What is an Appropriate Contractor's Licence in Queensland?

Monday, 7 April 2008

Contractor's and property developers commonly attempt to avoid payment of a payment claim on the grounds that the contractor or subcontractor is not properly licenced to do the work.

Queensland contractors' licencing is much more comprehensive than other Australian states.  A contractor moving to Queensland (or resident here) can easily get caught out undertaking work for which it is not licenced.  But what is a licence for the purpose of the BCIPA (Payment's Act)?

We now know that an unlicenced contractor can not successfully use the Payment's Act to get behind the payment penalties imposed by the QBSA (Licencing Act), but what is the meaning of "appropriately licenced" for the purpose of getting paid under the Payment's Act?

The Queensland Court of Appeal recently clarified the definition of an "appropriate" class of licence for the purposes of the Payment's Act, in favour of the subcontractor (Greg beer t/a G&L Beer Covercreting Pty Ltd v JM Kelly (Project Builders) Pty Ltd.)

Essentially, working within your licence class, but outside conditions imposed on your licence will not prevent you from getting paid.

Briefly, the subcontractor held a current Queensland licence under the class "Painting and Decorating", grade "Trade contractor licence".  The licence was endorsed with the condition "Restricted to residential spray on painting only".

The subcontractor undertook work which was within its licence class and grade, but outside the "residential" condition of it's licence.

The head contractor attempted to resist an application for payment on the grounds that the subcontractor did not hold an "appropriate" class of licence, which it effectively said was "Painting and Decorating Restricted to Residential Spray-on Painting"

The district court judge agreed that the subcontractor was not appropriately licenced for the purposes of the payment provisions of the QBSA Act. The subcontractor decided to appeal the decision.

The appeal judges gave very careful consideration to the definitions under the QBSA Act.  A contractor who does not hold the appropriate class of licence is not entitled to be paid for its work (except for the cost of materials and labour properly incurred).  However, they decided that, whilst there are separate penalties for contractors breaching licence conditions, the conditions are not part of the definition of the licence class, which is "Painting and Decorating".

This decision clarifies and simplifies the definition of an appropriate class of licence for the purposes of the Payment's Act, although the jury is still out on how adjudicator's should respond to licencing issues.

The best course of action is to make sure you are properly licenced to do the work that you undertake.  Do not be taken in by the "she'll be right, mate" from a customer who is looking for a cheap price.  There is a very good chance they will attempt to use a licencing issue to avoid final payment.