claim twice for the same reference date

Pursuant to section 75(4) of the BIF Act, a claimant cannot make more than one payment claim for each reference date:

If a payment claim is made in respect of a reference date already relied upon for a previous valid payment claim, then it will be invalid: National Management Group Pty Ltd v Biriel Industries Pty Ltd [2019] QSC 219, [44]–[69] (Wilson J).

Payment claim should not claim for work performed after reference date

There is a line of authority in Queensland which suggests that a payment claim will be invalid if it claims for work performed after the reference date. See for example:

• the following passage in Karam Group Pty Ltd v Earthmoving Contractors Pty Ltd [2021] QSC 10 (Karam) which states that a payment claim that includes work beyond the reference date is invalid:

• the decision in Watkins Contracting Pty Ltd v Hyatt Ground Engineering Pty Ltd [2018] QSC 065 (Watkins) where the Supreme Court of Queensland held that two purported payment claims which included work carried out after the reference date were not valid:

Progress payment to be assessed as at reference date

The reference date is the point in time at which a payment claim is to be assessed. That is, for the purpose of valuing a payment claim, the parties' rights and obligations should be determined as at the reference date. Events which post-date the reference date – even if they pre-date the adjudication application (if any) – are not strictly relevant to the valuation of the payment claim: Chevron Park Pty Ltd v Groupline Constructions Pty Ltd [2024] QSC 202; Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2025] QSC 147 (c.f. the Western Australian approach: Duro Felguera Australia Pty Ltd v Samsung C&T Corp (2018) 52 WAR 323).

Contractual preconditions to the accrual of a reference date

Generally, a contractual provision that purports to set preconditions to the accrual of a reference date (or when the claimant is entitled to make a progress payment) will be void for the purposes of the BIF Act.

In Lean Field Developments Pty Ltd v E & I Global Solutions (Aust) Pty Ltd [2016] 1 Qd R 30, Applegarth J held at [55]:

Applegarth J made similar findings in BRB Modular Pty Ltd v AWX Constructions Pty Ltd [2015] QSC 218, finding that a clause 14.10 of the parties' contract – which required the claimant to deliver a signed statutory declaration at least two days prior to the time for making the payment claim – was not capable of conditioning the accrual of a reference date.

His Honour's decision in Lean Field Developments Pty Ltd v E & I Global Solutions (Aust) Pty Ltd [2016] 1 Qd R 30 was considered and applied by Ball J more recently in East End Projects Pty Ltd v GJ Building and Contracting Pty Ltd [2020] NSWSC 819.

Reference dates following take out

Under many unamended Australian Standard contracts, payment to the claimant is suspended upon the respondent validly taking the work out of its hands. Notwithstanding the authorities about contractual preconditions to reference dates, the position appears to be that reference dates do not arise upon payments being suspended following take out.

In Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340, the High Court held that a contractor did not have a valid reference date because the principal had exercised its right under clause 39.4 of the contract to take the work out of the contractor's hand, and that operated to expressly suspend payment under completion of the process for which clause 39.6 provided. Accordingly, the High Court allowed an appeal quashing a lower court decision that the adjudicator's determination was valid.

A year after Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340, the Supreme Court of Victoria quashed an adjudicator's determination in Westbourne Grammar School v Gemcan Constructions Pty Ltd [2017] VSC 645 on the basis that there was no reference date because the works had been taken out of the contractor's hands. In that case, the principal served a take out notice under clause 39.4 of the contract. The contractor subsequently made a payment claim and was awarded $241,973.33 at adjudication. The principal applied to the Court to have the decision set aside on the grounds the payment claim had no reference date because the works had been taken out of the contractor's hands. The Court applied Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340 and held that the accrual of reference dates was suspended on the principal's exercise of its take out rights under clause 39.4.

Subsequently, in Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd [2020] NSWCA 172, the New South Wales Court of Appeal applied both Southern Han and Westbourne Grammar School to hold that statutory entitlements no longer arise following valid service of a take out notice:

It is important to note that the suspension of payment dates is a function of the fact many Australian Standard contracts defer payment to the claimant until the completion of the works taken out of their hands. If a take out clause does not provide that deferral, then it is possible reference dates may still accrue.

Reference dates following termination

Subsection (2) of section 67 provides that, if a construction contract is terminated and the contract does not provide for, or purports to prevent, a reference date surviving beyond termination, the final reference date for the contract is the date the contract is terminated. For a case example, see SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307 in which Bond J upheld an adjudicator's decision on the basis that, among other things, he had correctly found the claimant had a final reference date arising on the date of termination of the contract.

Practice tips

• Serve only on or after the reference date, never before.
• Make one claim per reference date and, if needed, re-include unpaid amounts in a later claim rather than issuing a second claim for the same date.
• Include only work up to the reference date (always exclude work done later, late variations, or post-date quantities).
• On termination/take-out, confirm whether reference dates survive; if not, treat the termination date as the final reference date and avoid draft-claim preconditions that condition accrual.

Requirements of a payment claim

Not be for unlicensed building work

Under section 42 of the Queensland Building and Construction Commission Act 1991 (Qld), a person who performs unlicensed building work is not entitled to any monetary or other consideration – including under the BIF Act – for doing so:

Dart Holdings – Contract cannot be severed

In Dart Holdings Pty Ltd v Total Concept Group Pty Ltd [2012] QSC 158, the respondent applied to set aside an adjudicator's decision on the basis that the claimant was unlicensed to perform the contracted work. The Court held that most items (windows, doors, shopfronts, etc.) fell within the claimant's Carpentry licence, but glass awnings did not, so entering the contract breached the Queensland Building Services Australia Act 1991 (Qld) (now the Queensland Building and Construction Commission Act 1991 (Qld)). Because the contract was lump-sum (meaning it could not be severed to save part of the payment provisions), there was no security of payment entitlement and therefore the adjudicator's decision was void. McMurdo J held at [44]:

Galaxy Developments

Subsequently, in Galaxy Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd [2020] QSC 51, the claimant (contractor) performed subdivision works and obtained an adjudication, but the respondent (principal) argued the claimant lacked an appropriate licence for minor "bus stop" items. The Court held the claimant's structural landscaping licence covered relocating the prefabricated bus shelter (a "prefabricated shed") but not the freestanding seat and bike rack, which were fixed structures constituting building work. The busway exemption didn't apply; Foxwell Road was a dedicated road (so road works were exempt) but the footpath wasn't part of the "road", so the seat and bike rack remained regulated building work. Because the contract required some unlicensed building work, the claimant had no contractual entitlement to payment and therefore no Payments Act entitlement. Nevertheless, Dalton J acknowledged the absurdity of the result of her Honour's decision at [109]:

Galaxy Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd [2020] QSC 51 was appealed unsuccessfully. However, in the appeal judgment (Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd (2021) 7 QR 34), McMurdo and Fraser JJA and Jackson J all disagreed with the primary judge's findings in respect of the licence point. Their Honour's disagreement was in relation to whether the footpath was part of the road, not in relation to whether payment rights under the BIF Act are suspended if unlicensed building work is performed.

Ingeteam

In Ingeteam Australia Pty Ltd v Susan River Solar Pty Ltd [2024] QSC 30, the claimant applied for adjudication in respect of a ~$2.39m payment claim, but the respondent argued the claimant was unlicensed because of a $294 plywood "floor repair". The adjudicator, without giving the claimant a chance to respond, found the repair was "building work" (for the purposes of the Queensland Building and Construction Commission Act 1991 (Qld)), and accordingly found he had no jurisdiction under the BIF Act. The Court held the adjudicator had denied procedural fairness to the claimant and misapplied the "floating floor" and sub-$3,300 exemption (so no licence was required). Because the adjudicator's licensing findings were jurisdictional errors that would wrongly bind later adjudications via Dualcorp estoppel, Applegarth J declared the adjudicator's licensing findings void (in part) for jurisdictional error.

Practice tips

• As a claimant, do a licence–scope audit for every item/variation, and if using the head-contractor exemption, require and file proof that only appropriately licensed subcontractors will perform building work.
• Respondents to adjudication applications should perform QBCC licence searches to check whether the claimant held the appropriate licence(s) at all material times.

Requirements of a payment claim

Within six months of work

Pursuant to section 75(2) of the BIF Act, unless the payment claim relates to a final payment, an interim payment claim must be given before the end of whichever of the following periods is the longest:

Is this a jurisdictional requirement?

Compliance with section 75(2)(b) is a jurisdictional fact - an objective requirement that must actually be satisfied, not merely something the adjudicator forms an opinion about. If a payment claim does not comply with section 75(2)(b), it is invalid and any adjudication decision based on it will be void.

In Forme Two Pty Ltd v McNab Developments (Qld) Pty Ltd [2025] QSC 96, Hindman J stated at [42]:

Her Honour concluded at [3]:

This approach follows earlier Queensland authority. In South East Civil and Drainage Contractors Pty Ltd v AMGW Pty Ltd [2013] 2 Qd R 189, Jackson J held at [51]-[55] that non-compliance with the predecessor provision (section 17(4) of the BCIPA) rendered both the payment claim and adjudication decision invalid.

It also aligns with SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307, where Bond J held at [36]-[38] that compliance with the timing requirement for final payment claims under section 75(3) was an objective jurisdictional fact.

What does "construction work to which the claim relates" mean?

The critical interpretative question is whether section 75(2)(b) requires that the payment claim includes a claim for payment for some work carried out in the six months prior to giving the claim, or whether it is sufficient that any work under the contract was done in that period (whether or not that work is actually claimed).

The payment claim must include a claim for payment for at least some work carried out within the six-month period. It is not enough that work was done under the contract generally if none of that work is the subject of the payment claim.

The foundational New South Wales authority (which has been followed in Queensland) is Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Ltd (2004) 61 NSWLR 515. Hodgson JA (with whom Mason P and Giles JA agreed) stated at 519 [18]:

Her Honour confirmed the practical effect at 520 [21]:

This reasoning was expressly adopted and applied to section 75(2)(b) of the BIF Act in Forme Two Pty Ltd v McNab Developments (Qld) Pty Ltd [2025] QSC 96. Hindman J stated at [31]:

The practical effect is that you can include old work (more than six months old) in a payment claim, but only if you also include at least some work done within the six-month period.

Does section 75(2)(a) or section 75(2)(b) apply?

Section 75(2) requires that the claim must be given before the end of whichever of the two periods is the longest: (a) the period worked out under the construction contract; or (b) six months after work was last carried out.

The key question is when section 75(2)(a) applies such that the contractual period governs (rather than the six-month default). Section 75(2)(a) only applies if the contract provides for a period within which claims must be served - not merely when claims can be made or how often they can be made.

In Evans Built Pty Ltd v United Petroleum Pty Ltd [2019] QSC 223, Burns J stated at [18]:

The distinction is this: a clause that says claims can be made "monthly" or "on the 25th of each month" specifies frequency, not a period for service. Section 75(2)(a) does not apply. By contrast, a clause that says claims must be served "within X days after work is done" specifies a period for service, and section 75(2)(a) applies. If section 75(2)(a) does not apply, the default six-month period under section 75(2)(b) governs.

When does work need to be done?

The work must be carried out in the six months prior to the giving of the payment claim - not prior to the reference date.

In Forme Two Pty Ltd v McNab Developments (Qld) Pty Ltd [2025] QSC 96, McNab conceded (at [51]) "that the payment claim did not include any claim for an amount on account of work undertaken during the period six months before the payment claim was given." The adjudicator had concluded (wrongly, as it turned out) that section 75(2)(b) did not apply because McNab had done work after the last work claimed - but Hindman J held this was irrelevant. Her Honour stated at [53]:

Relationship to section 75(3) (final payment claims)

Section 75(2) applies to interim payment claims. Section 75(3) applies to final payment claims.

For final payment claims, the claim must be given before the end of whichever of the following periods is the longest: (a) the period worked out under the contract; (b) 28 days after the end of the last defects liability period; (c) 6 months after completion of all construction work; or (d) 6 months after complete supply of all related goods and services.

The key difference is that section 75(3)(c) refers to completion of all work under the contract, whereas section 75(2)(b) refers to when work to which the claim relates was last carried out.

In SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307, Bond J stated at [38]:

Her Honour explained the operation of section 75(3)(c) in the context of termination at [43](c):

Practice tips

For interim claims (section 75(2)):

• Check if there's a contractual period that specifies when claims must be served (not just how often). If not, the six-month rule applies.
• Always include at least some recent work - work done within the six months before you serve the claim.
• You can include old work (more than six months old) provided you also claim for at least some work done in the last six months.
• If all work stopped more than six months ago and you want to make an interim claim, you're likely out of time (unless the contract provides a longer period under section 75(2)(a)).

For final claims (section 75(3)):

• Usually you have six months from completion of all work (or termination, if earlier).
• If there's a defects liability period, you may have 28 days after it ends (if that's longer).
• Check the contract - it might give you longer still.

Requirements of a payment schedule

Identify the payment claim

Pursuant to section 69(a) of the BIF Act, a payment schedule must identify the payment claim to which it responds.

Minimum requirements for identification

In Vannella Pty Limited atf Capitalist Family Trust v TFM Epping Land Pty Ltd [2019] NSWSC 1379, Henry J considered whether an email entitled "Your Client's Claims" was a valid payment schedule. His Honour held, at [447]:

In that case, Decon had served a progress claim on the defendants by email under cover of a letter from Decon's solicitors referring to "our client's Progress Claim dated 3 June 2019". The defendants responded on 14 June with an email titled "Your Client's Claims". Decon subsequently sought summary judgment against the defendants for the amount claimed, on the basis that the defendants had failed to submit a valid payment schedule.

The Court held that the email was not a valid payment schedule for three key reasons. First, at [451] to [456], the Court found:

The Court concluded, at [453], that "the general reference to 'claims' could refer to one or more of those past claims" and was therefore too broad and did not directly respond to the specific payment claim.

His Honour further held, at [463], that the email failed its essential function:

Payment schedule addressing only one component of payment claim is invalid

In Denham Construction Pty Ltd v Islamic Republic of Pakistan (No 2) (2016) 311 FLR 187; [2016] ACTSC 215, Mossop AsJ considered a payment schedule that responded to only part of a payment claim. His Honour held that a payment schedule which only addresses one component of the payment claim does not satisfy the requirement to identify the payment claim to which it relates.

In that case, the respondent had issued a document responding to a claim for variations (designated "DCV075") which formed part of Payment Claim 26, but the document did not address the other components of Payment Claim 26. At [34], Mossop AsJ stated:

This principle emphasises that a payment schedule must respond to the payment claim as a whole, not merely selected components of it, even if those components form a significant part of the claimed amount. The purpose of a payment schedule is to identify what amounts are in dispute and why, in respect of the entire payment claim.

Significant errors may prevent identification

In NewGrow Pty Ltd v Buxton Constructions (Vic) Pty Ltd [2019] VCC 464, Cosgrave J was required to consider the validity of a number of payment schedules served by the defendant and determine whether they were issued in compliance with the equivalent Victorian legislation. The defendant had issued a schedule in response to a payment claim within the time frame imposed by the Act and reissued a second schedule for the same claim outside the time frame.

For the first schedule, the Court held that given the significant number of errors contained in the payment schedule, a reasonable person would be justifiably confused about whether the schedule related to the corresponding claim, such that the schedule failed to satisfy the identification requirement. The Court's reasoning was that the cumulative effect of multiple errors, inconsistencies, and ambiguities made it objectively unclear which payment claim the schedule purported to address.

As a result of the first schedule's invalidity, the second schedule which revised the first could not be valid. Further, it was served out of time and could not be a schedule in its own right. This decision highlights that respondents cannot cure a defective payment schedule by issuing a corrected version outside the statutory timeframe.

Incorporation of documents by reference

Where a respondent seeks to incorporate previous documents into a payment schedule by reference, those documents must be identified with sufficient particularity to allow the recipient to identify them. In Vannella Pty Limited atf Capitalist Family Trust v TFM Epping Land Pty Ltd [2019] NSWSC 1379, at [469], Henry J held:

Requirements of a payment schedule

State the scheduled amount

Pursuant to section 69(b) of the BIF Act, a payment schedule must state the amount of the payment, if any, that the respondent proposes to make.

Contractual deeming clauses and superintendent's certificates

The relationship between contractual deeming provisions and the statutory requirements for payment schedules was considered in two related decisions by the Queensland Supreme Court and Court of Appeal.

In Kangaroo Point Developments MP Property Pty Ltd v RHG Construction Fitout and Maintenance Pty Ltd [2021] QSC 30, Justice Dalton determined that a superintendent's assessment of a payment claim did not constitute a payment schedule within the meaning of section 69 of the BIF Act on the basis that the document did not state the amount of the payment, if any, that the respondent proposed to make as required by section 69(b) of the BIF Act.

In that case, the construction contract provided that any assessment of a payment claim provided by the superintendent "shall constitute a payment schedule for the purposes of the Security of Payment Act". The superintendent's certificate stated the superintendent's opinion as to the amount payable, but did not expressly state the amount that the respondent (the developer) proposed to pay.

In assessing the validity of the superintendent's assessment, Justice Dalton held that the contractual deeming provision could not deem a document, which did not comply with section 69 of the BIF Act, as a payment schedule. As such, the failure to state the amount that the respondent proposed to pay was fatal to its validity as a payment schedule.

However, on appeal in RHG Construction Fitout and Maintenance Pty Ltd v Kangaroo Point Developments MP Property Pty Ltd [2021] QCA 117, the Queensland Court of Appeal overturned the Supreme Court's decision. The Court of Appeal held that the superintendent's schedule, when read together with the contractual deeming provision, did satisfy section 69(b) of the BIF Act.

In reaching this conclusion, the Court of Appeal held that:

• to view the deeming clause as ineffective would constitute a failure to give the contract a business-like interpretation and would be ignoring the parties' use of long-standing statutory terms in their contractual arrangements; and
• the superintendent's schedule, when read with the deeming provision in the contract, meant that the amount stated in the schedule was the amount the developer proposed to pay and therefore section 69(b) of the Act was satisfied.

The effect of this decision is that where a contract contains a deeming provision stating that a superintendent's certificate "shall constitute" a payment schedule, the certificate can satisfy section 69(b) even if it expresses the amount as the superintendent's opinion rather than explicitly stating what the respondent proposes to pay. The certificate must be read together with the contractual deeming clause to ascertain whether the statutory requirement is met.

Stating a nil amount

A payment schedule may propose to pay a nil amount, and such a proposal can be either express or implied from the circumstances.

In Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333, Chesterman J considered whether an email refusing to accept an invoice constituted a payment schedule. The respondent's email stated "we accept not your invoice but we suggest to have a meeting on site next year to clarify the situation and to find a solution for both sides."

His Honour held that this amounted to a proposal to pay nil. At [246] to [248], Chesterman J stated:

Similarly, in ACP Properties (Townsville) Pty Ltd v Rodrigues Construction Group Pty Ltd [2021] QSC 45, Bradley J determined that two emails sent from the respondent stating that it considered no amount was payable in respect of the claimant's invoices, and that it proposed to pay an amount of $nil as a result of their contractual arrangement capping the amount payable, was sufficient to constitute a payment schedule for the purposes of sections 69(b) and (c) of the BIF Act.

The Court accepted that the respondent's position was sufficiently clear: it proposed to pay nothing, and it gave reasons for that position based on the contractual cap on amounts payable.

In BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739, Stynes J held that a "nil" amount can be inferred for the purpose of the equivalent NSW provision, where the respondent does not dispute the validity of a payment claim and expresses an intention not to pay the claimant any amount. At [97], Stynes J stated:

However, the document must make the respondent's position sufficiently clear. In Vannella Pty Limited atf Capitalist Family Trust v TFM Epping Land Pty Ltd [2019] NSWSC 1379, at [457], Henry J found that an email which "states that there are doubts as to whether the defendants owe Decon money at all" and which "leaves open the question of whether, and in what amount, payment will be made" did not satisfy the requirement to indicate the scheduled amount, stating:

The distinction is important: a statement that the respondent proposes to pay nil (or nothing) is sufficient, but a statement expressing uncertainty about whether anything is owed, or leaving open the possibility of future payment, is not sufficient to indicate the scheduled amount.

Requirements of a payment schedule

Reasons for withholding

Pursuant to section 69(c) of the BIF Act, if the amount proposed to be paid in a payment schedule is less than the amount stated in the payment claim, the payment schedule must state why the amount proposed to be paid is less, including the respondent's reasons for withholding any payment.

Payment schedule must address the entire payment claim

In Turnkey Innovative Engineering Pty Ltd v Witron Australia Pty Ltd [2023] NSWSC 981, Stevenson J considered whether a payment schedule was invalid if it failed to "indicate" reasons for withholding payment for a specific part of the payment claim. This case provides important guidance on the requirement that reasons must address all disputed components of a claim.

In that case, the payment claim had two components: (1) $499,924.63 for contract works calculated on an increased contract price, and (2) $304,230 for variations (representing some 40% of the total claim). The respondent's email stated it would "review your variations and your new pricing" and that the claimant could "claim progress for April based on the original contract price". The respondent instructed the claimant to "please adjust your claim accordingly and resubmit for approval".

Stevenson J held that the words "please adjust your claim accordingly and resubmit for approval" was sufficient to indicate to the contractor that its reasons for non-payment of the contract works component was that it disagreed with the repricing of the contract. At [177], His Honour stated:

However, the payment claim also included a claim for variations totalling $304,230. At [181] to [183], Stevenson J found that the email did not indicate any reason for withholding payment of this component:

At [139], His Honour emphasised the fundamental purpose of reasons in payment schedules:

This principle was also firmly established in the Queensland case of Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333. In that case, the payment claim sought three separate amounts. The respondent's email provided reasons for refusing to pay the first item (additional labour costs) but said nothing at all about the second and third items (overtime adjustments and refund of discount, totalling almost $88,000).

Chesterman J held, at [256] to [258], that the failure to address all components of the claim was fatal:

This decision makes clear that a payment schedule must address the entire payment claim. Where a claim has multiple components, the respondent must provide reasons for withholding payment in respect of each component, not just some of them.

Mere statement of when payment will be made is insufficient

In Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211, the NSW Court of Appeal overturned the District Court's findings that a refusal to pay two payment claims until work was complete was sufficient reasoning for withholding payment under the equivalent NSW provision.

In the District Court decision, Strathdee DCJ found that a valid payment schedule was given by the respondent, as the background communications between the parties clarified the works that were incomplete and that thus the respondent provided reasons for withholding payment.

In overturning the District Court's finding and determining that the payment schedule was invalid, the Court of Appeal held, at [35] to [37]:

The Court of Appeal further held that even if there was only one item that was the subject of the payment claim, a refusal to make payment until work had been completed does not demonstrate which of the items identified in the payment claim had been carried out before the reference date for which the claimant would be entitled to payment.

Importantly, at [44], the Court of Appeal also held that external materials cannot be used to reconstruct a deficient payment schedule:

This principle makes clear that a respondent cannot rely on previous correspondence or background communications to provide the reasons required by section 69(c). The reasons must be stated in the payment schedule itself (or in documents properly incorporated into it).

Reasons must be stated with sufficient particularity

In Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140, Palmer J considered the level of particularity required for reasons in a payment schedule. His Honour held, at [68] and [70]:

The purpose of this requirement, as Palmer J explained at [67], is to prevent a respondent from "ambushing" the claimant by serving a payment schedule that says nothing except that the claim is rejected, and then disclosing the reasons for rejection for the first time in the adjudication response.

Substantive dispute over pricing is a valid reason

In BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739, Stynes J determined that the substantive dispute between parties with regards to pricing was a valid reason for withholding payment under the equivalent Victorian provision on the basis that:

1. it was clear that the payment schedule in issue was in response to the payment claims;
2. the scope of the dispute was described with some particularity; and
3. it was irrelevant whether the claimant believed that there was a dispute between the parties.

This decision confirms that a pricing dispute, if described with sufficient particularity, can constitute a valid reason for withholding payment. The respondent need not prove that its reasons are correct or justified—the Act only requires that reasons be indicated. However, the reasons must be sufficiently clear to enable the claimant to understand the nature of the dispute.

Payment schedules cannot incorporate documents by mere reference

In Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd t/as Novatec Construction Systems [2009] NSWCA 157, the New South Wales Court of Appeal indicated that (although it was not necessary to ultimately decide) a respondent cannot include in a payment schedule previous documents that have passed between the parties, simply by way of reference to such documents. Rather, the Court of Appeal appeared to be suggesting that only those documents actually included and provided with the payment schedule could be construed as forming part of the payment schedule.

In reaching this conclusion the Court noted that an approach which would permit a party, by the so-called incorporation route, to purport to include in the payment schedule all manner of previous documents claimed to have passed between the parties, could lead to mayhem, where time is of the essence in relation to the critical significance of the steps to be taken by the respective parties under the Act.

This principle reinforces that reasons must be contained within the payment schedule itself (or in clearly identified documents provided with it), rather than requiring the claimant to search through previous correspondence to piece together the respondent's case.

Requirements of a payment schedule

What constitutes a payment schedule

The BIF Act does not prescribe a particular form for a payment schedule. However, the courts have considered various issues relating to whether a document (or multiple documents) can constitute a valid payment schedule.

Informal documents may constitute a payment schedule

In Gisley Investments Pty Ltd v Williams [2010] QSC 178, the Queensland Supreme Court examined whether a relatively informal email could be considered a valid payment schedule under the Act. The Court said that speed and informality was the object of the Act and as long as the essential criteria were satisfied, an informal email could constitute a payment schedule under the Act.

Further, the Court held that the statement in the email, "whilst the job continues to remain unfinished, final payment is not yet owed" amounted to a proposed payment of nil and provided sufficient reasons for that proposed payment. Consequently, the email satisfied the necessary elements of a payment schedule and was deemed so under the Act.

This principle was reinforced in Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333, where Chesterman J held, at [235] and [242]:

These decisions confirm that formality is not a requirement for a valid payment schedule. What matters is whether the document contains the essential statutory elements: identification of the payment claim, statement of the scheduled amount, and reasons for withholding payment (if the scheduled amount is less than the claimed amount).

Not every response within time is a payment schedule

However, in McConnell Dowell Constructors (Aust) Pty Ltd v Heavy Plant Leasing Pty Ltd [2013] QSC 223, the Supreme Court held that whilst an informal response to a payment claim can be a payment schedule, there is no authority for the proposition that the first correspondence sent by a party following receipt of a payment claim is a payment schedule, or "the proposition that a document which does not purport to be a payment schedule must be considered to be a payment schedule if it was delivered within the statutory timeframe".

Whether a response to a payment claim is a payment schedule depends "upon all of the circumstances of the case" (at [48]), and whether the response contains the necessary elements of a payment schedule as outlined in section 69 of the BIF Act.

This principle emphasises that merely responding to a payment claim within the statutory timeframe is not sufficient—the response must actually satisfy the statutory requirements to be a valid payment schedule. A respondent cannot rely on having sent something within time if that document does not meet the requirements of section 69.

Course of dealing and provisional language may indicate document is not a payment schedule

The position was clarified on appeal in Heavy Plant Leasing Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2013] QCA 386, in which the Court of Appeal held that a document, despite being in compliance with section 69, will not necessarily be a payment schedule in the following circumstances:

These principles recognise that context matters. If parties have consistently used formal payment schedules clearly labelled as such, an informal response lacking that identification is less likely to be considered a payment schedule. Similarly, language suggesting that the document is preliminary or that a fuller response will follow indicates that the document is not intended to be the respondent's final payment schedule.

Contractual payment schedule timeframes

In Allencon Pty Ltd v Palmgrove Holdings Pty Ltd trading as Carruthers Contracting [2023] QCA 6, the Queensland Court of Appeal considered the interaction between contractual timeframes for payment schedules and the statutory timeframe under section 76 of the BIF Act.

Section 76(1) provides that if given a payment claim, a respondent must respond by giving the claimant a payment schedule within whichever of the following periods ends first: (a) the period, if any, within which the respondent must give the payment schedule under the relevant construction contract; or (b) 15 business days after the payment claim is given to the respondent.

In Allencon, the subcontract required the payment schedule to be given within 21 calendar days. The respondent argued that the contract did not provide a "period" within the meaning of section 76(1)(a), and therefore only the statutory 15 business day period applied. The Court of Appeal rejected this argument, holding that the contractual 21 calendar day period was a period within which the payment schedule had to be given under the contract, and therefore section 76(1)(a) applied. As that period expired before the statutory 15 business day period, the respondent was required to give the payment schedule within 21 calendar days.

Multiple documents may constitute a payment schedule

In Heavy Plant Leasing Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2013] QCA 386, the Court of Appeal also noted that it is not implicit in the legislation that a payment schedule must consist of only one document. Multiple documents may, and often will, constitute a payment schedule. The Court remarked that the content of a particular document and its relevance to the other documents will be telling of whether that document constitutes part of the payment schedule.

Accompanying documents may be provided at the same time as the payment schedule, or may have been provided earlier and incorporated by reference into the payment schedule. A respondent cannot, however, supply the claimant with additional documentation that completes an otherwise incomplete payment schedule after service of the payment schedule.

In Heavy Plant Leasing Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2013] QCA 386 the Court made the following important observation:

This principle makes clear that while multiple documents may together constitute a payment schedule, the respondent must make it clear which documents form part of the payment schedule. The claimant should not have to guess or search through various documents to piece together the respondent's position.

Requirements of an adjudication application

Form S79

The application must be made in the approved form (Form S79) and filed with an Authorised Nominating Authority (ANA), not the QBCC.

Requirements of an adjudication application

Identify the claim/schedule

The application must identify the payment claim and the payment schedule (if any) to which it relates. Copies of these documents must be attached.

Requirements of an adjudication application

Pay prescribed fee

The claimant must pay the application fee charged by the ANA. Failure to pay the fee means the application is not considered "made" and may fall out of time.

Requirements of an adjudication application

Not outside four corners

The adjudication application (including its submissions) cannot raise new claims or reasons that were not included in the original payment claim. The application is limited to the issues and amounts claimed in the payment claim and responded to in the payment schedule.

Requirements of an adjudication response

Not exceed reasons for withholding payment

An adjudication response can only include reasons for withholding payment that were first raised in the payment schedule. A respondent cannot introduce new arguments, new expert reports, or new reasons for non-payment at this stage. This is why the payment schedule is so important.

Service

Service of payment claim

The payment claim must be served on the person liable to make the payment, as identified in the contract. Service must be in accordance with the contract's "notice" provisions (e.g., to a specific email address or physical address).

Service

Service of payment schedule

The payment schedule must be served on the claimant within the strict statutory timeframe (15 business days or as per the contract). Service must also comply with the contract's notice provisions.

Service

Service of adjudication application

A copy of the adjudication application must be served on the respondent, either before or immediately after it is filed with the ANA.

Service

Service of adjudication response

A copy of the adjudication response must be served on the claimant and the adjudicator within the time allowed by the Act or the adjudicator.

Adjudicator’s decision

What the Adjudicator must consider

The adjudicator *must* consider the provisions of the BIF Act, the contract, the payment claim, the payment schedule, the adjudication application, and the adjudication response (and all submissions and evidence properly included within them).

Adjudicator’s decision

What the Adjudicator must not consider

The adjudicator *must not* consider an adjudication response that was not served on time. They also *must not* consider any reasons for withholding payment that were not included in the payment schedule. This is the key "four corners" doctrine of security of payment.

Adjudicator’s decision

Timing of decision

An adjudicator must make their decision within 10 business days of receiving the adjudication response, or within a longer period if agreed by the parties. This tight timeframe is a key feature of the "pay now, argue later" regime.