Building Disputes · Additional Resources

In May 2004 Queensland State Parliament passed the Building and Construction Industry Payments Act 2004 (“the Act”). In the building industry bad debts seem common and most experienced contractors/suppliers are aware of the difficulties faced in recovering payments due for services/materials provided. The costs of litigation are rarely, if ever recovered in full by either party, and the process is more often than not lengthy and emotionally draining. The Act seeks to establish a statutory system of rapid adjudication for the resolution of payment disputes.

Who Can Make a Claim under the Act?

The Act does not apply to a construction Contract between a home owner and contractors carrying out domestic building work. Such disputes should generally be taken to the Commercial and Consumer Tribunal.

How To Make a Claim under the Act?

There are time limits applicable to a Claim. The Claim must: -

In essence, the Claim should contain sufficient information to properly identify the work performed relating to the Claim.

Reply to Claim

A Respondent may reply to a payment claim by serving a payment Schedule in response within ten (10) business days. The payment schedule must: -

If the Respondent fails to serve a payment schedule within ten (10) business days:-

Adjudication

Private adjudicators will conduct the adjudication on a user pays basis and are contracted by an authorised nominating authority (for example the Queensland Law Society - relevant adjudication application forms are downloadable the QLS web-site).

An adjudicator must make a decision on the dispute within ten (10) business days from either receiving the Respondent’s adjudication response or the expiry of the specified time frame for receiving an adjudication response. If payment of the adjudicated amount is not made, the Claimant can request an Adjudication Certificate, which can then be lodged in a Court of competent jurisdiction as a judgment debt.

As an alternative to the Claimant making an adjudication application the person serving the claim can seek recovery of the amount as a debt owed in the usual summary Court proceedings. In these proceedings, the Respondent is not entitled to raise any Defence in relation to matters under the Contract or bring any counterclaim. Whichever course the Claimant takes they also have a right to suspend work after giving two (2) days notice to the other party.

Settlement

Obviously if Claimant receives a payment schedule and, regardless of whether it is less than or equal to the amount claimed, the Claimant decides to accept an amount offered by the Respondent the dispute is resolved. Moreover the parties may have preserved the basis upon which to continue a sound working relationship. (Note: It may be that a percentage of the amount claimed was held back because of defective building work.)

Other Matters

Subcontractors may continue to utilise the Subcontractors Charges Act 1974 however a subcontractor will not be permitted to start, continue or enforce adjudication once they lodge a Notice of Charge under the Subcontractors Charges Act.

Where parties have not included in their Contract intervals for making progress claims or times for making payment, a default provision exists in the Act. In the absence of a contractual provision the Act allows for a payment claim to be made at monthly intervals with payment becoming due ten (10) business days after the payment claim was made.



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