Building and Construction Law

The building and construction industry of the Sunshine Coast and the surrounding areas continues to thrive.  The legislation in this area has recently undergone an overhaul to the effect that it is now vital for builders, subcontractors and persons or entities involved in a building activity to have an understanding of the Building and Constructions Industry Payments Act (BCIPA). 

The BCIPA process is becoming a popular way of resolving disputes that concern:

§         building and construction contracts and agreements;

§         contracts regarding plant and materials used in connections with building and  construction works;

§         contracts or agreements that relate to the supply of a building service (for example: provision of labour or architectural design); and

§         contracts or agreements regarding the manufacturing or supply of building products. 

Failure to understand the BCIPA can have drastic consequences.  These include a Court judgment being obtained against a business or company for payment of an amount that the business or company was not contractually obligated to pay.

The Building and Construction Industry Payments Act

In general terms, the BCIPA attempts to streamline the process of recovering progress claims.  It does this by setting out strict time frames for each party to the contract to serve specific documents on the other party.

The BCIPA Act provides for a ‘payment claim’ to be served on a person or entity liable to pay.  In order to be valid, the payment claim must:

1.       clearly identify the relevant work or goods and services;

2.       state the amount of the payment claim

3.       state that ‘this claim is payable’

4.       state that ‘this claim is made under the Building and Construction Industry Payments Act; and

5.       be served on the person or entity liable to pay.

Once the payment claim is served, the person or entity that was served with the claim can do one of three things;

a.       serve a ‘payment schedule’ on the claimant setting out why no payment will be made; or

b.       make part payment and serve a ‘payment schedule’ setting out why the remainder of the claim is not payable; or

c.       do nothing.

In order for a ‘payment schedule’ to be valid, it must;

1.       Identify the payment claim to which it relates;

2.       State the amount proposed to be paid

3.       If it is less than 100% of the claim, state why and if it is because money is being withheld give reasons for that; and

4.       be served within 10 business days of the payment claim being served or earlier if the contract so provides.

If the person or entity in which served the payment claim does not receive payment of the full amount of the claim or a payment schedule within 10 days of service of the payment claim, the person or entity serving the claim is entitled to:

a.       stop work, even if the contract does not provide such a right, and stay off the job without being in breach until 3 business days after payment is made; and

b.       take action in a Court with special rules applying with the result that the person payment is claimed from;

(i)                   cannot raise a defence or counterclaim (if no payment schedule is delivered within the required time frame) ; or

(ii)                 can only argue about the issues raised in the payment claim; or

c.       Have the dispute resolved by an adjudicator under the process of rapid adjudication and have any order of the adjudicator enforced as a judgment of the Court.

If these time frames of 10 business days are not complied with, whether it be due to a reasonable excuse or otherwise, the party failing to comply is prevented from raising any defence or counterclaim to the action.

Where a payment claim is served within the required time frame and the matter proceeds to arbitration, the parties submission to the arbitrator can only include arguments in relation to issues raised in the payment schedule.  Importantly, the party that failed to serve a payment claim within the 10 business days is prevented from later bringing up any excuses as to why payment was not made.  Therefore, subsequent allegations of breach of contract or an entitlement to liquidated damages are made to no avail.

Our Experience

Sajen Legal’s building and construction lawyers have extensive experience in the BCIPA process, acting for both persons and entities who have submitted payment claims as well as those required to serve a payment schedule.

Our professional assistance is valuable in firstly, confirming the matter falls under the BCIPA and secondly, drafting the payment claims or payment schedule in compliance with the BCIPA.

Further, we have the necessary skill and knowledge to progress the matter to the relevant Court or arbitration, depending on the circumstances of the matter. 

Overall, Sajen legal’s expertise in the BCIPA can help decrease the time of a building and construction dispute from the traditional timeframe of months, if not years, to a resolution in approximately 45 days from the date of service of the payment claim.