CONSTRUCTION Alert – Christmas Payment Claims – How to ensure the festive season remains festive

Dec 15 2015

Publications

The Christmas shut-down period is notorious for the lodgement of payment claims under the security of payment legislation in each of the country’s jurisdictions.  The motive is obvious – there is an advantage to be had by delivering a payment claim in a period in which most of the construction industry is traditionally operating on a skeleton crew only.

Here are our tips to ensure that there are no unwanted presents in your stocking this Christmas.

1 – Know when a payment claim may be served

In each of the jurisdictions, the legislation defines what is a “business day” for the purposes of calculating the relevant time periods in which to act under the various security of payment legislation.  The table below sets out the key information.

In Queensland, whilst last December’s amendments to the Building and Construction Industry Payments Act 2004 (Qld) (BCIP Act) have somewhat minimised the old practice of claimants serving festive payment claims in an attempt to catch out unwary respondents, respondents should still ensure that they are aware when payment claims can be validly served and when the timeframe for responding to payment claims will expire.

The definition of “business day” under the BCIP Act was amended last year to provide for a moratorium period between 22 December and 10 January.  If a payment claim is served on you during that period, the time within which you must respond under the default timeframes in the BCIP Act (i.e. unless your contract provides otherwise) will not start running until Monday, 11 January 2016.

 2 – Be vigilant

Whilst the amendments will generally mean that respondents do not have to respond to festive payment claims until January 2016, it is likely that claimants will still serve payment claims during the Christmas shut-down period.  It is important that you educate your staff to:

  • Recognise payment claims – each of your employees who will be required to review communications over Christmas should be aware that a payment claim each of the jurisdictions must contain the words “This is a payment claim made under the Building and Construction Industry Payments Act [insert jurisdiction]” (or words of similar effect).  Importantly, in New South Wales, Western Australia and the Northern Territory, payment claims do not need to bear any notation to constitute a valid payment claim and any claim received should be considered a potential “payment claim” that requires a response.
    • Know the agreed methods of service between the parties – for example, if the contract allows for service of payment claims to a designated email or fax address, that address should be monitored throughout the holiday period.
    • Be aware of the steps to take upon receipt – you should have processes set up so that employees know who to direct payment claims to immediately upon receipt, to prevent delays and misplaced claims.                     

    3 – Check your registered office

    If your business has a registered office which is external to your own (such as an accountant’s office), you should confirm that the office will be monitoring its communications over the Christmas period.    If you have recently moved, make sure that your registered office has moved with you.

     4 – Deal with the risk upfront

    You may seek to invite contractors to provide claims earlier in December if the relevant ‘reference date’ under the contract falls on or after the first day of the moratorium period.  Should the parties agree to vary the reference date for December, you will be able to deal effectively with payment claims (and payment) over the Christmas period. In addition, you may be able to direct contractors to the proper person who should receive the payment claim during the Christmas period. 

    Further, you could direct the method of service, for example, by way of email to a specific person, or service on a particular facsimile number.

    Using initiative should allow parties to feel comfortable that they will not be ambushed by payment claims (and subsequent adjudications) over the December/January Christmas period.

    To wrap up

    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. 

    Below is a list of our Queensland construction team’s contact details over the Christmas period.

    Andrew Kelly, Partner | 0421 852 048 | akelly@tglaw.com.au
    Jacques Nel, Special Counsel | 0478 310 684 | jnel@tglaw.com.au
    Tom McKillop, Senior Associate | 0433 601 801 | tmckillop@tglaw.com.au
    Chris Collins, Senior Associate | 0410 484 816 | ccollins@tglaw.com.au
    Andrew Mackintosh, Senior Associate | 0403 641 046 | amackintosh@tglaw.com.au
    Chris Newby, Senior Associate | 0409 062 616 | cnewby@tglaw.com.au
    Julian Troy, Senior Associate | 0425 304 453 | jtroy@tglaw.com.au
    Andrew MacGillivray, Lawyer | 0437 373 512 | amacgillivray@tglaw.com.au
    Tarin Olsen, Lawyer | 0402 177 141 | tolsen@tglaw.com.au
    Eloise Kearney, Lawyer | 0415 867 611 | ekearney@tglaw.com.au

    Jurisdiction Comparison Table – Calculating response times over the Christmas period