SUBSEQUENT PAYMENT CLAIMS CAN NOT BE IDENTICAL TO A PREVIOUS PAYMENT CLAIM

Monday, 7 April 2008

The Queensland Supreme Court held that a second or subsequent payment claim under the BCIPA cannot be identical to any previous payment claim.

Identical payment claims are not capable of establishing the jurisdiction of the adjudicator and consequently any adjudication decision will be invalid.

Facts:
Doolan and Anor v Rubikcon [Qld] Pty Ltd and Ors QSC 07-168

The adjudication application arose out of a contract between Doolan and Rubikcon for the construction of townhouses.  Rubikcon sought payment of a 'final claim" for an amount of $43,533.82.  The identical amount had been previously claimed as a final claim.  An application based on the first payment claim was refused by an adjudicator because it was out of time.  The subsequent payment claim was noted as being "re-issued".

Rubikcon sought adjudication of the subsequent payment claim and the adjudicator determined in favour of Rubikcon, noting that the second payment claim was subject to a later reference date, therefore giving the adjudicator jurisdiction to adjudicate the claim (in his view).

The Supreme Court

Doolan sought a judicial review of the adjudicator's decision on the grounds of an error of law and breaches of the rules of natural justice.  Rubikcon submitted that, under s17(6), it was entitled to submit a payment claim for the same amount in a subsequent payment claim.

The judge found that 'there is a one to one" relationship between the claim made and the reference date on which it is made".  His Honour noted that the Qld Act "does not prevent the claimant from including in a payment claim, an amount that has been subject of a previous claim".  "Subsection 17(6) permits also the inclusion of an amount which has been the subject of a previous claim but that does not mean that a previous claim can be the sole item included in the later claim"

In this case, the second claim was identical to the first and his Honour stated "In my judgement therefore,the claim was not capable of founding the jurisdiction of the adjudicator and consequently the order made by him was invalid.

The judge also noted that clause 17.1 of the QMBA Standard Form contract deals expressly with the question of a final claim and this section did terminate the running of reference dates.  Consequently once a claim had been made under that clause, no further claim under the Act is possible, there being no further reference dates occurring.  the judge did not feel it necessary to test this argument, though he found it "attractive on its face......I do not see the provisions of the contract as being inconsistent with the Act in that regard.

Analysis

A contractor cannot issue successive identical payment claims, even if the reference date is different.  This may not, of course, be evident to an adjudicator, unless it was brought to his attention in the respondent's submissions.  There is now no scope for a decision to be overturned by judicial review, so it is an important issue when advising respondents.

However, a subsequent payment claim that includes the work of a previous claim can be valid if,-

it includes additional work,
includes an amount previously omitted from the payment claim,
includes a loss and expense claim under s33,
includes interest.

Adjudicators and advisers should also carefully consider the application of contract clauses relating to "final claims", in light of the judges remarks in this case, as to whether any claim made under the final claim provisions of a contract effectively extinguish a contractors rights to further payment claims under the Act.