The object of this legislative instrument is to provide a statutory remedy in the building industry by which a subcontractor can lodge a charge on monies payable by the employer to the contractor.
The Act applies only to the building industry for the performance of work done upon or in respect of, land or a building, or other structure or permanent improvement upon land or chattel under a subcontract.
An obligation defined in law. A business must comply with relevant services.
Definition of terms
with respect to an employer means:
a person who contracts directly with the employer to perform work; and
with respect to a subcontractor means:
a person with whom the subcontractor contracts to perform work.
A person who contracts with another person for the performance of work by that other person, or at whose request or on whose credit or behalf, with the person's privity and consent, work is done. This includes all persons claiming under the person whose rights are acquired after the work is commenced, and in relation to a subcontractor, includes the contractor or other subcontractor with and under whom the person has contracted. Note: a mortgagee who advances money to an employer is not deemed to be an employer by reason thereof.
- Qualified person
1. an architect registered in accordance with the Architects' Act 2002; or
2. a registered professional engineer under the Professional Engineers Act 2002; or
3. a quantity surveyor who is a member of the Australian Institute of Quantity Surveyors; or
4. a person licensed under the Queensland Building and Construction Commission Act 1991 to carry out, or supervise, work of the type to which the claim relates; or
5. a person with expert knowledge of the work to which the claim relates, who is accepted in a particular case as a qualified person by both contractor and subcontractor.
- Retention money
Any part of the contract price retained during the progress or after completion of the work the subject of a contract or subcontract as security for rectification of defects in the work during the period of maintenance provided for by the contract or subcontract, or to be payable after such rectification or on the expiry of the period of maintenance.
a person who contracts with a contractor or with another subcontractor for the performance of work.
Includes work or labour (whether skilled or unskilled), done or commenced on the land (where the contract or subcontract is being performed) by a person of any occupation in connection with:
the construction, decoration, alteration or repair of a building or other structure on land
the development or working of a mine, quarry, sand-pit, drain, embankment or other excavation in or on land
the placement, fixation or erection of materials, plant or machinery used, or intended to be used, for a purpose specified in (a) or (b) above
the alteration or improvement of a chattel.
The term also includes the supply of materials used or brought onto premises to be used by a subcontractor in connection with other work which is the subject of the contract or subcontract, but does not include:
Work is also defined to include work or labour, whether skilled or unskilled, done or commenced upon the land where the contract or subcontract is being performed by a person of any occupation in connection with a matter listed in paragraphs (a) to (d) of the definition above.
Work is also defined as the manufacture or fabrication wherever it happens, of project specific components for the contract or subcontract, and supply of labour for the contract or subcontract.
However, it does not include manufacture or fabrication of project specific components for the contract or subcontract if the components have not been fixed in place for the purposes of the contract or subcontract and the components could be used for other purposes, or if it consists of merely cutting something to size or mixing things together (e.g. to make concrete or asphalt).
the mere delivery of goods sold by a vendor under a contract for the sale of goods, to at or upon the land; or
work or labour done or commenced by a person
under a contract of service or
in connection with the testing of materials or the taking of measurements or quantities
the supply under a contract of hire of materials, plant or machinery not intended to be incorporated in the work.
- Security of Payment for Subcontractors (private sector contracts)
- Security of Payment for Subcontractors: QBCC (traditional construction contracts)
Before a subcontractor can claim a charge on money, the claim must be certified by a qualified person within the building industry, as defined in the Act.
If a claim is not accepted and paid it must be enforced by the subcontractor through the courts. Strict time limits apply to the lodging of a charge and to begin court action to enforce it.
Claims may also be made in respect of retention monies.
An employer who fails to retain the required monies is personally liable to pay the amount of the charge to the subcontractor.
A person who claims a charge vexatiously or without reasonable grounds is liable to pay compensation to another person who is affected prejudicially by the claim.
The Act is complex in its scope and in the procedure to be followed in claiming a charge. Subcontractors considering a claim should seek prompt legal advice before lodging a claim of charge.
In relation to Queensland Government traditional construction contracts there are certain provisions which further facilitate the provisions of this Act to provide a measure of security of payment for subcontractors.
Information relevant to securing payment for subcontractors in the construction industry through the Building and Construction Industry Payments Act 2004 can be obtained by contacting QBCC. The agency will also assist with inquiries regarding the operation of the Subcontractors Charges Act 1974.
See resources for downloadable Subcontractors Charges Act 1974 forms.
If a claim prejudicially affects another person it may be modified or cancelled by the court.
An appeal may be made against the decision of the court.
Minister for Housing and Public Works
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