Andrew Kelly and Iain Hurn

Festive season payment claims

Andrew Kelly and Iain Hurn

7 December, 2018

Security of payment

Christmas is just around the corner, and as we approach the end of the year, it is important to remember the timing requirements for payment claims and payment schedules under security of payment legislation in Queensland and its interstate equivalents.  With the introduction of significant changes to security of payment legislation under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act), set to commence on 17 December 2018, Queenslanders must be particularly diligent.

Here are our tips to ensure that presents are your only surprise this festive season.

Impact of Building Industry Fairness (Security of Payment) Act 2017 (Qld)

It has been a tumultuous year in relation to security of payment legislation in Queensland.  The BIF Act consolidates the legislation that deals with securing payment – the Building and Construction Industry Payments Act 2004 (Qld) (BCIP Act) and the Subcontractors’ Charges Act 1974 (Qld) (SCA) into one Act.  The BIF Act also introduces project bank accounts.  You can read more about the BIF Act by clicking here.

Importantly, if a payment claim is made prior to 17 December 2018, the current regime under the BCIP Act applies, however if a payment claim is made from 17 December 2018, the new regime under the BIF Act will apply to that payment claim.

Know when your payment schedule must be served

Click here to view the SOP Comparison table and calendar that sets out the non-business days for each state and territory.  This table will help you to time your payment schedules correctly in each jurisdiction as the meaning of ‘Business Day’ changes from State to State.  It is crucial that you understand the different timing for each state so that you are not caught out and miss the correct date to serve a schedule.

Check the contract

It is important to note that your contract may provide that a payment certificate under the contract must be given within a shorter period than permitted by the security of payment legislation for giving a payment schedule.  In other words, the definition of business day in your contract may be different from the definition of business day as it is expressed in the security of payment legislation.  In most cases, an obligation to give a payment certificate under the contract will not affect the period in which you may give a payment schedule under the security of payment legislation, however we suggest that it is prudent to give a payment schedule within the period stated in the contract for giving a payment certificate.

Check your registered office

You should confirm that your registered office will be monitoring communications over the Christmas period – it is open to claimants to serve payment claims at your registered office in addition to any address in the contract.

On this point, upon the commencement of the BIF Act in Queensland, there will no longer be a requirement for Queensland payment claims to be endorsed with words to the above effect.  We recommend that you ensure staff are aware of the legislative changes that will occur before Christmas, and review your current systems to make sure that when you receive an invoice that may be a payment claim, it is dealt with appropriately, within the required timeframe.

If your contract permits service of payment claims to an email address, ensure that the inbox is monitored, or that emails will be forwarded to an appropriate person when they are received.  In addition, it may be prudent to request that contractors provide their December claims before Christmas together with a direction for Christmas claims to be provided to a dedicated individual at a specific email address.

Conclusion

Be aware of the timeframes required for your payment schedules this Christmas period.  Take note of the relevant blackout periods for each state and check your contracts to ensure that you do not run the risk of failing to deliver a payment schedule on time.  Given the re-introduction of summary judgment for failing to issue a timely payment schedule in Queensland, we expect activity to be heightened in January.  If you have concerns or require advice in relation to a payment claim, or a document that you suspect might be a payment claim, over the Christmas period, please contact us.

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au

Tom McKillop | Senior Associate | +61 7 3338 7530 | tmckillop@tglaw.com.au

Alicia Dark | Senior Associate | +61 7 3338 7529 | adark@tglaw.com.au

Aaron Benstead | Senior Associate | +61 7 3338 7903 | abenstead@tglaw.com.au