A payment claim process using the old BCIPA – Building & Construction Industry Payments Act 2004 (Qld) has been repealed and replaced with Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“BIFA”).
The provisions of the repealed legislation have been amended and incorporated into BIFA.
Progress Payments and Payment Claims from the previous BCIPA – Building & Construction Industry Payments Act 2004 (Qld) are dealt with in Chapter 3 of BIFA.
This article will deal with making a payment claim under BIFA in more detail below.
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Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.
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Making a BIFA Payment Claim
If you are eligible, then making a claim using BIFA is a relatively straightforward and structured process allowing you to seek payment for the goods and/or services you have provided.
Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.
Eligible Person to give a Payment Claim under BIFA
BIFA relates to payments under a construction contract.
Construction contract (whether written or oral, or partly written and partly oral) is defined as:
“construction contract” means a contract, agreement or other arrangement under which 1 party undertakes to carry out construction work for, or to supply related goods and services to, another party.
Construction Work is defined at section 65 of BIFA and are quite extensive, but includes:
the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures, whether permanent or not, forming, or to form, part of land … of any works forming, or to form, part of land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for land drainage or coast protection …
In BIFA Construction Work does not include:
the drilling for, or extraction of, oil or natural gas; the extraction, whether by underground or surface working, of minerals, including tunnelling or boring, or constructing underground works, for that purpose.
Related Goods and Services are defined at section 66 of BIFA and include the following goods:
materials and components to form part of any building, structure or work arising from construction work … plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;
And also include the following services:
the provision of labour … architectural, design, surveying or quantity surveying services … building, engineering, interior or exterior decoration or landscape advisory services … soil testing services … and goods and services, relating to construction work, of a kind prescribed by regulation.
The few that are included in this article are just a small sample of the actual types of construction works and related goods & services. You should follow the links to read them all.
There are also a number of construction contracts that BIFA does not apply to which are referenced under sections 61(2) to 61(4) of BIFA.
If you have an eligible construction contract for work defined as construction work, or the provision of related goods and services, then you might have a right to a progress payment.
Right to a BIFA 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.
Section 70 of BIFA says:
From each reference date under a construction contract, a person is entitled to a progress payment if the person has carried out construction work, or supplied related goods and services, under the contract.
A Reference Date under BIFA is defined at section 67 and says:
A “reference date” for a construction contract, means … a date stated in, or worked out under, the contract as the date on which a claim for a progress payment may be made for construction work carried out, or related goods and services supplied, under the contract
Alternatively, if you contract does not contain a reference date then the reference date is the last day of the month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract … and the last day of each later month.
If you have an eligible construction contract for work defined as construction work, or the provision of related goods and services, and you have a right to a progress payment, then you may be able to make a BIFA payment claim.
BIFA Payment Claim
If you tick all of the boxes above, then you may be able to make a payment claim.
Section 68 of BIFA says that a payment claim:
- Identifies the construction work or related goods and services; and
- States the amount (the claimed amount) of the progress payment that the claimant claims; and
- Requests payment of the claimed amount; and
- Includes the other information prescribed by regulation.
Section 68 of BIFA also says that a written document bearing the word ‘invoice’ is taken to be a request for payment.
There are strict requirements in BIFA for the issuing and serving of payment claim. Contact our solicitors today to get legal assistance with issuing a payment claim.
Time Requirements for a Payment Claim
Section 75 of BIFA 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 for in the construction contract; or
- Six (6) months after the work to which the claim relates was last carried out; or
- The related goods and services to which the claim relates were last supplied.
If the payment claim is related to a final payment, then the claim must be served the later of
- The time allowed for in the construction contract; or
- Twenty-eight (28) days after the end of the last defects liability period; or
- Six (6) months after the completion of the works; or
- Six (6) months after the complete supply of related goods and services to be supplied under the construction contract.
Summary of Eligibility for Payment Claim
In summary to the above a party:
- Who has a written or oral construction contract;
- Who has provided construction work or related goods and services;
- Who has given an eligible payment claim (an invoice) to the other party; and
- Who has complied with the time requirements of BIFA.
Than that that party is entitled to the protections offered under the new BIFA legislation.
After the party has validly served a BIFA payment claim, the respondent will then have to give a BIFA payment schedule.
Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.
Payment Schedules after Payment Claim
Once you have validly served the BIFA payment claim section 76 of BIFA says:
A respondent must respond to the payment claim by giving the claimant a payment schedule within whichever of the following periods ends first … the period, if any, within which the respondent must give the payment schedule under the relevant construction contract … or 15 business days after the payment claim is given to the respondent.
Consequences for not Giving a Payment Schedule
Section 77 of BIFA says:
If a respondent given a payment claim does not respond to the claim by giving the claimant a payment schedule as required under section 76 … the respondent is liable to pay the amount claimed under the payment claim to the claimant on the due date for the progress payment to which the payment claim relates.
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 78 of BIFA says:
If a respondent given a payment claim for a progress payment does not pay the amount owed to the claimant in full on or before the due date for the progress payment … The claimant may either … recover the unpaid portion of the amount owed from the respondent, as a debt owing to the claimant, in a court of competent jurisdiction … or apply for adjudication of the payment claim.
Section 78 of BIFA defines Amount Owed to mean:
“amount owed” to a claimant for a payment claim, means:
(a) if the respondent did not respond to the payment claim with a payment schedule as required under section 76 —the amount claimed under the payment claim; or
(b) if the respondent did respond to the payment claim with a payment schedule as required to do so under section 76 —the amount proposed to be paid under the payment schedule.
Notice before Commencing Court 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 99 of BIFA; and
- The five (5) business days to the debtor that you intend to commence legal action, as stated in the notice.
Section 99 of BIFA says that the notice must be given to the debtor within 30 business days immediately following the due date for the progress payment; and it must be in the approved form.
The approved form for this notice is the Form S99 – Warning Notice – Notice Of Intention To Start Legal Proceedings.
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.
The benefit of commencing legal action in the Court with jurisdiction is that the respondent debtor is statute-barred from raising a defence or bring any counterclaim.
Section 100(3) of BIFA says in relation to proceedings to recover the unpaid amount as debt:
The respondent is not, in those proceedings, entitled (a) to bring any counterclaim against the claimant; or (b) to raise any defence in relation to matters arising under the construction contract.
Valid Service under BIFA
Section 102 of BIFA says that a notice or other document under this chapter 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.
If the claimant does not want to commence legal action to recover the debt in the Court, then the claimant can apply for an adjudication application.
What is a BIFA 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 BIFA dispute resolution assesses the payment schedule and the payment claim and makes a determination in an attempt to resolve this dispute.
A BIFA Adjudication Application
Section 79 of BIFA says that an adjudication application:
- Must be in the approved form; and
- Must be made in the correct time-frame; 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 BIFA adjudicators can be found here.
Once an adjudication application has been accepted by an adjudicator, the other party must provide the adjudicator with an adjudication response.
The adjudication response must be given within the time required by section 83 of BIFA.
The adjudicator must then decide the matter within the time required by section 85 of BIFA.
Read our great article on Making an Adjudication Application in Queensland.
You can also seek a judicial review of the adjudication decision in the Court.
Adjudication Certificate
Once the adjudicator has made the decision, then they must pursuant to section 91 of BIFA provide the claimant with an adjudication certificate.
The adjudication certification certificate must include:
- The name of the claimant;
- The name of the respondent who is liable to pay the adjudicated amount;
- The adjudicated amount;
- The date on which payment of the adjudicated amount was required to be paid to the claimant;
- The rate of interest payable on the adjudicated amount;
- The fees, identified in the decision, that the respondent is to pay;
- That the certificate is made under this Act.
The adjudication certificate can then be registered in the Court with competent jurisdiction and enforced as a money order of that Court.
Enforcement of an Adjudication Certificate
Section 93 of BIFA says:
An adjudication certificate may be filed as a judgment for a debt, and may be enforced, in a court of competent jurisdiction.
The adjudication certificate must be accompanied by an affidavit of the claimant stating that the whole or a part of the adjudicated amount has not been paid to the claimant at the time the certificate is filed.
Rule 793 of the Uniform Civil Procedure Rules 1999 (QLD) says:
“enforceable money order” of a court, means (a) a money order of the court; or (b) a money order of another court or tribunal filed or registered under an Act in the court for enforcement.
Because section 93 of BIFA allows for the adjudication certificate to be registered and enforced, in a court of competent jurisdiction, then rule 793 applies and the decision becomes an enforceable money order.
Conclusion
The new Building Industry Fairness (Security of Payment) Act 2017 (Qld) includes some good amendments to assist the payment of monies the subject to building and construction disputes.
Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.
START NOW – FAST TURNAROUND – PROVEN RESULTS
SPEAK TO A CONSTRUCTION LAWYER TODAY
Call 1300 545 133 and speak to our debt recovery lawyers
Making a BIFA Payment Claim Flow Diagram
Making a Payment Claim under BIFA (QLD) FAQ
Welcome to our comprehensive FAQ section on the Building Industry Fairness (Security of Payment) Act (BIFA) in Queensland.
Here, you’ll find detailed answers to common questions, providing clarity and guidance on navigating this important legislation in the construction industry.
What are the payment terms for BIFA?
The payment terms under the Building Industry Fairness (Security of Payment) Act (BIFA) are determined by the reference dates specified in the construction contract. If the contract does not specify reference dates, then the default is the last day of the month in which the construction work was first carried out or related goods and services were first supplied, and subsequently, the last day of each following month. These terms dictate when a party is entitled to make a progress payment claim.
What is Section 68 of BIFA?
Section 68 of the Building Industry Fairness (Security of Payment) Act (BIFA) outlines the requirements for a valid payment claim. It states that a payment claim must identify the construction work or related goods and services, state the claimed amount, request payment of this amount, and include any other information prescribed by regulation. This section is crucial as it defines what constitutes a legitimate payment claim under BIFA, ensuring clarity and fairness in the payment process.
How do you serve a payment claim under BIFA?
To serve a payment claim under the Building Industry Fairness (Security of Payment) Act (BIFA), the claim must be delivered to the party liable to make the payment. This can be done in accordance with the terms of the construction contract or as per the Acts Interpretation Act 1954 (QLD), which allows for service by personal delivery, post, telex, facsimile, or similar facility. It’s important to ensure that the service of the payment claim complies with BIFA’s requirements to maintain its validity.
What is Section 75 of BIFA?
Section 75 of the Building Industry Fairness (Security of Payment) Act (BIFA) specifies the time requirements for serving a payment claim. If the claim is not related to a final payment, it must be served within the later of: the time allowed in the construction contract; six months after the work to which the claim relates was last carried out; or the related goods and services were last supplied. For final payment claims, the time frame extends to the later of: the time allowed in the contract; 28 days after the end of the last defects liability period; or six months after the completion of the works or the complete supply of related goods and services. This section ensures that payment claims are made within a reasonable and clearly defined period.
What is the Building Industry Fairness (Security of Payment) Act 2017 (BIFA) in Queensland?
The Building Industry Fairness (Security of Payment) Act 2017, commonly known as BIFA, is legislation in Queensland that governs the process of making payment claims in the construction industry. It replaced the Building & Construction Industry Payments Act 2004 (BCIPA) and includes amendments to assist in resolving building and construction disputes. BIFA sets out the rights and obligations of parties in construction contracts, particularly regarding progress payments and adjudication processes.
Who is eligible to make a BIFA payment claim?
An eligible person to make a BIFA payment claim is anyone involved in a construction contract, whether it’s written, oral, or a combination of both. This includes parties undertaking construction work or supplying related goods and services, as defined under BIFA. The act covers a wide range of construction activities but excludes certain works like oil drilling or mineral extraction.
What constitutes a right to a BIFA progress payment?
A right to a BIFA progress payment exists if your construction contract contains a payment provision that is not void and stipulates the timing of payments. Under BIFA, from each reference date in the contract, a person who has carried out construction work or supplied related goods and services is entitled to a progress payment.
How is a BIFA payment claim made?
Making a BIFA payment claim involves identifying the construction work or related goods and services, stating the claimed amount, and requesting payment. The claim must be in writing and include all information prescribed by BIFA regulations. It’s crucial to serve the payment claim within the time limits set by BIFA to ensure its validity.
What are the time requirements for making a BIFA payment claim?
The time requirements for making a BIFA payment claim vary depending on whether it’s a final payment or not. Generally, a claim must be served within six months after the work was last carried out or the goods and services were last supplied. For final payments, the claim must be served within 28 days after the end of the last defects liability period or six months after the completion of the works.
What happens after a BIFA payment claim is served?
After a BIFA payment claim is served, the respondent must provide a payment schedule within 15 business days or the period specified in the contract. The payment schedule should detail the amount to be paid and any reasons for withholding payment. Failure to provide a payment schedule can lead to legal consequences for the respondent.
What are the consequences of not giving a BIFA payment schedule?
If a respondent fails to provide a BIFA payment schedule, they are liable to pay the full amount claimed by the due date for the progress payment. Non-compliance can result in the claimant being able to recover the claimed amount as a debt in court or through adjudication.
What are the consequences for non-payment of a BIFA payment schedule?
If a respondent does not pay the amount stated in the payment schedule by the due date, the claimant can recover the unpaid portion as a debt in a court of competent jurisdiction or apply for adjudication of the payment claim. This ensures that claimants have a means to enforce payment.
What is a BIFA adjudication?
A BIFA adjudication is a dispute resolution process where a trained professional assesses the payment claim and payment schedule to make a determination. It’s an alternative to court proceedings and is designed to provide a quicker resolution to disputes arising from payment claims under BIFA.
How is a BIFA adjudication application made?
To make a BIFA adjudication application, you must submit it in the approved form within the correct timeframe, identifying the payment claim and payment schedule. The application should be accompanied by the prescribed fee and may include relevant submissions. This process is crucial for resolving disputes without resorting to court proceedings.
What is an adjudication certificate in BIFA?
An adjudication certificate in BIFA is a document provided by the adjudicator once a decision is made. It includes details like the names of the claimant and respondent, the adjudicated amount, the due date for payment, and the rate of interest payable. This certificate can be registered in court and enforced as a money order.
How can an adjudication certificate be enforced under BIFA?
An adjudication certificate under BIFA can be filed as a judgment for a debt in a court of competent jurisdiction. It must be accompanied by an affidavit stating that the adjudicated amount has not been paid. Once filed, it becomes an enforceable money order, ensuring that claimants can enforce payment.
What is the importance of valid service under BIFA?
Valid service under BIFA is crucial for ensuring that notices and documents are legally recognized. This can be done according to terms in the construction contract or as per the Acts Interpretation Act 1954 (QLD). Proper service ensures that all legal requirements are met for making claims and initiating proceedings.
What should be done before commencing court proceedings under BIFA?
Before commencing court proceedings under BIFA, a notice must be given to the debtor within 30 business days following the due date for the progress payment. This notice, in the approved form, informs the debtor of the intention to start legal proceedings, giving them a chance to settle the debt before court action is taken.
Why is it important to adhere to BIFA’s strict time limits?
Adhering to BIFA’s strict time limits is essential to ensure that your payment claims and any subsequent legal actions are valid. Missing these deadlines can result in losing the right to claim payments or enforce payment schedules, significantly impacting the financial outcomes of construction projects.
