A Claimant is a person who has carried out construction work, or supplied related goods and services, and is or claims to be entitled to a payment claim under a construction contract. Any sub-contractor who renders an invoice for payment is a claimant.
However to be a claimant under the Act the person against whom the claim is made (the Respondent) must be advised that the Act is being utilised in relation to a payment claim. This is easily achieved by including on the invoice the notice: “This is a payment claim made under the Building and Construction Industry Payments Act 2004 Queensland” or words of similar effect.
Am I entitled to make a payment claim under the Act?
Those who can make a payment claim under the Act include:
- contractors against clients (eg. principals, developers, owner-builders);
- subcontractors against contractors;
- suppliers of building components against purchasers;
- architects, engineers, and others (eg. consultants) providing advice against clients;
- plant and equipment hirers against clients.
Construction work and services can be claimed under the Act even if the contract is not written and/or does not provide for progress payments with only a single payment to be made when work is completed.
Unless the construction contract provides for a longer period, the claimant has 12 months to serve a payment claim on the respondent from the time construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied. The payment claim should be from each reference date.
Can the Act be used to secure payment from Homeowners?
The Act does not apply to a construction contract for the carrying out of residential building work on such part of any premises the respondent resides in or proposes to reside in (a resident-owner under the Domestic Building Contracts Act 2000). But if a contract includes work other than on the respondent’s residence, then that work is subject to the Act. The Act applies to contracts involving residential investment properties, landlords, strata title bodies corporate, developers, builders, contractors, sub-contractors, consultants and suppliers.
Important qualification: The definition of resident-owner under the Domestic Building Contracts Act 2000 excludes a person who holds (or should hold) an owner-builder's permit under the Queensland Building Services Authority Act 1991. Therefore an owner-builder qualifies as a respondent and may be served with a payment claim.
A claimant can make a payment claim on the respondent for:
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Construction work done;
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Construction materials or plant provided;
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Consulting services provided;
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Interest on overdue progress payments;
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Losses and additional expenses due to work being deleted from contract while work is suspended under the protection of the Act;
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Cash security and retention monies; and
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At the end of contract, a claim can be made for the final payment.
How do I make a payment claim?
A payment claim must:
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Establish the reference date for making a payment claim. The reference date is either the time stated in contract or, if there is no time stated, the last day of the month.
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Describe the construction work, related goods or related services performed under contract and state the amount that is claimed based on the value of that work to the reference date. The payment claim will usually be in the form of a Tax Invoice.
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Include the notice “This is a payment claim made under the Building and Construction Industry Payments Act 2004 Queensland” or a similar statement with that meaning.
- Be served on or after each reference date by delivering, posting or faxing it to the respondent. The contract or common practice may provide for other methods of service, such as email.
- Record the date of service. This is the date that the respondent receives the payment claim. Retain evidence of serving such as facsimile journal reports or courier receipts.
What should I include with the payment claim?
The payment claim may also include attachments containing:
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Statements detailing the extent of the work completed;
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Completion certificates;
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Delivery dockets;
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Photographs;
- Other applicable contract documentation requirements.
How do I serve a Payment Claim
The payment claim is not served until it is delivered in person to the respondent or lodged during normal business hours at the respondent's ordinary place of business or posted or faxed to the respondent's ordinary place of business (or as otherwise provided by the contract).
A record of the time, date and manner of service on the respondent should be kept. The time for the respondent to provide the payment schedule (response) runs from the date of receipt of the payment claim. A respondent may deny receipt of the payment claim in which case the claimant must be able to evidence the date of service.
In the absence of any contract provision, we suggest that service of the payment claim be performed in one of the following ways with the preferred option being personal delivery by courier who requires a signature.
- Courier - signature required
- Registered mail - signature required
- Fax - Print and keep full page fax journal report as evidence of transmittal
- Email (only to an email address which has a history of usage between the parties) - In email options, tick both "request a delivery receipt" and "request a read receipt".
Can I resubmit a payment claim?
Only one payment claim can be made under the Act for each reference date. The reference date is either the date stated in the contract for making payment claims or, if there is no date, it is the last day of each month.
However, if a payment claim was served but did not include the notice that it is a payment claim under the Act, than the claimant remains entitled to make a payment claim under the Act for the same reference date.
Monies not paid in respect of a previous payment claim can be included in the next payment claim.
When should I receive payment?
The date by which a claimant is entitled to be paid is the “due date for payment”.
The due date for payment under the Act is the date on which a payment claim becomes due and payable either by virtue of a valid contract provision or, if there is no such valid provision, 10 business days after the payment claim is made. Proper calculation of this date is imperative as a number of milestones under the Act are calculated from this date.
The due date for payment under the contract is not necessarily the same as the due date of payment under the Act. If the contract provides that payment is due 28 days after invoice that is the due date under the contract. However this date under the contract is irrelevant for recovering debts under the Act, unless the invoice was endorsed with the words:
“This is a payment claim made under the Building and Construction Industry Payments Act 2004 Queensland".
If the contract provides that payment is due 28 days after invoice then, upon service of the payment claim, the due date for payment under the Act is 28 days later. Endorsing all invoices as a payment claim ensures that claimants don’t need to wait for additional, often lengthy, periods before seeking recovery of debts under the Act.
From this, it should be clear that the due date of payment under the Act (regardless of any contract provision) can’t occur prior to service of the most current payment claim.
If the claimant is not paid by the due date, they have a right to interest at the greater of the rate, if any, in the contract or the rate on Supreme Court judgments. The Supreme Court rate changes from time to time but is usually around 9% per annum.
A “business day” under the Act is any day other than a Saturday, Sunday, public holiday and the days between Christmas and New Year.
How long do I have to wait for a response?
If the respondent is not willing to pay the claimant in whole or part the claim, they have a maximum of 10 business days after receipt of the payment claim to provide a payment schedule. This is a written statement of the amount the respondent is willing to pay and the reasons for not paying any part of the payment claim.
If the respondent fails to serve a payment schedule before the end of 10 business days, the Act requires the respondent to pay the whole amount of the payment claim.
What happens if the respondent provides a payment schedule for less than the amount claimed?
The claimant can:
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Accept the reasons given by the respondent for not paying the full payment claim and wait for the respondent to pay the scheduled amount by the due date.
Note: If the respondent served a valid payment schedule you are in the wrong area of this website. Please refer to payment schedule served flowchart.
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Apply in writing to Adjudicate Today for adjudication of the disputed amount (the adjudication application). The application must be made within 10 business days after receiving the payment schedule.
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Sue in court or commence any dispute resolution process permitted by the construction contract.
The claimant can:
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Apply in writing to Adjudicate Today for adjudication of the full claimed amount regardless of whether the claimant was prepared to accept a lesser scheduled amount within 10 business days.
Note: If the respondent served a valid payment schedule you are in the wrong area of this website. Please refer to payment schedule served flowchart.
or -
Sue in court or commence any dispute resolution process permitted by the construction contract.
and -
Give notice of intention to suspend work.
What happens if the respondent does not provide a payment schedule?
Please move to the next step on the "Payment Schedule NOT served flowchart" being "Respondent fails to serve Payment Schedule within 10 business days after receipt of the Payment Claim or such shorter period as provided by the construction contract".
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