Service of documents under BCIPA

Adjudicate Assist understand that the service of documents under the Building and Construction Industry Payments Act (“BCIPA”) – such as  payment claims, payment schedules, adjudication applications and responses  – can often be a confusing process.

The objective of this post is to clear up some of this confusion and help you understand the importance of proper service of documents as well as how to serve documents properly.

To clear up what we mean by service, we’re talking about the delivery of documents on an intended recipient. A good example is the simply act of sending a payment claim to a respondent – the act of doing this is what constitutes serving the payment claim.

Why is service important?

The reason why you should care about proper service of documents is that should your payment claim go to adjudication; a good adjudicator will often request proof of service of important documents (such as the payment claim or a notice of intent to apply for adjudication) in order to establish their own jurisdiction.

If you have not done it correctly, you run the risk of having your adjudication fail on jurisdictional grounds.

What the BCIP Act says and methods of service.

The BCIPA provides for service in the way, if any, provided under the construction contract or under section 39 of the Acts Interpretation Act 1954 or any other relevant law about service.

Popular methods of service include email, post and facsimile, but each have their drawbacks. A good rule of thumb when it comes to service is to refer back to your construction contract, or alternatively, serve as many ways as possible under the circumstances.

Email service can be problematic if not provided for in the construction contract and should not be relied upon on its own as the only method of service.

Posting to a PO Box is also problematic if not provided for in the construction contract and should not be relied upon on its own as the only method of service. A recent Queensland Supreme Court judgement determined that service on a PO Box was not valid service for the purpose of the BCIPA.

Sending by facsimile can be problematic if for example the recipient’s facsimile machine is switched off or not connected. On the other hand as long as you have a confirmation of transmission report, service will be valid even if the recipient does not print out or is unable to print the transmission.

Serve the correct person or entity.

It is vitally important to serve to correct person of entity.

Service of payment claims and adjudication applications must be to the person liable to make payment (the respondent) as specified by the construction contract.

Likewise, service of payment schedules and adjudication responses must be to the person who is entitle to make the payment claim (the claimant). If you are serving anyone else but the claimant or respondent, be sure this is provided for in the construction contract or by delegated authority. If you serve a notice on the wrong person, you risk invalidating the adjudication process.

Service of documents, other than the adjudication application on Queensland Building and Construction Commission (“QBCC”), can take place up until midnight on the last day for service irrespective of any provision in the construction contract to the contrary.

Making an adjudication application to QBCC must be within the prescribed times of 8:00 AM to 5:00 PM on a business day.

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.