Adjudication in Queensland over Christmas

If you are a claimant and you are considering making a payment claim or an adjudication applications under the Building and Construction Industry Payments Act (“BCIPA”) during the holiday period, you need to be aware of and consider the close out period over Christmas and New Year.

In the counting of days under the BCIPA,’ business days’ are required to be understood precisely. The BCIPA defines a ‘business day’ as not including:

  • A Saturday or Sunday; or
  • A public holiday, special holiday or bank holiday in the place in which any relevant act is to be or may be done; or
  • Any day occurring within any of the following periods:
    • 22 to 24 December;
    • 27 to 31 December;
    • 2 to 10 January.

In short, the days between Wednesday 21 December 2016 and Wednesday 11 January 2017 (19 calendar days) are not ‘business days’ and therefore will not be counted in any time period under the BCIPA. BCIPA has the longest shut down period of any security of payment legislation.

Understanding the holiday ‘shut down’ period may be vital in your adjudication or payment claim being successful.

Remember, if in doubt, contact Adjudicate Assist

Five things to consider before applying for adjudication

Adjudication can be a tough game particularly if you’re not aware about all its intracacies. To help focus your preparing, the Adjudcate Assist team have put together a quick-fire top five points to consider before you even think about serving your payment claim.

Here they are:

1. Is it addressed to the party who may be liable to make payment – who is the respondent?

You must correctly identify the person or entity who you are contracted with and who is liable to make payment, otherwise you run the risk of having your adjudication application deemed invalid.

Read the following Adjudicate Assist tip for further information:

Knowing your contracts: Vital to success in adjudication

Is it made from a valid reference date – when can you make a progress claim under the contract or the BCIPA?

A reference date is the key date from which you, as a claimant, can make a claim for payment. Typically these are clearly shown in your construction contract, but in some cases (such as verbal or oral contracts) they can be difficult to identify. If you call Adjudicate Assist, we can help you find out what your likely reference dates are.

Does it identify the construction work or related goods and services to which it relates – can the respondent clearly understand what you are claiming for?

The Building and Construction Industry Payments Act makes it a requirement for the claimant to identify the work they’re claiming for explicitly on the payment claim itself. You’re putting your best foot forward if you make the construction work which you’re claiming for as clear as possible on the claim itself.

Does it state the amount claimed – how much are you claiming?

Like the previous tip, claimants should make it 100% clear the total amount subject of the claim. You are required to do this under the legislation and leaving this part out may mean your payment claim cannot proceed to adjudication.

Does it state that it is made under the BCIPA – ‘This is a payment claim made under the Building and Construction Industry Payments Act 2004’?

The final tip is that you must endorsed your payment claim with the words “This is a payment claim made under the Building and Construction Industry Payments Act 2004”. This is a device to signal to the respondent that you’re making a claim under the act rather than submitting any old tax invoice. Claims without these words run the risk of failing at adjudication on jurisdictional grounds.

As always, Adjudicate Assist are willing, ready and able to help you with your payment claim and adjudication application.

If in doubt – seek expert assistance from Adjudicate Assist.

Interest rates and payment claims under BCIPA

Were you aware that overdue claims made under the Building and Construction Industry Payments Act (“BCIPA”) attract interest?

Furthermore, if your payment claim goes to adjudication, and you’re successfully, the adjudicator will usually make a ruling on the interest rate your overdue claim will attract.

This blog pot gives you further information on the claimant’s entitlement to interest as well as an explanation of the interest penalty rate in the Queensland Building and Construction Commission (“QBCC”) Act means in terms of adjudication in Queensland.

Entitlement to interest

A claimant’s right to interest on overdue payments is provided in Section 15(2) and(3) of BCIPA

Interest is not only applicable to the adjudicated amount in adjudication decisions but can also be claimed in progress claims in certain circumstances.

Where a payment claim is made under the BCIPA and the respondent fails to provide a payment schedule within the required timeframe under the BCIPA, the claimed amount is due and payable on or before the due date for payment (s19(2) of the BCIPA).

If the claimant does not proceed to adjudication in respect of this payment claim, the claimant is entitled to claim interest for each day of delay immediately following the due date for payment in subsequent payment claims.

The magic of s67P interest

In an age where the banks are offering annual deposit interest rates in the low single digits, the QBCC Act Section 67P penalty rates are generous at around 12.3% p.a. compounded daily.

Where applicable QBCC Act Section 67P provides a significant deterrent to respondents which wish to delay payment of progress payments.

Many claimants ignore their entitlement to interest in progress claims even where this can be a significant sum of money.

If you’re not claiming the appropriate interest rate on overdue payment claims, you’re doing yourself a financial disservice.

Get in touch for more information.

Adjudicate Assist is a specialist company dealing with all aspects of security of payment legislation throughout Australia and providing expert help to those wishing to utilise the Building and Construction Industry Payments Act. Get in touch today.

If in doubt – seek expert assistance from Adjudicate Assist.

The due date for payment: getting it right!

Knowing your due date for payment sounds simple enough but surprisingly, many claimants calculate it incorrectly, and and are subsequently disadvantaged when their claim is disputed and they end up engaging the adjudication process.

Where to start.

The starting point for determining the due date for payment is the contract between the parties. Most standard written forms of contract will provide a specific time for payment following the service of the progress claim.

Where the contract provides a time for payment this must be read with reference to the provisions of the Building and Construction Industry Payments Act (“BCIPA”) Section 15.

This section of the legislation stipulates maximum payment terms for contractors and subcontractors to which the Queensland Building and Construction Commission (“QBCC”) Act applies.

When the Act and your contract conflict.

Where the period in the contract is in excess of the maximum permissible payment period under Section 67U (25 business days) & Section 67W (15 business days) of the QBCC Act, the payment terms default to 10 business days – the same date as the payment schedule is due for standard claims.

It doesn’t help that the definition of ‘business day’ under the QBCC Act and the BCIP Act are different (specifically the BCIP Act removes the dates between Christmas and New Years as valid business days)

Where the contract does not provide a time for payment the payment terms default to 10 business days.

When there is a valid payment terms.

Where the contract does provide a time for payment and the contract is not governed by the QBCC Act (for example: excavation, electrical work, supply of related goods and services) then the contract time for payment will apply.

Establishing the correct due date for payment is critical to serving a notice of intent to apply for adjudication (Section 20A(2) notice) under the BCIPA.

More help?

However, if you’re unsure of how to calculate the due date for payment of your payment claim, you’re welcome to contact us for assistance.

If in doubt – seek expert assistance from Adjudicate Assist.