Beware of placing all your Assets at Risk

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Beware of placing all your Assets at Risk as an Employee signing a Statutory Declaration – Contractors and Subcontractors

A recent Federal Court case, 470 St Kilda Road Pty Ltd v Robinson [2017] FCA 597 (30 May 2017). found a person giving a statutory declaration, to be liable for the amount outstanding under a construction contract.

Generally for contractors or subcontractors to obtain payment under a construction contract a Statutory Declaration is required to accompany a progress claim or mile stone claim. The declaration usually states that all reasonable enquires have been made in relation to payments to subcontractors engaged for work under your contract.

The Federal Court found a declarant, who was an employee of the construction company that went into liquidation, to be liable for payment of $1.4 million, an outstanding claim by a subcontractor that was not paid. In this case the Chief operations officer of the construction company in LIQ, signed the declaration. The Federal Court viewed on the evidence presented, that he not undertake reasonable enquiries in relation to subcontractor payments.

Section 18 of the Australian Consumer Law was pleaded in that the declarants conduct amounted to misleading or deceptive conduct or was likely to mislead or deceive.

Previously the courts seemed reluctant to make adverse findings against declarants such as NSW Supreme Court decision in J Hutchinson Pty Ltd v Glavcom Pty Ltd² however 470 St Kilda Road Pty Ltd v Robinson demonstrates that declarants should no longer take statutory declarations lightly.

A person signing these statutory declarations should undertake reasonable enquiries as declared and further keep notes on the specific enquires.

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