No Licence = Invalid Construction Claims

Construction Litigation

If your head contractor assures you that it’s OK to proceed with works despite not having a licence, and that you’re “covered” by theirs, is this good advice? Are you OK to proceed?

Get to Work… Pronto

When Pronto Solar Innovations Pty ltd (Solar) and Pronto Projects Pty Ltd (Projects) got their subcontracts with St Hilliers to help out with the construction of solar farms in central Queensland, St Hilliers told them that they didn’t need licences and could work “under” St Hilliers’ licence.

The works they were asked to do included driving piles into the ground for the solar panels. For Solar and Projects, it didn’t matter that much whether this work required a licence, because of what St Hilliers had told them about being “covered”.

Of course, the works did require a licence, because driving piles into the ground where they will be fixed to the land falls neatly into the definition of “building work” in the Queensland Building and Construction Commission Act 1991 (QBCC Act) and, on this occasion, wasn’t excluded by any of the relevant Regulations.

So off they went and got to work on site, comfortable to proceed despite being unlicensed.

At this point, you can probably guess where this story is going.

Could we Get Paid Now Please?

In January 2018, Solar issued claims for $1,047,318.53 and Projects issued claims for $584,012.22. These were both payment claims made under the Building and Construction Industry Payments Act (BCIPA), and notices of claim of charge under the Subcontractors’ Charges Act.

St Hilliers brought proceedings seeking to kill off both avenues of claim because the works required an appropriate licence which Solar and Projects did not have, and as a result they were not entitled to claim any monetary compensation.

Solar and Projects attempted to argue first that no licence was required for the works, and otherwise that St Hilliers shouldn’t be permitted to rely on those provisions because St Hilliers itself had told them they didn’t need a licence.

Daubney J declared that the payment claims were invalid, and the claims of charge were cancelled.

In doing so, his Honour found that the work done required a licence under the relevant legislation, and as a result neither Solar nor Projects were entitled to any form of compensation for the work done (because you can’t get paid for unlicensed work, pursuant to section 42 of the QBCC Act). His Honour also found that the provisions which prevented any claims for payment could not be affected by the various assertions about what St Hilliers had said to Projects and Solar about licensing requirements. The section itself prevents that kind of assertion from being argued.

As a result, both the claims under BCIPA and the attempted subcontractors’ charges were invalid.

What Are the Lessons?

First – if you’re entering into a contract, don’t take legal advice from the other party about your licensing requirements. Saying “but they told us…” later on isn’t a good strategy generally, and in this case was unfortunately futile.

Second – be absolutely sure that you’re appropriately licensed to perform works, or don’t require a licence. Failing to do so could have drastic consequences from which your business might not recover.

Need help with your licensing requirements? Give us a call.

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