Building and Construction Industry (Security of Payment) Act (2009) (the Act)
The Act creates a statutory entitlement for you (the Claimant) to be paid for construction work that you have carried out or construction related goods and services that you have supplied to your client (the Respondent).
By the provision of a Payment Claim and having it adjudicated under the Act.
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The Act covers ‘Construction Work’ which is basically all building and related trades, if you are a tradesman or a builder working for anybody other than a resident home owner the Act is there for you to get your money.
The Act also covers ‘Construction related goods and services’, if you are a supplier (such as a wholesaler or equipment hirer) or person who provides services (such as a designer) if supplying or working for anybody other than a resident home owner the Act is there for you to get your money.
Note: the Act does not cover mining work.
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(a) includes the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures, whether permanent or not, forming, or to form, part of land; and
(b) includes the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage or coast protection; and
(c) includes the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems; and
(d) includes the external or internal cleaning of buildings, structures and works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension; and
(e) includes any operation which forms an integral part of, or is preparatory to or is for rendering complete, work mentioned in paragraph (a), (b) or (c); and Examples 1 site clearance, earth-moving, excavation, tunnelling and boring 2 laying foundations 3 erecting, maintaining or dismantling scaffolding 4 prefabricating components to form part of any building, structure or works, whether carried out on-site or off-site 5 site restoration, landscaping and providing roadways and other access works Note These examples are not exhaustive.
(f) includes painting or decorating the internal or external surfaces of any building, structure or works;
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(a) including goods of the following kind:
(i) materials and components to form part of any building, structure or work arising from construction work;
(ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with carrying out construction work; and
(b) including services of the following kind:
(i) the provision of labour to carry out construction work;
(ii) architectural, design, surveying or quantity surveying services in relation to construction work;
(iii) building, engineering, interior or exterior decoration or landscape advisory services in relation to construction work.
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A Payment Claim is the document that establishes the Claimant’s entitlement under the Act.
A Payment claim must:
(a) Identify the construction work (or related goods and services) to which the progress payment relates;
(b) Indicate the amount of the progress payment that the Claimant claims to be due (the "claimed amount"); and
(c) State that it is made under the Building and Construction Industry (Security of Payment) Act.
A Payment Claim requires all of these 3 items or it is not a Payment Claim.
A Payment Claim does not have to be a Tax Invoice.
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A Payment Claim can be served by post, fax, email or hand-delivery.
Fax is the best way (as long as your fax machine provides a fax transmission log).
Email is acceptable if you can get a delivery / read receipt.
Courier is also alright if you can get a receipt.
While the various forms of post are legitimate methods of service it can be hard to prove that your Payment Claim was served.
The key is you need to be able to prove that the Payment Claim was served.
Note: The construction contract will also provide guidelines with respect to the service of documents.
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The Respondent has 10 business days to provide a Payment Schedule.
Day 1 is the business day after the Respondent receives the Payment Claim.
Business days are not weekends, public holidays, or any days between 27th & 31st December.
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A Payment Schedule is a document that indicates what the Claimant is to be paid by the Respondent.
A Payment Schedule must:
(a) Identify the Payment Claim to which it relates;
(b) Indicate the amount of the progress payment that the Respondent proposes to make; and
(c) If the Respondent proposes to pay less than the claimed amount state its reasons for withholding payment.
A Payment Schedule requires all of these 3 items or it is not a Payment Schedule.
A Payment Schedule can be served by post, fax, email or hand-delivery.
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You have 10 business days to have your Payment Claim adjudicated under the Act by lodging an Adjudication Application.
Day 1 is the business day after the Respondent provides the Payment Schedule. Business days are not weekends, public holidays, or any days between 27th & 31st December.
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You need to wait until your Payment Claim has not been paid and then serve a notice under Section 19 (2) of the Act.
This notice advises the Respondent that:
(a) You intend having your Payment Claim adjudicated; and
(b) They have 5 business days to provide a Payment Schedule.
Then at the end of the 5 business days or after you receive the Payment Schedule you have 10 business days to lodge an Adjudication Application (whichever is the earliest).
Note: You only have 20 business days after the due date for payment of your Payment Claim to lodge your notice under Section 19 (2) of the Act.
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You have 20 business days after the due date for payment to have your entitlement adjudicated under the Act by lodging an Adjudication Application.
Day 1 is the business day after the Respondent was due to pay the Payment Claim. Business days are not weekends, public holidays, or any days between 27th & 31st December.
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You will need to prepare a document that convinces an Adjudicator that the Respondent’s reasons for withholding payment are not correct and that you are entitled to the claimed amount.
Your Adjudication Application must be lodged with an Authorized Nominating Authority (ANA). Some of these are listed on the useful information and links page. You must serve a copy of the Adjudication Application on the Respondent at the same time you lodge your Adjudication Application on the ANA.
Remember in most circumstances you only have 10 business days to lodge your Adjudication Application.
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Adjudication under the Act is not like a court.
Normally you will not see or speak to the Adjudicator. All of the submissions are made in writing.
The Adjudicator has nominally 16 business days after you have commenced the adjudication process to provide their Decision.
5 business days later you are entitled to be paid the adjudicated amount.
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Yes.
If the Respondent has provided a Payment Schedule they are entitled to submit an Adjudication Response.
The Respondent is not entitled to include reasons for withholding payment that were not included in their Payment Schedule.
The Adjudicator should ignore any new reasons for withholding payment.
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You need to wait for 5 days after the Adjudicator has provided their Decision. Then if you have not been paid you can obtain an Adjudication Certificate from the ANA.
The Adjudication Certificate can then be taken to a court and action commenced to obtain your money.
There is no further requirement to prove that you are entitled to the adjudicated amount.
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Only you can decide when you need help.
The Act has been in force since 2010. However NSW, Queensland and Victoria have similar Acts which have been in force for some time. During that time Respondents and their advisors have learnt a few tricks that may trap or trick inexperienced Claimants.
If you want to concentrate on taking your company forward you may be better off engaging somebody to rectify the issues of the past; while providing advice on avoiding these problems in the future.
You are a businessperson who makes money building or supplying things; focus on that and get somebody else to clean up this mess.
If you intend to stop work it is highly recommended that you seek assistance.
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If you do nothing it is most likely that you will be paid nothing.
