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Queensland Security of Payment Laws Amended
The Building and Construction Industry Payments Amendment Act2014 (Qld) will commence in the coming months amending the Building and Construction Industry Payments Act 2004 (Qld). The Amendment Act will implement recommendations made in the Wallace Report to address concerns regarding the current Act. The two major changes are the imposition of different timeframes for standard and complex payment claims and the establishment of a single adjudication registry administered by the Queensland Building and Construction Commission (QBCC).
All stakeholders in the building and construction industry should ensure they are aware of when the amendments will commence and seek legal advice in order to be prepared for the amendments. The amendments are currently intended to commence in late November. The following are some of the key amendments.
Existing Construction Contracts and Adjudication Applications Made Before Commencement
Only construction contracts and adjudication applications made after commencement are affected by the amendments.
Construction contracts already in existence will not be subject to the amendments and will be dealt with under the unamended Act, except insofar as they relate to new adjudication applications. New adjudication applications are to be made to the Adjudication Registrar of the QBCC, not an Authorised Nominating Authority (ANA).
Any adjudication application made before commencement and not yet referred to an adjudicator is to be dealt with and decided in accordance with the unamended Act.
Payment Claims – Shortened Deadlines
The deadline for service of a payment claim has been shortened. Final payment claims may be served within the later of:
- the period worked out under the construction contract;
- 28 days after the end of the last defects liability period worked out under the construction contract; or
- 6 months after the later of completion of all construction work or complete supply of related goods and services.
Any other payment claim may be served within the later of:
- the period worked out under the construction contract; or
- 6 months after the construction work was last carried out or the related goods and services were last supplied.
Payment Claims – Standard and Complex
The amendments create two types of payment claims, standard and complex. A complex payment claim is a claim for more than $750,000 (ex GST), all other payment claims are standard. The payment claim need not state whether it is standard or complex. Different timeframes apply to the two types of payment claims.
Payment Schedules and Adjudication Responses – New Timeframes
In relation to complex payment claims, respondents are allowed longer periods to respond to a payment claim or adjudication response.
Upon receipt of a complex payment claim, the respondent has 15 business days (or 30 business days if the claim is served 91 days or more after the reference date in the contract) in which to serve a payment schedule. Upon receipt of a standard payment claim, the time in which to serve a payment schedule remains 10 business days.
Regardless of the type of payment claim to which it relates, an adjudication application must still be made by a claimant within 10 business days of service of a payment schedule.
Upon receipt of an adjudication application in relation to a complex payment claim, the respondent has 15 days in which to serve an adjudication response and may apply for 15 additional business days. Upon receipt of an adjudication application in relation to a standard payment claim, the time in which to serve an adjudication response remains 10 business days.
The parties may still vary the timeframes for payment schedules in the construction contract. A claimant may still not make an adjudication application in circumstances where the respondent has not served a payment schedule or paid the whole or any part of the claimed amount by the due date unless the claimant issues a notice within 20 business days after the due date for payment allowing the respondent a further 5 business days from receipt of the notice in which to serve a payment schedule. This notification requirement also applies to any Court proceedings.
Claimants are no longer able to choose the ANA to appoint an adjudicator. All adjudication applications must be made to the Adjudication Registrar. Adjudication applications must be made in the approved form and must be accompanied by the fee prescribed by the regulation.
Adjudication Responses – Raising New Reasons
If an adjudication application relates to a complex payment claim, the adjudication response may include any reasons for withholding payment whether or not those reasons were included in the payment schedule. The current rule limiting reasons to those included in the payment schedule will continue to apply in relation to standard payment claims.
Should new reasons be included in the adjudication response, the claimant may give the adjudicator a reply to the new reasons within 15 business days of service of the adjudication response and may apply for 15 additional business days.
Adjudicator’s Fees – When Decision is Void and Unenforceable
If a Court finds that an adjudicator’s decision is void and unenforceable, the adjudicator is still entitled to be paid any fees or expenses if the adjudicator acted in good faith in adjudicating the application.
Only Part of an Adjudicator’s Decision Affected by Jurisdictional Error
If a Court finds that only part of an adjudicator’s decision is affected by jurisdictional error, the Court may identify that part and allow the part of the decision not affected to remain binding.
No Business Days Around Christmas and New Year
To avoid preparation of payment schedules and adjudication responses over the Christmas and New Year period, the definition of “business day” excludes the period from 22 December until 10 January.