Subcontractor & Supplier Claims

Subcontractors' Charges Act Protections

The Subcontractors' Charges Act 1974 (Qld) provides a powerful mechanism for subcontractors and suppliers to secure payment by placing a charge over money payable to the head contractor by the principal. To lodge a valid charge, the subcontractor must serve a notice of charge within three months after the work was last performed or materials were last supplied. The charge attaches to the unpaid portion of the head contract proceeds and gives the subcontractor priority over other unsecured creditors of the head contractor. This is particularly valuable when the head contractor becomes insolvent or is delaying payment. The process requires strict compliance with the Act's requirements, including correctly identifying the principal, head contractor, and contract details, and serving the notice within the prescribed timeframe. Once a charge is lodged, the principal must retain sufficient funds to satisfy the charge when making payments to the head contractor. Our team prepares and serves charge notices promptly, ensures strict compliance with legislative requirements, and takes enforcement action through the District Court of Queensland if the charge is not satisfied.

Payment Claims and Supporting Statements

The BIF Act requires head contractors to provide supporting statements when serving payment claims on principals. Supporting statements list all subcontractors and suppliers who have supplied labour, materials, or services in connection with the project and confirm that all amounts due to subcontractors have been paid. This transparency mechanism is critical for protecting subcontractors because it enables principals to make direct payments to subcontractors if the head contractor fails to pay. For subcontractors, preparing a compliant payment claim under the BIF Act involves identifying the correct reference date, describing the work performed, and stating the amount claimed. The claim must be served on the party immediately above in the contractual chain. Subcontractors also have the right to suspend work if a payment claim is not paid or a payment schedule is not provided within the statutory timeframe. Our team assists subcontractors with preparing compliant payment claims, reviewing supporting statements for accuracy, and exercising suspension rights when necessary to apply commercial pressure for payment.

Project Bank Accounts and Retention Sums

Project bank accounts (PBAs) under Part 3 of the BIF Act apply to qualifying government projects with a contract value of $1 million or more and private sector projects valued at $10 million or more. PBAs require the principal to establish a project trust account into which all payments for the project are made. The trustee must then distribute payments promptly to head contractors and subcontractors in accordance with the payment distribution statement. This framework ensures that funds are held in trust for subcontractors and cannot be used by the head contractor for other purposes. Our team advises subcontractors on their rights under the PBA framework, including entitlement to progress payments from the project trust account, review of payment distribution statements, and mechanisms for disputing distributions. We also advise on retention sum trust requirements, which require head contractors to hold retention amounts in trust accounts for the benefit of subcontractors. Understanding these trust account protections is essential for subcontractors seeking to minimise payment risk in Queensland's construction industry.

Subcontractor & Supplier Claims FAQs (Queensland Law)