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Queensland Courts Reinforce Need for Specificity in Payment Schedules Under BIFA

Case note on Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171 and Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333

Executive Summary

The Queensland courts have confirmed that a payment schedule under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) must still clearly set out specific reasons for withholding payment. Although a payment schedule does not need to be a lengthy or formal document, it must still comply strictly with the statutory requirements.

The principles applied in Queensland reflect the reasoning of the New South Wales Court of Appeal in Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171, as well as the Queensland Supreme Court’s decision in Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333.

Courts in Queensland will not infer reasons from earlier correspondence or from background context.
A valid payment schedule must:

• clearly indicate what is being disputed, and
• clearly indicate why it is being disputed,
• within the four corners of the document itself.

Background

The facts in Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171 involved the following:

• A payment claim for $106,166.50 was served.
• Within 10 business days, Style Timber responded with a short email stating:

“I will show you the working agreement… many emails, photos, videos, back charges from builders and other trades, complains from my clients. You will understand why I can’t pay you… The damages you done is more than what you claimed.”

• No actual reasons were stated within the email itself.
• The claimant sought summary judgment on the basis that no valid payment schedule had been provided.
• The District Court entered judgment for the full amount.
• Style Timber appealed, arguing the email was a payment schedule.

The Decision

The Court of Appeal dismissed Style Timber’s appeal. The Court held the email did not contain sufficient detail to constitute a valid payment schedule.

Key findings included:

• A payment schedule does not need to be formal, but that is not a licence for vague or generalised objections.
• If referring to other documents, the claimant must not be left to guess:
  • which documents are being referred to,
  • which parts of the documents contain the reasons.
• General complaints or vague dissatisfaction do not satisfy the requirement for “reasons”.
• A respondent cannot rely solely on contractual administrative requirements (e.g. missing certificates) as a reason to reject the substance of a payment claim.

The Queensland Position

The Court of Appeal expressly referred to the Queensland decision:

Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333

In Minimax, the respondent sent an email responding to one item only out of several in a payment claim.

The Queensland Supreme Court held:

• If a payment schedule addresses only part of a payment claim, it is invalid.
• A valid payment schedule must:
  • respond to every item in the payment claim,
  • state the amount proposed to be paid for each item (even if $0),
  • provide specific reasons for withholding payment.

This remains consistent with ss 69 – 72 of BIFA, which adopts the same structure as the former BCIPA provisions and the equivalent NSW regime.

Key Takeaways

If you receive a payment claim in Queensland:

1. Always serve a payment schedule – even if you believe the claim is invalid.

Silence exposes you to summary judgment.

2. A valid payment schedule must:

• identify the payment claim,
• state the amount proposed to be paid (including $0),
• provide all reasons for withholding payment,
• address every line item of the claim.

3. Avoid vague statements such as:

• “We are not paying this.”
• “We will pay when works are complete.”
• “Refer to our earlier emails.”

These will not be accepted as valid reasons.

4. Do not rely on external documents unless specifically referenced with precision.

If you refer to another document, you should:

• attach it, or
• identify it with sufficient clarity.

5. Silence on any part of the claim risks the payment schedule being deemed invalid

Under Queensland law, failure to address even one component of the claim may invalidate the entire payment schedule.

We’re Here to Help

We at Chamberlains understand the emotional and financial stress that come with litigation. Should you require further information about how costs can be recoverable in matters before the Federal Court and Federal Circuit Court, please do not hesitate to contact our office for a consultation with our construction law team.