Building Disputes · Additional Resources

Attention Builders' Sub-Contractors

The Act

The Queensland "Sub-Contractors' Charges Act 1974" allows sub-contractors to obtain payment direct from the employer, rather than the head contractor, after providing the required notices to both the employer and the head contractor which creates a charge over monies due. This has significant advantages to the sub-contractor in circumstances where the sub-contractor has concerns about delays in payment of sub-contract work or in circumstances where the head contractor is in financial difficulty and facing possible bankruptcy or liquidation which may result in a sub-contractor recovering little, if any, monies for sub-contract work.

The following is a short summary of the more important sections of the Sub-Contractors' Charges Act so that you may be aware of its application and the appropriate circumstances where you may require to have our Firm draw the necessary notices and Court documents if required.

Work

"Work" defined by the Act and upon which a charge can be made includes work and labour and the manufacture or fabrication of project specific components, but does not include:-

Notice

Section 10 states that a sub-contractor who wishes to claim a charge on money payable under his contract with the head contractor shall give written notice in the required form specifying the amount and particulars of claim and certified by a qualified person. Such notice must be served on the employer and the head contractor and any person who holds a security for the contract. The notice must be given within three (3) months of the completion of work by the sub-contractor and even if the work is not completed. A notice of claim in respect of retention money only must be given within three (3) months after the expiration of the period of maintenance. Notices given after the relevant three month time limit are not valid and cannot be enforced.

Section 10A defines qualified persons to include architects, professional engineers, registered builders and quantity surveyors.

Section 11 of the Act requires an employer to whom a notice is given to pay the monies to the sub-contractor direct or, alternatively, if the monies are in dispute the employer and/or the holder of any security must pay the monies into Court until such time as the dispute is resolved. An employer or security holder who fails to retain the monies referred to in the notice is personally liable to the sub-contractor for the relevant amount of the claim.

Court Proceedings

Section 15 states that if a dispute arises in respect of the monies, the subject of the notice of claim and if such a dispute is not resolved within one month after the notice has been given proceedings must be brought in a Court of Law to resolve the dispute, otherwise the notice has no force and effect.

If a sub-contractor should fail to commence legal proceedings within the necessary time limit after a notice is issued, the sub-contractor may still be able to pursue his claim only if another sub-contractor has given the necessary notices and commenced legal proceedings within the required time limit. The first sub-contractor does this by applying to a Court for an order that his claim be joined in the claim of the second sub-contractor as provided by Section 13 of the Act.

It is important to obtain prompt and specialist legal advice from a solicitor if you are considering taking any steps to pursue a subcontractors’ charge.



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