Getting paid under a commercial construction contract in Queensland

The Building and Construction Industry Payments Act (Qld) (“BCIPA”) regulates payments and payment disputes under non-residential construction contracts in Queensland.

Disputes over money can arise at numerous stages of the construction process. Being aware of how construction payments are dealt with under BCIPA can not only help you avoid issues that may arise down the track, but can also assist in resolving disputes.

At first glance, BCIPA may seem to impose many requirements and protocols. However, following the procedures mandated by BCIPA can ensure that your claim has a strong foundation and does not become analogous to a “house built on sand”.

Issuing a payment claim

The first step to recovering monies owed under a construction contract is to issue a payment claim. Under BCIPA, a person liable to make a payment under a construction contract is known as a Respondent.

You are permitted to issue one payment claim for each reference date under a construction contract. Reference dates are either specified in the contract, or the last day of the month in which the work related to the payment claim was provided.

In order to be a valid payment claim under BCIPA, the following details must be included:

  1. details of the specific work to which the payment claim relates;
  1. the amount of the payment claimed;
  1. the address of the Respondent;
  1. the address of the work site to which the payment claim relates; and
  1. a statement that the claim is made under the BCIPA.

Serving a payment claim

You can serve a payment claim in any way expressly permitted by the terms of the construction contract (if the contract contains such details). However, payment claims can also be served:

  1. on any individual person, by personal delivery, posting, faxing or emailing the notice to the last known address where the person resided or carried on business; and
  1. on any company, by posting the notice to the company’s registered office, or personally delivering the notice to a director of the company.

When to serve a payment claim

A payment claim can be served at any time before the later of:

  1. when specified under the contract; or
  1. six months from completion of the work to which the payment claim relates.

However, if the payment claim is for the final work carried out under a particular construction contract, a claim can also be served within 28 days from last day under the contract when any defects may be directed to be rectified.

Responses to payment claims

When served with a payment claim, a Respondent can either pay the claimed amount or return a payment schedule setting out a proposal for the Respondent’s payment.

Any payment schedule (for payment claims under $750,000) must be returned within either the time specified in the payment claim itself or, if no time is stipulated, ten days from when the claim is served.

Recovering unpaid amounts under BCIPA

In the event that a Respondent fails to either pay the amount proposed in the payment schedule or does not submit a payment schedule by the due date, the Respondent automatically becomes liable for the unpaid balance of the claim as a debt.

Further, if the Respondent’s payment schedule proposes payment of an amount which is less than the payment claim you may have recourse to recovery action.

Adjudication

In any of the abovementioned circumstances, an option potentially available to someone seeking to recover a payment claim is to submit the matter to adjudication.

Adjudication involves an independent third party reviewing the payment claim and all other relevant information to decide on what payment is owed. Adjudication can be a cost effect method of recovering a payment claim, without resorting to the expense of Court proceedings.

Litigation

Where the Respondent owes any claimed amount as a debt, a recovery option is to institute Court proceedings.

Litigation can be a more costly exercise than adjudication. However, in some circumstances it can prove a more effective and direct way of enforcing a debt resulting from a payment claim.

The best strategy to pursue when recovering a payment claim under BCIPA will always depend on the circumstances of each particular case. The team at DSS Law is experienced in representing clients in matters concerning disputes under construction contracts.

If you or your business require representation to recover money under a construction contract, or need advice about following the right procedures to make sure that you are paid in the first place, please contact a member of the DSS Law team.

11/10/2016

DSS Law insight articles are intended to provide commentary and general information. They should not be relied upon as formal legal advice. If you would like specific advice relating to this topic, please contact DSS Law on epost@dsslaw.com.au.