The Queensland Supreme Court recently handed down its decision in KDV Sports v Muggeridge Constructions, of which builders need to take careful account when preparing payment claims.
Muggeridge, a builder, proceeded to adjudication seeking $2.3M on its payment claim and was awarded $800,000. KDV, the owner, then applied to the Court and set the adjudication decision aside.
The owner’s key argument was that the payment claim failed to identify the work done which was the subject of the payment claim and the Court agreed.
The Court concluded that:
There is no description of the work which is the subject of the claim. References to the total percentages of work claimed to date and the amount the subject of the claim does not sufficiently identify the work done.
When making a payment claim, builders must provide sufficient detail of the work for which they are claiming. A bare trade breakdown with a “percentage complete” claim may not be a sufficient description of the work. Unless a builder commences an adjudication on the correct jurisdictional footing, the whole process can ultimately unravel as occurred in this case. Not only did the builder miss out on payment, it had to fund the defence of a court proceeding and, because it was unsuccessful, had to also pay the owner’s legal costs on a standard basis.
Conversely, when a builder is defending a poorly detailed payment claim from a subcontractor, it is sensible to raise a ground on this basis.
This article contains general information and is not legal advice and you should not rely on this information. You should seek professional advice specific to your circumstances.
If you have any questions or if we can be of assistance with any of the above, please contact Frank Nardone or Tony Scoglio on 07 3833 2100 or firstname.lastname@example.org.