The Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) provides a process for fast-track resolution of payment disputes for construction work performed in Queensland.
The payment schedule is the mandatory response to a payment claim, which allows a respondent to outline the reasons for withholding payment and set the parameters for any payment dispute.
Preparing a valid payment schedule requires careful attention to the payment claim and reasons for withholding payment, with thorough documentation of all issues in dispute.
This article is aimed to assist a respondent in preparing a valid BIF Act payment schedule and preserve its contractual and statutory rights in respect of any related payment dispute.
Our construction contract lawyers can help you navigate these requirements.
Preparing a valid BIF Act payment schedule is essential for respondents to protect their contractual and statutory rights during any BIF Act payment dispute.
A payment schedule must be issued within the lesser of the time stated in the construction contract or 15 business days of receiving the payment claim (s76(1)(b) BIF Act).
Failure to meet this important deadline is significant, and the consequences are substantial. It will result in the respondent:
The importance of the timely issue of the payment schedule cannot be overstated.
The BIF Act requires that a payment schedule must identify the payment claim to which it responds.
Providing a clear reference to the payment claim date and claimed amount to which the payment schedule is responding, and separately the assessed amount of the payment claim (scheduled amount), and the reasons for the scheduled amount being less than the claimed amount, ensures the payment schedule complies with the BIF Act and protects the respondent’s position in the payment dispute.
This may be done by clearly identifying the document as a payment schedule in response to the subject payment claim, which refers to a list of documents and attachments that comprise the payment schedule.
The payment schedule must identify the correct claimant, consistent with that named in the construction contract and be issued in accordance with the terms of the construction contract, if specified.
Additionally, the issuer of the payment schedule (if not the respondent itself) must have authority to do so under the contract—such as a superintendent or authorised representative of the respondent.
The payment schedule must be given in accordance with contract requirements or otherwise be properly given to the claimant at law. This may include sending it to the claimant’s registered office, a project email address, or another specified method.
If previous payment schedules have been issued in a particular way on the project, the history of conduct may be relied upon to support an argument that payment schedules have been consistently issued and accepted in that way by a claimant without dispute.
A payment schedule should identify any jurisdictional issues in dispute upfront. These jurisdictional issues go to the claimant’s entitlement to payment under the contract.
These jurisdictional issues include identification of:
Additionally, check whether the claimant is licensed to perform all work claimed and whether a licenced trade contractor is identified as having performed the work.
Identifying these issues assists in verifying whether the claimant has a contractual entitlement to payment, and early notification of these key jurisdictional issues may fast-track a resolution by avoiding Adjudication or another dispute process.
Each claim item in the payment claim should be assessed based on the nature of the extent of work completed since the previous claim, ensuring it complies with contractual obligations.
If claimed work is defective or incomplete, these may be reasons for withholding payment, where these defective or incomplete work items are not minor defects or omissions or otherwise prevent work from progressing to the next stage.
If the assessed amount is less than the claimed amount, the payment schedule must provide clear and complete reasons for the reduction.
The assessment may exclude any amounts that do not qualify as construction work under the BIF Act, work omitted or beyond scope, work that is the subject of a separate contract or agreement (noting that a payment claim can only be made for one reference date - which may be complicated a single payment claim seeking payment under a second contract).
Any contractual set-offs or deductions must be fully detailed against the relevant claimed item where possible as the basis for withholding payment.
A payment schedule ultimately sets the framework for the issues in dispute regarding the payment claim, so all reasons for withholding payment must be fully documented. No reasons can be subsequently advanced in the Adjudication process that are not first raised in the payment schedule.
Any expert evidence available and relied upon to support a set-off or deduction to a claimed amount should be provided with the payment schedule.
If responding to a payment claim involves complex calculations in response to delay or disruption claims or calculation of large quantities of varied work or materials supplied, consider obtaining expert evidence to support your contentions with respect to disputed delays, variations, quantities, or rates.
Independent expert reports from delay and disruption experts, quantity surveyors, engineers or industry specialists can provide objective analysis and opinion to justify withholding payment.
A poorly prepared payment schedule is one which fails to properly outline all reasons for withholding payment in response to a payment claim. It also later prevents a respondent from raising valid reasons for withholding payment, because these matters were not included in the payment schedule.
If you need guidance on preparing or responding to a payment claim, our construction law team is here to help. Call Troy Legal today on (07) 3854 2315 or submit an enquiry online.
The Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) provides a process for fast-track resolution of payment disputes for construction work performed in Queensland.
The payment schedule is the mandatory response to a payment claim, which allows a respondent to outline the reasons for withholding payment and set the parameters for any payment dispute.
Preparing a valid payment schedule requires careful attention to the payment claim and reasons for withholding payment, with thorough documentation of all issues in dispute.
This article is aimed to assist a respondent in preparing a valid BIF Act payment schedule and preserve its contractual and statutory rights in respect of any related payment dispute.
Our construction contract lawyers can help you navigate these requirements.
Preparing a valid BIF Act payment schedule is essential for respondents to protect their contractual and statutory rights during any BIF Act payment dispute.
A payment schedule must be issued within the lesser of the time stated in the construction contract or 15 business days of receiving the payment claim (s76(1)(b) BIF Act).
Failure to meet this important deadline is significant, and the consequences are substantial. It will result in the respondent:
The importance of the timely issue of the payment schedule cannot be overstated.
The BIF Act requires that a payment schedule must identify the payment claim to which it responds.
Providing a clear reference to the payment claim date and claimed amount to which the payment schedule is responding, and separately the assessed amount of the payment claim (scheduled amount), and the reasons for the scheduled amount being less than the claimed amount, ensures the payment schedule complies with the BIF Act and protects the respondent’s position in the payment dispute.
This may be done by clearly identifying the document as a payment schedule in response to the subject payment claim, which refers to a list of documents and attachments that comprise the payment schedule.
The payment schedule must identify the correct claimant, consistent with that named in the construction contract and be issued in accordance with the terms of the construction contract, if specified.
Additionally, the issuer of the payment schedule (if not the respondent itself) must have authority to do so under the contract—such as a superintendent or authorised representative of the respondent.
The payment schedule must be given in accordance with contract requirements or otherwise be properly given to the claimant at law. This may include sending it to the claimant’s registered office, a project email address, or another specified method.
If previous payment schedules have been issued in a particular way on the project, the history of conduct may be relied upon to support an argument that payment schedules have been consistently issued and accepted in that way by a claimant without dispute.
A payment schedule should identify any jurisdictional issues in dispute upfront. These jurisdictional issues go to the claimant’s entitlement to payment under the contract.
These jurisdictional issues include identification of:
Additionally, check whether the claimant is licensed to perform all work claimed and whether a licenced trade contractor is identified as having performed the work.
Identifying these issues assists in verifying whether the claimant has a contractual entitlement to payment, and early notification of these key jurisdictional issues may fast-track a resolution by avoiding Adjudication or another dispute process.
Each claim item in the payment claim should be assessed based on the nature of the extent of work completed since the previous claim, ensuring it complies with contractual obligations.
If claimed work is defective or incomplete, these may be reasons for withholding payment, where these defective or incomplete work items are not minor defects or omissions or otherwise prevent work from progressing to the next stage.
If the assessed amount is less than the claimed amount, the payment schedule must provide clear and complete reasons for the reduction.
The assessment may exclude any amounts that do not qualify as construction work under the BIF Act, work omitted or beyond scope, work that is the subject of a separate contract or agreement (noting that a payment claim can only be made for one reference date - which may be complicated a single payment claim seeking payment under a second contract).
Any contractual set-offs or deductions must be fully detailed against the relevant claimed item where possible as the basis for withholding payment.
A payment schedule ultimately sets the framework for the issues in dispute regarding the payment claim, so all reasons for withholding payment must be fully documented. No reasons can be subsequently advanced in the Adjudication process that are not first raised in the payment schedule.
Any expert evidence available and relied upon to support a set-off or deduction to a claimed amount should be provided with the payment schedule.
If responding to a payment claim involves complex calculations in response to delay or disruption claims or calculation of large quantities of varied work or materials supplied, consider obtaining expert evidence to support your contentions with respect to disputed delays, variations, quantities, or rates.
Independent expert reports from delay and disruption experts, quantity surveyors, engineers or industry specialists can provide objective analysis and opinion to justify withholding payment.
A poorly prepared payment schedule is one which fails to properly outline all reasons for withholding payment in response to a payment claim. It also later prevents a respondent from raising valid reasons for withholding payment, because these matters were not included in the payment schedule.
If you need guidance on preparing or responding to a payment claim, our construction law team is here to help. Call Troy Legal today on (07) 3854 2315 or submit an enquiry online.
