Frequently Asked Questions

• Why was the Building & Construction Industry Paymens Act created?
• Is there similar legislation in existence elsewhere in Australia?
• What are the objectives of the Act?
• How are these objectives achieved?
• What does the Act apply to?
• When can a person make a payment claim for the payment of a progress payment?
• What should a payment claim state?
• What must a Respondent do when they receive a 'payment claim'?
• What should a 'payment schedule' state?
• What are the consequences of not providing a 'payment schedule'?
• What are some other issues relating to the payment of claims?
• Are there any payment contractual provisions that are 'void'?
• Does the Act provide a method for the valuing of payment claims?
• What are the implications for persons (Claimants) lodging payment claims under the Act?
• What are the implications for persons (Respondents) receiving payment claims under the Act?
• When can a Claimant proceed to adjudication?
• How does the adjudication process work?
• What should an adjudication application contain?
• Where does a Claimant lodge an adjudication application?
• How is an adjudicator appointed to decide an adjudication application?
• Does the Respondent have an opportunity to provide a response to the adjudication application?
• What should an adjudication response contain?
• Can an adjudication response raise any new issues which were not raised by the Respondent in their 'payment schedule'
• How long does an adjudicator have in which to decide an adjudication application?
• How does an adjudicator go about deciding an adjudication application?
• What does an adjudication decision contain?
• When should a Respondent pay any amount decided by an adjudicator to a Claimant?
• What happens if the Respondent does not pay the adjudicated amount?
• What is an 'Adjudication Certificate'?
• What does an 'Adjudication Certificate' contain?
• What does a Claimant do with an 'Adjudication Certificate'?
• What is the end effect of an 'Adjudication Certificate'?
• Can a Respondent seek to have a judgment debt set aside?
• Are there any limitations imposed on a Respondent seeking to have a judgment debt set aside?
• How are ANAs and Adjudicators paid?
• Can an adjudicator refuse to release their decision until paid?
• Can parties contract out of the Act?
• Who registers ANAs and Adjudicators?
• Are adjudication decisions published?

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• Over several years the Builidng Services Authority has actively campaigned for new payment legislation for the building and construction industry.
• The Building and Construction Industry Payments Bill 2004 was introduced into Parliament on 18 March 2004.
• Parliament debated and passed the Bill - 11May 2004.
• An earlier version of the Bill was introduced into Parliament in November 2003 - lapsed due to the calling of State Election.

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• Many of Australia's States and Territories have payment legislation in place.

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• To ensure that a person is entitled to receive and recover progress payments for the carrying out of building & construction work or supplies related goods and services under a construction contract in Queensland
• To provide a quicker and cost effective resolution of payment disputes than the court system

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• The Act creates a statutory right for persons to receive progress payments.
• The Act creates a statutory right for persons to recover progress payments via:
  • The making of a payment claim by the person claiming payment;
  • The provision of a 'payment schedule' by the person who received the payment claim;
  • The referral by the person claiming payment of a disputed claim, or a claim that is not paid in full, to an Authorised Nominating Authority who appoints an adjudicator for a decision;
  • An "adjudicator" deciding a disputed progress payment

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• With some exemptions, the Act applies to all "construction contracts" where a person:
  • "Carries out building & construction work"; or
  • "Supplies related goods or services" in Queensland.
• Contracts also include ORAL contracts.
• The types of contractual arrangements captured by the Act include:
  • Contractors against principals/developers;
  • Subcontractors against contractors;
  • Suppliers against subcontractors/contractors;
  • Plant and equipment hirers against subcontractors/contractors;
  • Consultants against clients;

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• The Act provides a statutory right to make payment claims from:
  • Date calculated in accordance with contract (reference date);  or
  • the last day of each calendar month if no reference date provided in a contract.

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• A "payment claim" should:
  • Be in writing and addressed to the person with whom you contracted (the Respondent)  (not superintendent);
  • Identify the construction work or related goods or services to which the claim relates;
  • State the amount of the claim;
  • State words to the effect of "This is a Payment Claim made under the Building and Construction Industry Payments Act 2004 (Qld).

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• On receiving a payment claim under the Act the Respondent has 2 options:
  • Pay the claim in full on or before the due date; and/or 
  • Respond to the claim by serving a 'payment schedule'.

• PRESCRIBED TIME - A payment schedule must be served within 10 business days, or such earlier time as stated in the contract.

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• A 'payment schedule' should:
  • Identify the payment claim to which it relates;
  • Indicate the amount the Respondent proposes to pay;
  • If the amount is less than the amount claimed, specify the reasons why the amounts differ.

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• If the payment claim is valid, the full amount of the claim is deemed to be due and payable.
• The Claimant can recover the unpaid portion of the claim as debt in summary  court proceedings.
• In any summary court proceedings the Respondent cannot raise any cross claims in respect of the construction contract (i.e. that the work was not actually done or is defective).
• The Claimant may suspend future work with 2 business days notice if the amount claimed is not paid by the due date.

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• A progress payment is payable on the submitting of a payment claim:
  • Subject to the contract not containing a 'void' provision, the time stated in the contract, referred to as the 'due date for payment'; or
  • If no time, or a void provision is stated in the contract, then due date for payment is within 10 business days of the payment claim being served.
• If the amount stated in the payment schedule is not paid:
  • The Claimant can recover the unpaid portion of the claim as debt in summary proceedings.
  • In any summary proceedings the Respondent cannot raise any cross claims in respect of the construction contract (i.e. that the work was not actually done or is defective).
  • The Claimant may suspend performance of future work with 2 business days notice if the amount claimed is not paid.

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• Provision for payment in a 'subcontract' between a builder and subcontractor later than 25 business days after submission of payment claim, is void.
• Provision for payment in a 'commercial building contract' between a builder and a principal later than 15 business days after submission of payment claim, is void.
• "Pay when paid" clauses are void.

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• The Act provides for a method of valuing payment claims if:
  • The written contract is silent on this issue; or
  • There is only an oral contract in place.

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• Claimants may seek payment of progress payments under the Act without the need to resort to costly and time-consuming legal processes.
• Claims are for payment on account. It is still possible to take separate proceedings to prove a party's final entitlement to a payment claim.
• All persons preserve their contractual rights.
• Nothing under the Act affects any right that a party has under a construction contract.
• Nothing under the Act affects any civil proceedings before a court or tribunal in relation to any matter arising under a construction contract.

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• Respondent needs to have good "contract administration" - review your current methods now.
• Payment schedules must be issued in the correct form, within time, dot-pointing ALL the REASONS if there is a dispute with the amount mentioned in the payment claim

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• A Claimant may lodge an adjudication application where either:
  • The payment schedule is less than the payment claim;
  • No payment schedule is issued within the prescribed time;
  • The schedule amount is not paid, or only partly paid by the 'due date' for payment.

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• The Claimant lodges an Adjudication Application with an Authorised Nominating Authority ("ANA").
• The Adjudication Application must be made within either:
  • 10 business days of receiving a payment schedule, where the payment schedule amount is less than the payment claim amount; or
  • 20 business days after the due date for payment, where the Respondent fails to pay the whole or any part of the scheduled amount, or
  • 15 business days of the Claimant serving a notice* on the Respondent, where the Respondent has:
    • NOT SERVED A PAYMENT SCHEDULE within the prescribed time; and
    • NOT PAID WHOLE OR ANY PART of the claimed amount by the due date for payment.

• * This 'NOTICE of Intention to Apply for Adjudication" must be made within 20 business days immediately following 'due date' for payment.

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• The Adjudication Application:
  • Must be in writing; and
  • Must identify the payment claim to which it relates; and
  • Must identify the payment schedule (if any) to which it relates; and
  • May contain any submissions the Claimant intends to rely upon.

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• An Adjudication Application can only be lodged with an Authorised Nominating Authority (ANA), not directly with an Adjudicator.
• Refer to information  - About Authorised Nominating Authorities

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• The ANA will nominate a registered Adjudicator to decide the Adjudication Application.

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• The Respondent may give the Adjudicator a 'response' to the Adjudication Application within -

  WHICHEVER IS THE LATER of:

  • 5 business days of receiving the copy of the Adjudication Application;

    OR

  • 2 business days after receiving notice of the Adjudicator's acceptance of the application.
• The Respondent is only entitled to provide an adjudication response if the respondent has first served a payment schedule, within the allowed timeframe, on the claimant

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• The response:
  • Must be in writing; and
  • Must identify the adjudication application to which it relates; and
  • May contain any submissions the Respondent intends to rely upon.

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• The response:
  • CANNOT add any new reasons for dispute of the payment claim, that were not already identified in the payment schedule.
  • CAN expand upon the reasons already outlined in the payment schedule.

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• The Adjudicator must decide the adjudication application within 10 business days* after the earlier of the -
  • Date the Adjudicator receives the adjudication response; or
  • Date on which the Adjudicator should have received the adjudication response.

• * UNLESS the Claimant and Respondent agree to extend the 10 day period.

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• The Adjudicator may:
  • Request further submissions from the parties
  • Call a conference (without legal representation)
  • Inspect the work

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• The Adjudicator:
  • Must give a written decision; and
  • Include the reasons for the decision
• The Adjudicator is to decide the:
  • 'Adjudicated amount' of the progress payment, if any, to be paid by the Respondent to the Claimant; and
  • Date the 'adjudicated amount' becomes payable; and
  • Rate of interest payable.

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• The Respondent must pay any amount decided by the adjudicator, by the 'relevant date' which is prescribed as:
  • 5 business days of receiving the decision; or
  • If the Adjudicator decides a later date that the amount becomes payable, then that date.

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• If the Respondent fails to pay the whole or any part of the adjudicated amount by the 'relevant date', the Claimant may:
  • Ask the ANA to provide an 'Adjudication Certificate'; and/or
  • Suspend future work or the supply of goods or services, by service of a notice to do so.

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• An 'Adjudication Certificate' must state the:
  • Name of the Claimant;
  • Name of the Respondent;
  • 'Adjudicated amount';
  • Date on which payment of the adjudicated amount was required to be paid to the Claimant.

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• The 'adjudicated amount for an Adjudication Certificate' is comprised of:
  • The 'adjudicated amount' determined by the Adjudicator, and
  • May also include the addition of:
    • The amount of interest payable on the adjudicated amount; and
    • Reimbursement to the Claimant of the Respondent's share of the adjudication fees, if such fees were paid by the Claimant.

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• An 'Adjudication Certificate' -
  • May be filed as judgment debt, so that payment can be enforced in a Court of competent jurisdiction.
  • Must be accompanied by an 'Affidavit' from the Claimant stating that the whole or part of the adjudicated amount has not been paid.

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• The issuing of an adjudication certificate allows a Claimant the opportunity to convert an adjudication decision into a decision of a competent court of jurisdiction.

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• Yes

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• If the Respondent commences proceedings to have judgment set aside, the Respondent is not entitled to -
  • Bring any counterclaim against the Claimant; or
  • Raise any defence in relation to matters arising under the construction contract
  • Challenge the Adjudicator's decision.
• The Respondent must also pay into Court as security the unpaid portion of the adjudicated amount.

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• An ANA and an Adjudicator are entitled to be paid.
• Adjudication operates on a 'user-pays' basis.
• The Claimant and Respondent are 'jointly and severably liable' to meet such fees - each are liable to contribute to the payment in equal portions, or in the portions the Adjudicator decides.

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• The Adjudicator has a 'lien' entitlement to withhold releasing their adjudication decision until their adjudication fees are paid.
• A Claimant may pay the Respondent's portion of the fees, to have decision released and have this amount added to adjudicated amount when obtaining an Adjudication Certificate.

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• Parties cannot 'contract out' of the Building and Construction Industry Payments Act 2004.
• The Act makes void any contract provision that:
  • Is contrary to the Act; or
  • Purports to annul, exclude, modify, restrict or otherwise change a provision of the Act; or
  • May be construed as an attempt to deter a person from taking action under the Act.

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• The Act establishes an "Adjudication Registry" which will register Authorised Nominating Authorities (ANA) and Adjudicators.
• Comprehensive registration criteria will need to be met in order to become registered.
• Conditions of Registration will apply to ANA's and Adjudicators to maintain registration status.
• A breach of a condition may result in an ANA or Adjudicator having their registration suspended or cancelled.

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• Establishment of a 'Public Record' of adjudication decisions and other information are to be maintained by the Adjudication Registry.

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