A payment claim process using the old BCIPA – Building & Construction Industry Payments Act 2004 (Qld) has been repealed and replaced with Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“BIFA”).
The provisions of the repealed legislation have been amended and incorporated into BIFA.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 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 Payment Claims
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
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
Call 1300 545 133 and speak to our debt recovery lawyers
