Your Payment Claim Is Invalid. And You Probably Do Not Know Why.
The Payment Chain: Security of Payment in Queensland — Part 1
What This Article Covers
Queensland's Building Industry Fairness (Security of Payment) Act 2017 (Act) gives builders, subcontractors, other trades, and suppliers a powerful tool for recovering unpaid progress payments quickly. But that tool only works if you follow the rules exactly.
This article explains what makes a payment claim valid under the Act, where claims most commonly fail, and what the consequences of an invalid claim actually are. It is the first in our three-part series on security of payment in Queensland's construction industry.
What the BIF Act Is Designed to Do
The Act was introduced to keep cash flowing through the construction payment chain. Rather than waiting years for Court (or QCAT) proceedings, a builder, trade or subcontractor can serve a payment claim, receive a payment schedule in response, and refer any dispute to adjudication for a fast, binding interim determination.
The scheme is deliberately rapid. But speed comes at a cost: the Act operates within strict procedural requirements, and failing to meet them can strip a claimant of the very protections the Act is meant to provide.
If your payment claim is defective, the adjudication process is unavailable to you. You are left with your contractual rights and legal proceedings, which are slower, more expensive, and without the cash flow protection adjudication provides.
The Three Elements of a Valid Payment Claim
Under section 68 of the Act, a payment claim must be a written document that:
- identifies the construction work or related goods and services to which the progress payment relates;
- states the amount of the progress payment being claimed;
- requests payment of that amount; and
- includes the other information prescribed by the regulation.
Each element must be satisfied. Missing any one of them creates a real risk the claim will be found invalid.
Identifying the Work
The claim must clearly describe what it is for. Generic descriptions such as "site works", "preliminaries", or "variations to date" without further detail create a significant risk of challenge.
In Iris Broadbeach Business Pty Ltd v Descon Group Australia Pty Ltd & Anor [2023] QSC 290, the Queensland Supreme Court declared an adjudicator's determination void on the basis that the underlying payment claim was invalid. The items claimed had not been sufficiently particularised. The Court held that each component of a trade breakdown must be described clearly enough to communicate what work is actually being claimed for.
In practice, this means describing what was done, when, and for which part of the project. If you are working across multiple lots or units, identify the specific property in each line item. If you are claiming variations, identify each one separately.
Requesting Payment
The claim must include a request for payment. Section 68(3) of the Act provides that a written document bearing the word "invoice" is taken to satisfy this requirement.
In practice, the safest approach is to use the words "TAX INVOICE" and to also include an express statement that the document is a 'payment claim under the Building Industry Fairness (Security of Payment) Act 2017'. The first satisfies section 68(3). The second removes any ambiguity about the statutory regime under which the claim is being served.
Stating the Amount
The claimed amount must be stated clearly in dollars and cents. All figures must be internally consistent, the line-item breakdown must reconcile with the total. Errors or inconsistencies give the respondent grounds for challenge.
Note also that claims above $750,000 are classified as "complex claims" under section 64 of the Act, which affects the timeframes available to the respondent for issuing a payment schedule.
Reference Dates: The Threshold Requirement
Before you can serve a valid payment claim, you need a valid reference date.
Under section 67 of the Act, a reference date is the date from which a progress payment entitlement arises. It is either the date specified in the contract for making payment claims, or if the contract says nothing, the last day of the month in which the work was first carried out, and the last day of each later month.
Section 70 of the Act provides that a payment claim must be served on or after the reference date. Serving early invalidates the claim. Deeming provisions in the contract that attempt to treat an early claim as if it were made on the reference date do not override the operation of the Act.
Only one payment claim can be served from each reference date. Unpaid amounts from previous claims can be included in a later claim served from the next reference date.
The Six-Month Window
Progress payment claims cannot be served indefinitely. Under section 75(2) of the Act, a claim must be served before the end of whichever is the longer of:
- the period for making claims under the construction contract; or
- six months after the construction work to which the claim relates was last carried out.
Once that window closes, the right to pursue the claim through adjudication is gone. A contractual or common law claim remains, but it requires court proceedings; a significantly slower and more expensive process.
Service: Getting It Right
A well-prepared payment claim can still be defeated by defective service.
The claim must be served on the correct respondent using a method permitted by the contract. The date and time of service is the trigger for every subsequent timeframe under the Act, including the respondent's 15 business days to issue a payment schedule.
Proof of service is important. If you hand deliver, obtain a signed receipt or take a photograph. If you email, save the sent email and request a delivery or read receipt. If you post, use registered or express post with tracking.
If the date of service is disputed and you have no contemporaneous evidence, your position is weakened before the substantive dispute has even begun.
What Happens If the Claim Is Invalid
The consequences of an invalid payment claim are serious:
The adjudication determination may be declared void. As Iris Broadbeach v Descon Group [2023] QSC 290 demonstrates, a court can declare a determination void where the underlying claim did not meet the Act requirements. Any amount paid under the determination may need to be returned while the dispute is re-litigated through the courts.
Access to adjudication is lost. Without a valid payment claim, the Act's adjudication mechanism is unavailable. You are limited to your contractual and common law rights.
The respondent gains tactical leverage. A defective claim allows the respondent to challenge the foundation of the dispute rather than its merits, a significant advantage for the party that has not paid.
A Note on Licensing
Contractors performing licensable building work must hold the appropriate QBCC licence. Under section 42(4) of the Queensland Building and Construction Commission Act 1991 (Qld), unlicensed contractors cannot access the Act or adjudication. Their recovery is limited to cost of labour and materials only, with no profit component, regardless of how much work was completed or its quality.
Before You Serve: Use the Checklist
Odyssey Legal has produced a BIFA Payment Claim Checklist that works through every stage of the BIF Act payment claim process; from contract setup before work starts through to service and the steps that follow.
Key issues to address before every claim:
- Confirm the reference date and that no claim has already been served from it;
- Use "TAX INVOICE" and include a statement that 'This is a payment claim under the Building Industry Fairness (Security of Payment) Act 2017';
- Identify the construction contract clearly by project name, address, and contract date;
- Describe the work specifically, not by category but by what was done, when, and where;
- State the amount in dollars and cents with a consistent breakdown;
- List any previous payments received;
- Check the six-month window has not closed;
- Serve on the correct respondent using the method permitted by the contract; and
- Record and retain proof of service immediately.
Next in the Series
Part 2 covers what happens when the respondent does not serve a payment schedule at all: the rights that crystallise, the strict deadlines for acting, and the mistakes that most often cost claimants their position.
Get Advice Before You Claim
Payment claim disputes involve strict timeframes and technical requirements. An error at the claim stage can close off your rights entirely before the substantive dispute is even engaged.
Odyssey Legal acts for builders, subcontractors, and suppliers across Queensland in security of payment disputes, adjudication proceedings, and BIF Act enforcement. Contact us for a free initial consultation.
Phone: (07) 5370 8759
Email: info@odysseylegal.com.au
Online: odysseylegal.com.au/contact
Frequently Asked Questions
What happens if I serve a payment claim before the reference date?
The claim is invalid. The reference date is a jurisdictional threshold. A claim served early cannot be salvaged by a deeming provision in the contract.
Can I serve more than one payment claim from the same reference date?
No. Only one payment claim is permitted per reference date. A second claim from the same date is invalid.
What if my contract does not specify reference dates?
The BIF Act default applies: the last day of the month in which the work was first carried out, and the last day of each later month.
How long do I have to serve a progress payment claim?
The longer of the period specified in your contract or six months after the work to which the claim relates was last carried out.
Does an invalid payment claim mean I cannot recover the money at all?
Not necessarily. You retain your contractual and common law rights, but you lose access to adjudication. Recovery through the courts is slower and more expensive.
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