Making a Payment Claim BCIPA (QLD) – written by Wayne Davis, Lawyer.
If you are in the building industry, then it is important that you understand the workings of the Building and Construction Industry Payments Act 2004 (QLD) (“BCIPA”) which is an Act established to make payments under an eligible construction contract, (whether written or oral, or partly written and partly oral) easier to manage.
The explanatory notes for the Building and Construction Industry Payments Bill 2004 (QLD) states that:
“The objective of the legislation is to entitle certain persons who carry out construction work (or who supply related goods or services) to a timely payment for the work they carry out and the goods and services they supply. This will be achieved through establishing a procedure for securing progress payments to which a person becomes entitled under this Bill.”
If you are eligible, then making a claim using BCIPA is a relatively straightforward and structured process allowing you to seek payment for the goods and/or services you have provided.
This Article will explain the key points and processes for making a claim under BCIPA.
Eligible Person under BCIPA
BCIPA relates to payments under a construction contract.
Construction contract is defined as:
“construction contract means a contract, agreement or other arrangement under which one party undertakes to carry out construction work for, or to supply related goods and services to, another party”
Construction work is defined at section 10 of BCIPA and are quite extensive, but includes:
“the construction of buildings or structures; construction of any works forming, or to form, part of land; the installation in any building, structure or works of fittings forming, or to form, part of land; the external or internal cleaning of buildings, structures and works; any operation that forms an integral part of, or is preparatory to or is for completing, work of the kind referred to in this section; painting or decorating; testing of soils and road making materials;”
BCIPA does not include drilling for, or extraction of, oil or natural gas; or mining.
There are also a number of construction contracts that BCIPA does not apply to which are referenced under section 3 of BCIPA.
If you have an eligible construction contract for work defined as construction work, and you have a right to a progress payment, then you may be able to make a BCIPA payment claim.
Progress Payment
If you contract contains a payment provision which is not a void payment provision, you are entitled to a progress payment on the day on which the payment becomes payable under the provision.
Alternatively, if you contract does not contain a payment provision or contains a payment provision which is a void payment provision, you are entitled to a progress payment ten (10) business days after a payment claim for the progress payment is made.
BCIPA Payment Claim
If you tick all of the boxes above then you may be able to make a payment claim.
Section 17 of BCIPA says that a payment claim:
“must identify the construction work or related goods and services to which the progress payment relates; and
must state the amount of the progress payment that the claimant claims to be payable (the claimed amount); and
must state that it is made under this Act.”
Section 17 of BCIPA also says that the claimed amount may include any amount:
“that the respondent is liable to pay the claimant under section 33(3); or
that is held under the construction contract by the respondent and that the claimant claims is due for release.”
A payment claim can be your invoice for the work conducted as long as it is compliant with BCIPA.
There are strict requirements in BCIPA for the issuing and serving of payment claim. Contact our solicitors today to get legal assistance with issuing a payment claim.
Time Requirements for Payment Claims
Section 17A of BCIPA defines the time requirements for making a payment claim.
If the payment claim is not related to a final payment, then the claim must be served the later of the time allowed in the construction contract, or 6 months after the work to which the claim relates was last carried out.
If the payment claim is related to a final payment, then the claim must be served the later of the time allowed in the construction contract, or 28 days after the end of the last defects liability period, or 6 months after the completion of the works.
After you have validly served a payment schedule, the respondent will then have to serve you with a payment schedule.
Payment Schedules after Payment Claim
Once you have validly served the BCIPA payment claim, or you have been served with a payment claim, the respondent has either the time required under a provision of the construction contract; or if you do not have such a provision, 10 business days after the payment claim was served, to serve a payment schedule.
Section 18 of BCIPA says a payment schedule must identify the payment claim to which it relates; and must state the amount of the payment that the person proposes to make.
If the amount in the payment schedule is less than the amount claimed in the payment claim, the payment schedule must state why the scheduled amount is less and the reason for withholding the payment.
Valid Service under BCIPA
Section 103 of BCIPA says that a notice or other document under BCIPA can be served pursuant to a term or terms in the construction contract; or pursuant to section 39 of the Acts Interpretation Act 1954 (QLD) which says:
“If an Act requires or permits a document to be served on a person, the document may be served—
On an individual—by delivering it to the person personally; or by leaving it at, or by sending it by post, telex, facsimile or similar facility to, the address of the place of residence or business of the person last known to the person serving the document; or
on a body corporate—by leaving it at, or sending it by post, telex, facsimile or similar facility to, the head office, a registered office or a principal office of the body corporate.”
Consequences for not Serving a Payment Schedule
Section 19 of BCIPA says that if a debtor owes you money under a construction contract, and a payment schedule is not served within the time requires under the contract, or 10 business days after serving the payment claim, then the respondent becomes liable to pay the enter amount of the payment claim by the due date.
If the debtor does not pay the amount in the payment claim by the due date then you can recover that amount as a debt in the Court with jurisdiction; or make an adjudication application.
Consequences for Non-payment of Payment Schedule
Section 20 of BCIPA says that if a debtor owes you money under a construction contract, and a payment schedule is served within the right timeframe, but the debtor fails to pay the scheduled amount or any part of the scheduled amount on or before the due date, then you can recover that amount as a debt in the Court with jurisdiction; or make an adjudication application.
Notice before Commencing Proceedings
If you intend to recover the amount mentioned above as a debt in the Court with jurisdiction, then before proceeding you need to give the debtor a notice under section 20A(2) of BCIPA; and the 5 business days for the debtor to serve the payment schedule, as stated in the notice, has ended.
Section 20A says that the notice must be given to the debtor within 20 business days immediately following the due date for payment; and state that the debtor may serve a payment schedule on the claimant within 5 business days after receiving the notice; and state it is made under this Act.
If you correctly serve this notice, and the 5 business days have elapsed, you are then able to recover the amount of the payment claim as a debt in the Court with jurisdiction.
Contact one of our solicitors …
What is an Adjudication?
If you did not want to recover the amount of the payment claim as a debt in the Court with jurisdiction then you could apply to get the matter resolved by adjudication.
An adjudication is a process whereby a professional trained in BCIPA dispute resolution assesses the payment schedule and the payment claim and makes a determination in an attempt to resolve this dispute.
The adjudication application cannot be made, as above, unless a notice has been given under Section 20A of BCIPA.
Section 21 of BCIPA says that an adjudication application must be in the approved form; and must be made in the correct timeframe; and must identify the payment claim and the payment schedule to which it relates; and must be accompanied by the fee prescribed by regulation for the application; and may contain the submissions relevant to the application the claimant chooses to include.
A list of BCIPA adjudicators can be found here.
For further information, please contact Wayne Davis, Lawyer on 07 5444 4750 or [email protected].
Located in Maroochydore on the Sunshine Coast, Miller Sockhill Lawyers regularly advise clients on construction law matters.
