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Striking the balance between a ‘reference date’ and a contractors’ entitlement to payment

Following the commencement of the Building and Construction Industry Payments Amendment Act 2014 (BCIPA) on 15 December 2014, a number of key amendments were introduced which parties to construction contracts should have an awareness of in 2015.

Appointment of Adjudicators

Prior to the amendment Act, claimants wishing to apply for adjudication of payment claims had to select commercial Authorised Nominating Authorities (ANA), who then would refer the matter to an adjudicator. With the amendments, applications must now be lodged with the newly established Adjudication Registry, operating under the auspices of the Queensland Building and Construction Commission (QBCC).

Applications for adjudication must conform to the approved form (which can be generated through the QBCC’s website) and must be accompanied by a fee as prescribed by the amendment Regulation.

Introduction of dual model classification of claims

The changes introduced to the BCIPA has established two separate processes for “standard” payment claims, and “complex” payment claims.

“Standard” payment claims: Respondents lodging standard payment schedules and adjudication responses are required to adhere to the following timeframes:

  • 10 business days after receiving payment claim for payment schedule
  • 10 business days after receiving payment schedule for adjudication application
  • 10 business days after receiving adjudication application for adjudication response.

“Complex” payment claims: Claims made for amounts greater than $750,000 (excluding GST), or any amount larger than what is prescribed by regulation, will be considered as a complex payment claim.

Respondents lodging complex payment schedules and adjudication responses are required to adhere to the following timeframes:

  • 15 business days after receiving of payment claim
  • 10 business days after receiving of payment schedule
  • 15 business days after receiving of adjudication application.

In addition to a wider lodgement time period for a payment schedule and adjudication response, respondents for complex payment claims also have the option of making an application to an adjudicator for an extension of 15 business days for an adjudication response.

Additional information outlining reasons for withholding payment

Previously, respondents to complex claims were prohibited from providing reasons for the withholding of payment in relation to their adjudication response, not included within the payment schedule. However, the position has changed with the amendment Act allowing respondents to provide new reasons for withholding payment. Although it should be noted, that for a standard claim, the prohibition against providing reasons for withholding payment remains for an adjudication response.

Jurisdictional error

Prior to the amendment Act, adjudication decisions resulting from a jurisdictional error was considered void in its entirety. However with the amendment Act, the Court now has the discretion to allow the parties to still be bound by any unaffected part of the decision, whilst severing the parts of any adjudication decisions affected by jurisdictional error.

Amended definition of “business day” (Christmas shutdown period)

The amending Act has extended the definition of “business days” to include the dates covering 22 December and 10 January. It is hoped that with the introduction of this amendment, will prevent “ambush” claims which had become commonplace within the industry.

This article or the information contained therein does not purport to provide a full explanation of the law, give advice or any guidance to anyone in connection with BCIPA or any other issue and this article is not to be used by anyone to support their legal position or otherwise. This article is provided on the basis of particular facts and circumstances. This article is limited only to what is the generally accepted view in Australia. This firm cannot take responsibility for any action readers take based on this information. We would be happy to assist you with any construction and engineering related legal issues you may have, please get in touch via [email protected] or telephone our Brisbane office on (07) 3087 3463, Sydney office on (02) 9293 2546 or Sunshine Coast office on (07) 5413 9270 and one of our experienced lawyers will respond to you.