Location: Brisbane, Queensland
Subcontractor: FRP Concrete & Dincel
A developer tried to squeeze a subcontractor with a 30% price cut and a loaded contract, then refused to pay. With Contract Aware in their corner, the subbie fought back, enforced their rights under Security of Payment, and recovered every cent.
Project
Subcontractor was contracted by a developer backed out of the Asia region for circa $450k for the dincel and concrete package on a town house development. The subcontractor was pressured into reducing their tender submission by 30% and given a take it or leave it ultimatum for signing a heavily altered contract in the favour of the developer.
Issue faced:
The subcontractor was never afforded a clean run on the project and sold the dream however provided the opposite, with no construction program from the developers they themselves had no idea on how the project was being built. With constant delay after delay and being called to site to complete works in an ad hoc manner the subcontractor was placed in a compromised financial position. After 9 months of delays the developer began threatening invented back charges and penalties to the contractor if they did not make up the lost time for a delay that they played no part in. This is when they got in contact with Contract Aware.
Solution:
After reviewing the contract a plan was devised on how best to move forward. Contract Notices and Delay Notices were issued to the developer immediately and they were put on notice. The subcontractor put in their final claim for the project circa $90k, the claim went un-assessed and un-paid.
The developer stated in email correspondence outside of the SOPA timeline, they weren't paying the claim as there's $50k of backcharges still to be issued. With other subcontractors on the site noting they had the same treatment of made-up back charges. Under the Security of Payment Act they were required to pay this claim in full on the basis that no assessment was ever issued. They ignored this law and wanted to play by their own rules.
An adjudication / Security of Payment claim was launched and with the help of Contract Aware, the claim was fully compliant. The developer realised they had no means to challenge the claim and paid the $90k in full prior to the adjudication assessment.
The developer was left with a large legal bill from their lawyers and a lesson in contract and project management.
The developer stated in email correspondence outside of the SOPA timeline, they weren't paying the claim as there's $50k of backcharges still to be issued. With other subcontractors on the site noting they had the same treatment of made-up back charges. Under the Security of Payment Act they were required to pay this claim in full on the basis that no assessment was ever issued. They ignored this law and wanted to play by their own rules.
An adjudication / Security of Payment claim was launched and with the help of Contract Aware, the claim was fully compliant. The developer realised they had no means to challenge the claim and paid the $90k in full prior to the adjudication assessment.
The developer was left with a large legal bill from their lawyers and a lesson in contract and project management.
LESSONS LEARNED
- Don't sign contracts that you haven't read, get Contract Aware involved prior to starting.
- Be contractually compliant, issue your notices.
- If the developer or builder has no program, it's a red flag. They have no idea how they are going to build and you'll pay the price.
- Document all delays
- Know your Security of Payment laws and be compliant. Pin these timelines
Contact us
Whether you're dealing with delays, disputes or need advice on contracts, reach out to see how we can help protect you and your business.