Amendment of court proceedings involving a subcontractor's charge

Litigants can usually amend their case as many times as they need, but when the case involves a subcontractor’s charge, it often cannot really be changed at all. 

This is because one of the steps in the process of claiming a subcontractor’s charge is to properly commence a proceeding to enforce it, and that step needs to be taken entirely within one month after service of the notice of claim on the employer (BIF Act s 136(1)(a)(ii)), otherwise the charge is extinguished (BIF Act s 136(3)) and it cannot be revived (s 118). After the expiry of that time, amendments are, in essence, ineffective. This holds true despite the fact that the Uniform Civil Procedure Rules 1999 (Qld) contain provisions for out-of-time amendments to take effect from the commencement of the action. As was explained in Re Galaxy Investments Pty Ltd (in liq) unreported, White J, 1993 SC No 152 of 1992 (17 August 1993) (although in the context of the predecessor legislation and rules):

"This may seem a harsh result but the right and remedy [associated with subcontractor’s charges] are entirely the creatures of the legislation and unless there has been compliance with the Act amendment cannot be allowed for it would have the effect of reviving the cause of action."

What needs to be pleaded to enforce a subcontractor's charge?

Under the BIF Act, the subcontractor must prove that the charge attached to money payable or a security in existence before the hearing (s 136(2)). A properly pleaded claim, therefore, needs to allege:

1. the contract, the work, the application of Ch 4 of the BIF Act and monies to which the charge can attach;

   
   

2. money was payable to the subcontractor for the items of work that gave rise to the notice of claim and remains outstanding (All Systems Pty Ltd v MAW Group (Aust) Pty Ltd & Anor [2019] QDC 211 at [48], [55])

   
   

3. the subcontractor gave a notice of claim to the employer within 3 months after practical completion for the work (s 122(5)); 

   
   

4. the subcontractor gave a copy of the notice of claim to the contractor (s 123(2)); and

   
   

5. the proceedings were commenced within one month of the notice of claim.

If any of these elements are missed or not completely pleaded, the charge is likely to be extinguished (s 136(3)) and it usually cannot be revived (s 118), with the consequence being that the money the subject of the purported charge will not be set aside and, even if it is, the purported charge would be invalid, the subcontractor would remain an unsecured creditor and the monies would be returned to the employer or contractor, defeating the purpose of issuing a notice.