We understand how tough it can be to run your own building and construction business, from the measure and quote to signing the contract, then organising and completing the job, we know you don’t need headaches when it comes to pay day.
A recent case of Dart Holdings Pty Ltd (t/as Dart & Co) v Total Concept Group Pty Ltd and Ors [2012] QSC 158 shows how important the little things can be when it comes to getting paid. In this case, Dart & Co were contracted to work on a site in Brisbane. Dart & Co subcontracted to Total Concept to supply and install certain items on the site, worth over $1.3 million.
Total Concept didn’t receive the final payment of $189,788.86, and they served a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”). Dart & Co delivered a payment schedule, and then Total Concept took the next step in the process, and made an adjudication application.
The adjudicator decided that Dart & Co should pay Total Concept $141,174.44 including GST. Dart & Co didn’t agree and the matter progressed to the Queensland Supreme Court.
Dart & Co argued that the contract with Total Concept was not enforceable because Total Concept did not have the proper licence under the Queensland Building Services Authority Act 1991 Qld (“QBSA Act”) to undertake some of the work on the contract and variations. They also argued that because of this, the BCIPA didn’t apply and that Total Concept was not entitled to receiving a payment for the work.
The judge agreed with Dart & Co, and held that the contract was unenforceable because Total Concept did not hold a Glass, Glazing and Aluminium licence when they entered the contract, and was therefore not entitled to make a payment claim under the BCIPA. Total Concept were not paid for the work and lost over $100,000 as a result.
The lesson learnt from this case is to refresh your memory about the scope of work which is permitted under your licence. We understand that most tradesmen are capable of doing much more than what the licence permits.
Although, whether it be Bricklaying and Blocklaying, Concreting, Carpentry, Glass, Glazing and Aluminium, Gasfitting, Joinery or a Roof Tiling, each trade has a limit.
The contract between Dart & Co and Total Concept referred to work on “Shopfronts, Windows, Doors & Screens Specific Requirements”. In the description of the work, it specifically said that Total Concept were to “allow for the supply and installation of aluminium framed & glazed window and door systems…”, and “glazed shopfronts”, and “full height glazing to ground floor light box” and “all other aluminium framed and glazed windows, doors and shop fronts as may be documented”. The variations included work such as “reinforcing mullions to create a structural glazed element to support jamb between window frame and column” and “changing window to frameless structural glazing and stiffening aluminium mullions to create structural window support frame” and “supply and install glass awning including design, engineering, fabrication, etc…”.
The Judge acknowledged that carpenters receive training for work with glass, although still found that some of the work done by Total Concept, in relation to the glass work, should have been done under the Glass, Glazing and Aluminium licence. One of the reasons the judge gave, was because carpenters most work with wood and generally “install” and “construct”, rather than “fabricate” glass.
This case also reminds us of the importance in drafting your contracts correctly. Total Concept lost money not only for unlicensed work, but because their contract did not include a severability clause. A severability clause is worded in a way which allows for void or unenforceable parts of a contract to be cut out, whilst allowing the rest of the contract to remain in full force. The contract between Dart & Co and Total Concept did not allow for severability, and to make matters more complicated, the contract was valued with a lump sum price, rather than being itemised.
If the contract includes an itemised quote or pricing schedule and a severability clause, it is more likely that the unenforceable conditions in the contract would have been struck out (being those describing the unlicensed work and the cost of those works), and Dart & Co would have been liable to pay for the rest.
Some tradesmen feel comfortable with the thought that they have a right at law to recover for materials when they are found working unlicensed. But this case emphasises the difficulties and expense you may incur in bringing an action to retrieve that money.
Let us help you work smarter and not harder, call Kerry Kennell on 07 4944 2000 and learn more about how to protect you and your business in the building and construction industry.
