Some Practical Tips For Subcontractors To Assist In Adjudication Applications

Here are some tips to prevent common problems arising, resulting in an unsuccessful adjudication application under the Security of Payment Legislation.

Ensure that your payment claim is served on and from the reference date. A payment claim served the day before a reference date or where there is no reference date will be invalid and will prevent a successful adjudication application.

Make sure that your payment claim and application for adjudication is served in accordance with the method for service of documents provided for in the subcontract. Can you serve documents under BCIPA electronically by email or drop box? Yes you can, although subcontractors should ensure that the subcontract provides for service of documents by email and preferred electronic means. If your subcontract is silent on the method of service of documents electronically the safest method of service is by delivery by courier to the place of business of the contractor specified in the subcontract, so that service can be easily proven by independent evidence.

Ensure that time limits under the BCIPA are complied with. A failure to comply with time limits associated with the making and service of an adjudication application will render the application invalid.

You must serve the second chance notice for a contractor to serve a payment schedule before proceeding to make an adjudication application. If you do not serve the second chance notice strictly in accordance with the time limits in BCIPA the adjudication application will be invalid.

Your adjudication application must be made in writing. You must serve your adjudication application in writing and it must be an exact copy of the application that is filed with the QBBC. If you fail to give the respondent contractor an exact copy of the adjudication application, by omitting to provide the respondent with all of the documents, your application is likely to be invalid and any decision made in your favour liable to be set aside for jurisdictional error. Never serve a payment claim or an adjudication application on a USB stick as it does not constitute writing and will invalidate an adjudication application.

What should you include in an adjudication application?  Evidence in the form of witness statements from those persons who can verify the work done in the payment claim and who can verify the factual matters to dispute points raised in the payment schedule. Relevant documents and written communications should be referred to and attached to the witness statements where necessary. If applicable, expert reports should be included as well. This is particularly so if the respondent contractor is asserting that work is defective. Written submissions should also be included in the application summarising the evidence provided in the witness statements in support of the payment claim, responding to the points in the payment schedule and addressing contractual and legal points to be made.

Variation claims are invariably disputed by a contractor in an adjudication. Subcontractors should ensure that the obligations to give notice and obtain the written consent of the contractor prior to undertaking the variation work are complied with as required by the subcontract. If these subcontract requirements are not complied with a respondent contractor will raise such non compliance to dispute a payment claim in an adjudication application. A good practise is to confirm any discussions on the construction site relating to variations between relevant representatives in email communications. The email communications can be attached to a witness statement and relied up in an adjudication application if necessary. Contemporaneous notes and written communications can assist greatly to prove the nature and extent of variations done at the direction of a contractor in an adjudication application.

Delay and liquidated damages are, in nearly all adjudication applications, raised by a respondent contractor to try and defeat a subcontractor’s claim for payment. In our next bulletin we will provide you with ways to assist subcontractors in successfully overcoming delay and liquidated damages claims in adjudication.

If you require further information please contact Justin Mathews of our office on 07 5574 0111 or via email at justinm@qbmlaw.com.au.