The recent decision of the Supreme Court of Queensland in St Hilliers Property Pty Ltd v Pronto Solar Innovations Pty Ltd highlights the consequences that can result if Subcontractors are not licensed to carry out any aspect of work to be undertaken under a construction contract.
Subcontractors must ensure that you are licensed to carry out each and every item of work set out in the scope of works incorporated into a construction contract at the time of entering into the construction contact.
If you are not licensed to carry out any item of work, you are not entitled to any monetary or other consideration for doing any work pursuant to the construction contract.
This means that Subcontractors are not entitled to progress payments under section 7, 12 and 17 of the BCIPA. Therefore, any payment claim is invalid and of no effect under the BCIPA. Further, any adjudication determination made in favour of a Subcontractor not licensed to carry out work is void and of no effect and can be set aside.
The decision also highlights that in these circumstances, the Subcontractor will also be unable to issue valid charges under the Subcontractors Charges Act 1974 (Qld) (“the SCA”). This is because there is no payment due in accordance with the construction contract which a charge under the SCA could secure.
Therefore, a Subcontractor may be entirely unsecured and at risk of recovering nothing for work done in the event of the insolvency of the other contracting party.
If you require further information or assistance please contact Justin Mathews of our office on (07) 5574 0111 or email justinm@qbmlaw.com.au.
