The Default
Many parties availing themselves of the adjudication process under BIF are finding that they are being awarded interest pursuant to the Civil Proceedings Act 2011 rather than section 67P of the Queensland Building Services Authority Act 1991.
The reason is that the Civil Proceedings Act interest is the default and the parties have not pleaded and evidenced entitlement to 67P interest.
Remember, the adjudicators are not investigators. They can only make decisions on material that is before them. Just because the work is within the scope of the BIF Act does not mean it is also within the scope of the relevant definitions of the QBCC Act.
That is why an applicant's entitlement to 67P interest must be clearly set out in submissions and the attached evidence.
Pleading the contract
The starting point is section 67P of the QBCC Act 1991.
The section provides for two possible scenarios. The first is that interest is provided for in the contract at a rate that is greater than the rate specified in section 67P. The second scenario relates to a circumstance where the contract does not provide for interest, the amount specified is less than the 67P interest or the relevant part of the contract is inoperable for some reason.
There is also the pedantic point that section 67P only enables reference to be made to the rate specified in the contract in circumstances where the contract rate is greater than the 67P rate. While a significant number of contracts attempt to mimic the terms of section 67P, they are in fact only providing for interest that is equal to section 67P. Therefore the interest will be statutory and not contractual.
In the first scenario you have to plead the relevant clause of the contract and point out that it is greater than the provisions in section 67P.
In all other circumstances you will need to plead the full statutory trail that leads to the right to claim section 67P interest set out below.
Pleading the legislation
Set out below are the pleading points that you need to make in order to substantiate a claim for section 67P interest.
Although it may seem to be a pain just to claim some interest, the reality is that most of these points have to be addressed in order to be able demonstrate that the matter is within the scope of the adjudication scheme in the first place.
Building Industry Fairness (Security of Payment) Act 2017 ("BIF Act")
The starting point is section 73 of the BIF Act.
73(2) sets out the default provisions of interest under the Civil Proceedings Act or the interest rate specified in the contract.
73(3) enables 67P interest if the contract was a building contract under the Queensland Building Services Authority Act 1991.
Queensland Building and Construction Commission Act 1991 ("QBCC Act")
Section 67P is in part 4A of the QBCC Act.
Section 67A contains certain definitions for the purposes of part 4A.
The definition of "Building Contract" refers to section 67AAA
Section 67AAA sets out the three main criteria that must be met with respect to the work performed pursuant to the contract in that the work must:
- be "building work"; AND
- NOT work the subject of a "Domestic Building Contract" AND
- NOT a contract that is exclusively "construction work" work that is not "building work"
The key definition is Building Work and the exclusions from that definition
.
As to the scope of the exemptions from the definition of the definition of Domestic Building Contract click here.
"Construction work" is defined to be set out in section 65 of the Building Industry Fairness (Security of Payment) Act 2017