The Subcontractors’ Charges Act – A Case Study
In this construction law blog, Paul Rojas discusses a recent case where the validity of a charge issued pursuant to the Subcontractors’ Charges Act 1974 (Qld) (“the SCA”) was considered.
Our client issued tax invoices in respect of its work. Unfortunately, the builder soon entered into Administration so our client issued a subcontractors’ charge pursuant to the SCA for the unpaid tax invoices to the developer. Several other subcontractors also lodged charges. The developer paid the funds into Court and the builder proceeded to issue a notice under the SCA certifying the full amount claimed by our client as owing.
Several of the parties commenced proceedings to secure their charges within the one-month time limit. Our client did not. These parties then successfully applied to have the proceedings combined and the funds paid out of Court. The Court retained an amount for our client’s claim.
Our client proceeded to obtain legal advice that his subcontractors’ charge had expired because he had not commenced proceedings within one month after the charge had been served.
We were subsequently engaged by our client to recover the funds paid into Court.
We were required to consider whether our client’s failure to commence proceedings within one month after service of the charge had caused the charge to become invalid.
Our client was fortunate in that the period the builder was in Administration stopped the one-month period from running. This period restarted once the builder entered into a deed of company arrangement.
During the period of the Builder’s Administration, several other subcontractors had also commenced proceedings to enforce their charges under the SCA. The effect of this was that:
- those proceedings were brought on behalf of every other subcontractor who had issued a charge under the SCA; and
- where the one-month period our client had to commence proceedings had not expired, our client was entitled to “piggy-back” onto those charges by joining the proceedings commenced by the other subcontractors.
However, our client was not able to simply commence fresh proceedings and apply to have them joined. It needed to identify which proceedings had been commenced within the one-month period and seek to be joined to them as a Plaintiff. Fortunately, those proceedings were the proceedings in which the developer had paid money into Court.
Rostron Carlyle Rojas Lawyer, Madison Lodder, appeared and successfully obtained orders for payment of our client’s charge.
The above illustrates the importance of engaging lawyers who understand the complexities of construction law and the operation of the SCA.
The RCR Construction team are able to assist in providing advice and strategies for recovery of claims made pursuant to the SCA. Contact our Construction team, please call us on (07) 3009 8444 or email us at [email protected]
The above information is intended only as general information and should not be interpreted or relied upon for legal advice.