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 (including 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 (including 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) the construction, erection, re-erection, alteration, repair, restoration ,maintenance, extension, adding to, underpinning, removal, demolition, or dismantling, of –
(i) buildings; or
(ii) structures that form, or are to form, part of land;
(b) the construction, alteration, repair, restoration, maintenance, extension, removal, demolition or dismantling of works that form, or are to form, part ofland, including –
(i) walls; and
(ii) road infrastructure; and
(iii) energy infrastructure and telecommunications facilities; and
(iv) aviation landing facilities and railway infrastructure; and
(v) marine infrastructure, water and sewerage infrastructure, drainage infrastructure, dams and canals and installations for the purposes of irrigation, land drainage or coast or river protection; and
(vi) structures, such as poles, wires and netting, erected to support or protect agricultural, horticultural or forestry products; and
(vii) structures (other than underground structures constructed to enable access to minerals) to enable persons to gain access to places on which agricultural, horticultural, forestry, tourist or mining activities are being, or are to be, carried out;
(c) the installation or alteration in, or removal from, any building, structure or works, of systems, and services, that form, or are to form, part of land, including –
(i) heating, ventilation, airconditioning and cooling systems; and
(ii) power supply, lighting and communication systems; and
(iii) passenger lifts and goods lifts; and
(iv) plumbing installations; and
(v) fire safety systems and security systems;
(d) any operation that forms an integral part of, is preparatory to, or completes, work referred to in paragraph (a), (b) or (c), including –
(i) site clearance, earth-moving, excavation, tunnelling, boring and filling; and
(ii) the preparation of foundations; and (iii) the erection, maintenance or dismantling of plant and equipment; and
(iv) the prefabrication of components to form part of any building, structure or works, whether the prefabrication is carried out onsite or off-site; and
(v) site restoration, landscaping and the provision of road infrastructure and other works to enable access to land or a part of land;
(e) the internal or external cleaning of buildings, structures, or works, that is carried out in the course of the construction, alteration, repair, restoration, maintenance, extension, removal, demolition or dismantling of the buildings, structure or works;
(f) the painting or decoration of the internal or external surfaces of any building, structure or works;
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(a) goods of the following kind:
(i) materials and components that are to form part of any building, structure or work arising from building work or construction work;
(ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of building work or construction work;
(b) services of the following kind:
(i) the provision of labour to carry out building work or construction work;
(ii) architectural, design, land surveying, quantity surveying, engineering, building surveying or project management services in relation to building work or construction work;
(iii) inspection, reporting, or advisory, services provided in respect of buildings, building systems and services, energy and sustainability systems and services, geotechnical, engineering, interior decoration, exterior decoration or landscape services provided in relation to building work or construction work;
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The short answer is yes.
The longer answer is that it gives you the best chance of getting your money.
The keys to getting your money are:
(a) Being able to identify your debtor (Respondent);
(b) Knowing as much about them as possible such as where they bank and how to contact them; and
(c) The Respondent’s ability to pay.
If you have all of these things you have placed yourself in the best position possible to get your money.
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A Payment Claim is the document that establishes the Claimant’s entitlement under the Act.
A Payment claim must:
(a) Be addressed to the Respondent;
(b) State the name of the Claimant;
(c) Identify the construction work (or related goods and services) to which the progress payment relates;
(d) Indicate the amount of the progress payment that the Claimant claims to be due (the "claimed amount"); and
(e) State that it is made under the Building and Construction Industry Security of Payment Act 2009 .
A Payment Claim requires all of these 5 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 (in some cases) or hand-delivery.
Fax is the best way (as long as your fax machine provides a fax transmission log).
Email is acceptable if there has been an agreement to service by email and 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; 20 business days in the case of a resident home owner.
Day 1 is the business day after the Respondent receives the Payment Claim. Business days are not weekends or statutory holidays as defined in the Statutory Holidays Act 2000.
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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 it’s 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 (if there has been an agreement to service by 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 receives the Payment Claim. Business days are not weekends or statutory holidays as defined in the Statutory Holidays Act 2000.
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You need to wait until your Payment Claim has not been paid and then serve a notice under Section 21 (4) 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 you have 10 business days to lodge an Adjudication Application.
Note: You only have 20 business days after the due date for payment of your Payment Claim to lodge your notice under Section 21 (4) 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 or statutory holidays as defined in the Statutory Holidays Act 2000.
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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 with the ANA.
Remember in most cases 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 20 business days to provide their Determination.
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 these new reasons for withholding payment.
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You need to wait for 5 business days after the Adjudicator has provided their Determination. 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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Yes.
If you have not been:
(a) Provided a Payment Schedule and not paid by the due date for payment;
(b) Paid the scheduled amount; or
(c) Paid the adjudicated amount.
You can issue a ‘Notice of Intention to Suspend’ under the Act.
2 business days after that notice is issued you may suspend work. If you are paid you must recommence work within 3 business days.
It is strongly recommended that further advice is sought before suspending work.
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You only have 12 months from when you last carried out work to lodge a Payment Claim.
If you are asking this question you need to discuss this with somebody because this period is subject to certain definitions.
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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.
Have a question? Email us or ring 1300 76 86 30 for an outcome.
If you do nothing it is most likely that you will be paid nothing.
