7 January 2019
On 17 December 2018, chapter 4 of Building Industry Fairness (security of Payment) Act 2017 (Qld) (BIF Act) commenced, resulting in the Subcontractors Charges Act 1974 (Qld) (SC Act) being repealed. With the new legislation has followed some changes that effect those both issuing and receiving notices of claim under the BIF Act.
Change of definition of works
Under the SC Act, the right for subcontractors to issue a Notice of Claim of charge (Notice of Claim), had a specific limitation to the definition of “works”, with the insertion of the words upon land.
SC Act s3 read as follows:
““Works” includes work or labour, whether skilled or unskilled, done or commenced upon the land where the contract or subcontract is being performed by a person of any occupation in connection with—
(a) the construction, decoration, alteration or repair of a building or other structure upon land; or
(b) the development or working of a mine, quarry, sandpit, drain, embankment or other excavation in or upon land; or
(c) the placement, fixation or erection of materials, plant or machinery used or intended to be used for a purpose specified in paragraph (a) or (b); or
(d) the alteration or improvement of a chattel;”
(emphasis added).
Section 105 of the BIF Act removes this limitation – potentially broadening the scope of works claimable:
“(1)”Work” for a contract—
(a) means labour, whether skilled or unskilled, carried out by a person in connection with—
(i) the construction, decoration, alteration or repair of a building or other structure; or
(ii) the development or working of a mine, quarry, sandpit, drain, embankment or other excavation in or on land; or
(iii) the placement, fixation or erection of materials, plant or machinery used or intended to be used for a purpose mentioned in subparagraph (i) or (ii) ; or
(iv) the alteration or improvement of a thing; or
(v) the demolition, removal or relocation of a building or other structure …”
Notice of Claim – new definitions and new forms
Under section 122 of the BIF Act, similar to section 10 of the SC Act, a subcontractor intending to claim a charge must issue to the person liable to pay the contractor a Notice of Claim in the approved form[i] detailing the subcontractors’ intent to claim a charge over the monies payable to the contractor. A subcontractor must also provide the same Notice of Claim to the contractor, along with identifying and providing details of the persons served with the Notice of Claim.
The Notice of Claim must:
As with section 10 of the SC Act, the Notice of Claim can be issued prior to the completion of the works, and if the works are completed must be issued within 3 months of the date of completion.
The BIF Acts also separates and appears to simplify the steps needed to be taken by a subcontractor in issuing a Notice of Claim:
New Offence Created
Under section 128 of the BIF Act there is now a requirement for a contractor in receipt of a Notice of Claim to respond in writing to both the person given the notice of claim and the subcontractor within 10 business days of being given the notice of claim as to whether they dispute or agree (in whole or part) with the claim. A failure to respond by a contractor within 10 business days is an offence and carries a maximum penalty of 20 penalty units.
Conclusion
The process for a subcontractor claiming has been simplified, but largely remains the same.
The main differences are the expansion of the definition of works, the establishment a more onerous timeframe and requirement on contractors to respond to subcontractors’ Notice of Claim or have them deemed to commit an offence under the BIF Act.
Proceedings to enforce a subcontractors’ claim under s136 of the BIF Act remains in essence the same. The timeframes are as follows:
If you need clarification on the changes and/or need assistance with making a claim under the BIF Act please contact Nathan Kuster or Michelle Kelly in the JHK Legal Brisbane office on 07 3859 4500.
[i] Ibid s 122 (2).
Written By Associate, Nathan Kuster