If you have received a payment claim for building work and do not believe that it is owed or there is an offsetting claim, you must respond by serving a valid Payment Schedule on the earlier of 15 business days after the payment claim is received, or a shorter period if specified in the contract. Many contracts provide for an earlier time for the response, so care has to be taken to act quickly.
The requirements for a valid Payment Schedule in Queensland are:
- it must be in writing;
- it must refer to the payment claim;
- it must state any amount proposed to be paid in the payment claim, or if disputed, must state reasons for withholding payment of the amount claimed in the payment claim.
Many contracts provide for making a payment certificate in response to a progress claim and sometimes that obligation accelerates the time for giving a payment schedule.
It is critical to have the payment schedule served within the proper time if there is any dispute as to the payment, because if you do not:
Firstly, the claimant can sue for the amount claimed in a payment claim in court, and you are unable to defend or counterclaim for matters that ought to have been in the payment schedule;
Second, if the contractor starts the adjudication process you cannot run arguments to liability on the basis of what ought to have been in the payment schedule;
Third, the contractor can suspend work until payment is made.
The requirements of the Act are quite technical and often contractors and subcontractors do not properly follow the processes correctly, losing rights. Obtaining assistance from a lawyer who works in the building and construction area gives protection against that.
In my next article I will discuss the adjudication process.
Meet The Author!
Meet the author of this blog article, Justin Mathews. Over the next several weeks, we will post a series of articles relating to Queensland building and construction matters written by Justin.
Justin is a registered Adjudicator in Queensland under the Building Industry Fairness (Security of Payment) Act 2017 and also in the Northern Territory under its security of payment legislation, and an accredited specialist in commercial litigation.
He represents a number of Queensland building contractors and other parties in building and construction disputes both through the adjudication process and in the various state courts of Queensland, New South Wales, and Northern Territory, as well as advice in relation to contractual matters, and QBCC regulatory matters including matters involving the statutory warranty scheme.
In these articles Justin will discuss a number of matters of interest to members of the Queensland building and construction industry.
For enquiries concerning building matters, Justin can be contacted by email justinm@qbmlaw.com.au or Ph: (07) 5574 0111.
Also Read:
