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Case Study on Construction Law

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Added on  2020-05-08

Case Study on Construction Law

   Added on 2020-05-08

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CONSTRUCTION LAWSecurity of Payments Act (ACT) – Applying for Adjudication(Building & Construction Industry Security of Payment Act (ACT), 2009)Those operating in the construction and building industry undertaking any type ofconstruction of building work or even those connected with the supply of the relatedgoods and services will commonly include the following notation on their tax invoices:"This is a payment claim made pursuant to the Building and Construction Industry(Security of Payment) Act 2009 (ACT)”.Insertion of these words on the tax invoice is considered by many in the business orsupply in the construction industry that, the mere insertion of these words, they canmake their tax invoices compliant to the payment claims under the application of theabove said Act. KEY CONCEPTSAlthough, in my opinion, being a legal professional and working in the capacity of aconsultant for different organisations operating in this industry, there are other keyconcepts1 and information which have more mandatory requirement for making apayment claim more effective and lawfully binding under the Act in discussion. Theseinclude:A clear and concise identification of the parties involved.A clear mention of the Reference Date.A complete and concise identification of the work on behalf of which the claimis filed.I am briefly describing these key concepts, so that they can be understood in the contextof this Case Study.1 Key Concepts for Payment Claims under the Building and Construction Industry (Security of Payment) Act (ACT), 2009 can be viewed in detail onhttps://www.mba.org.au/news-and-media/ibuilder/article/key-concepts-for-payment-claims-under-the-building-and-construction-industry-security-of-payment-act-2009-act/
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Identification of PartiesAs the requirements are specified for creating a valid tax invoice for the purpose ofGST, similar conditions apply in the case of payment claims under the specified Act.The foremost legal requirement is to clearly and accurately establish the identity of theconcerned parties and to specify their roles in the transaction which is being referred oin the claim documents. Parties involved include the claimant, the respondent and all theother suppliers and technical professionals along with their identification details, such astheir ACN/ABN, registered address, GST Details and other relevant information2.CASE STUDY:In this case study, the Claimant is M/s. Schmicko’s Pty Ltd, ABN-10 987 654 321through its sole owner Mr. Mick Morton. The Respondent is M/s. Jpordie’s Joint PtyLtd of 123 Bunda St, Canberra City ACT 2601 through its sole owner Mr. Jordie Jones.Reference DateThe Act has the provision of specifying the reference date mentioned in the constructioncontract. The claimant is entitled to claim payment for all works undertaken and towhich the Act relates. It is essential that in the payment claim the claimant must clearlystate the correct and applicable reference date so as to make the claim valid3. CASE STUDY:In this case study, a Contract Document executed between Mick Morton on behalf ofSchmicko’s Pty Ltd and Jordie Jones of Jordie’s café Pty Ltd specifying the works to beundertaken by the claimant and the finishing date was specified as 1 December.Payment schedule was fixed at 1st day of the month.Identification of WorksIt is essential that in the payment claim, a clear identification of the construction workor the related goods and services be made to which the claim is related. This mustinclude the periods during which the claimant attended to the works, the location of theworks and the claim amount4.CASE STUDY:In his acknowledgement letter of 1 Oct 2016, Mick clarified that the work related torefurbishment of Jordie’s café as per the plans given by the Architect Josh Jones (who isincidentally brother of Jordie) at the address specified as 123 Bunda St, Canberra City2Unit Constructions Company Ltd vs Bullock (1959) 3 All ER 831. p 53De Beers Consolidated Mine Ltd vs Howe [1906]. p 74Cardens Case (1938) 63 CLR 108. p 8
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ACT 2601. The total value of the work was agreed at $220,000, inclusive of GST of$20,000.CLAIMANT’S ARGUMENTS IN FAVOUR OF THE ADJUDICATIONA Brief of the AdjudicatorAustralian Solution Services of Regus Miranda Level 1, 29 Kiora Road, MirandaNSW 2228has been in the Adjudication Field for more than a decade and has on itspanel, a small but highly qualified, team of adjudicators whose success is linked withtheir expertise and professionalism gained over years of practice. Mr.Jon Facey(Adjudication Manager) has beenappointed as the Adjudicator in this case and he willproceed ahead and give step-by-step explanation and guidance of the Adjudicationprocess, as detailed below, to the Claimant.1.ACT Adjudication Factors: Adjudication ApplicationThis an application made to an ANA selected by the Claimant and a copy is forwardedto the Respondent.CASE STUDYMick Morton, acting on behalf of the Claimant Schmicko’s Pty Ltd has appointed M/s.Australian Solution Services of Regus Miranda Level 1, 29 Kiora Road, Miranda NSW2228 as its Authorised Nominating Authority (ANA) in this matter. In order to furtherthe Adjudication Process, after Notice u/s 19(2) Division 4.2 of the Building &Construction Industry Security of Payment Act (ACT), 2009 has been served to theRespondent (Jordie’s Café Pty Ltd) by the Claimant (Schmicko’s Pty Ltd), the next stepfor the Claimant is to move an Adjudication Application to the selected ANA, with acopy being forwarded to the Respondent5.Since the claimant has not received any payment from the Respondent and theRespondent has denied any due payment is payable to the claimant in the PaymentSchedule sent by it, an application of adjudication, using the Adjudication ApplicationForm shown in ANNEXURE-01 in the attached FOLDER, has been filed withAustralian Solution Services, the ANA.5Unit Constructions Company Ltd vs Bullock (1959) 3 All ER 831. p 5
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