December 23, 2020
The Christmas closure can be a confusing time for principals and contractors alike in responding to an Adjudication Application made under the relevant Security of Payment legislation. During this time it is vital to understand what constitutes service and when time starts running in the Adjudication process.
It is important your staff recognise an Adjudication Application, who to immediately alert if they receive a copy and the timeframes involved in the process. It is essential staff at registered offices are vigilant in notifying Project Managers if served.
Most contracts will outline the process for service, including the address for service of each respective participant, and often, the notice requirements for effective service.
Notwithstanding the contractual method of service, service in accordance with s109x of the Corporations Act 2001 (Cth) will also be valid. This section provides a document may be served on a company by:
- Leaving it at, or posting it to, the company’s registered office; or
- Delivering a copy of the document personally to a director of the company who resides in Australia.
The security of payment legislation in Queensland, New South Wales and Victoria, each have specific nuances concerning the commencement of critical timeframes following service of an Adjudication Application.
With the tight timeframes involved in the process, every day counts to provide the best Adjudication Response possible, and failure to comply will affect your right of response.
Queensland
The adjudication process is governed by Chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) and is subject to strict legislative timeframes (including its Christmas closure period).
Under BIFA, the Christmas closure is from 22 December 2020 to 10 January 2021 (inclusive). Whilst an Adjudication Application could still be lodged during this period (subject to the office hours of the QBCC), it will not be received, and the respondent’s timeframe does not commence, until 11 January 2021.
The timeframes under BIFA (s 83) for an Adjudication Response include:
- For a standard payment claim (being a claim for less than $750,000), 10 business days after service of the Adjudication Application or 7 business days after receiving notice of the adjudicator’s acceptance of the Adjudication Application, whichever is later; or
- For a complex payment claim (being a claim for more than $750,000), 15 business days after service of the Adjudication Application or 12 business days after receiving notice of the adjudicator’s acceptance.
After a claimant files an Adjudication Application the registrar must, within 4 business days after the application is received, refer the application to an eligible adjudicator. The adjudicator then has a further 4 business days the accept or reject the referral.
BIFA also allows the responding party to apply to the adjudicator for an extension of time of up to 15 additional business days if responding to a complex payment claim.
New South Wales
The adjudication process is governed by Division 2 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (BCISPA).
Under the BCISPA, the Christmas closure is 25 December 2020 to 3 January 2021 (inclusive). Whilst an Adjudication Application could still be lodged during this period (subject to the office hours of the Authorised Nominating Authority), it will not be received, and the respondent’s timeframe does not commence, until 4 January 2021.
Once an Adjudication Application is served in accordance with s 17 of BCISPA, the Adjudication Response is due 5 business days after receipt or 2 business days after the adjudicator confirms acceptance of the Application (whichever is later).
Victoria
The Adjudication Application process is governed by Division 2 of the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOPA).
Under the SOPA, there is no Christmas closure. Rather, the only dates that do not affect legislative timeframes are those days that fall outside of what is considered a business day. This includes Saturdays, Sundays and public holidays (25 and 28 December 2020, and 1 January 2021).
The above is particularly important given many staff are away during this period and those that remain may not recognise the importance and cruciality of the SOPA timeframes. Following service, timeframes of the adjudication process commences.
Under s 21 of the SOPA, a party only has 5 business days after receiving the Adjudication Application or 2 business days after the adjudicator confirms acceptance of the application (whichever is later), to respond.
The time for serving the Adjudication Response is strict and cannot be extended, regardless of the value of the claim or the volume of material prepared by the claimant. It is therefore particularly important to ensure all staff are vigilant and aware of possible Payment Claims/Adjudication Applications being made during this time.
Lamont Project & Construction Lawyers
Our Team have the knowledge and experience to assist both principals and contractors with any Security of Payment or BIFA related issues. Project Managers need to be aware of possible claims over the Christmas closure period and alert their staff working over the break what to look out for. If you would like to discuss any matters raised in the above article as it relates to your specific circumstances, please contact Lamont Project & Construction Lawyers.
The contents of this article is for information purposes only; it does not discuss every important topic or change in law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding your specific circumstances.
Contact: Peter Lamont – [email protected] or Trent Jones – [email protected]