December 18, 2023
As industry participants dust off their hard hats and construction sites take a festive pause, it is crucial to remember the implications of the Building Industry Fairness (Security of Payment) Act 2017 (‘BIFA’) over the Christmas and New Year period.
BIFA defines a ‘business day’ to exclude a Saturday or Sunday; a public holiday, special holiday or bank holiday in the place which any relevant act is to be done or may be done; or any day occurring between 22 and 24 December, 27 and 31 December, and 2 and 10 January. This means that the Christmas closure this year will run from Friday, 22 December 2023 to Wednesday, 10 January 2024 (inclusive).
This closure is an important consideration for principals and contractors to factor in when preparing (and responding to) payment claims and other stages of the security of payment process under BIFA. Parties should also be aware of other public holidays, special holidays or bank holidays which are applicable under its construction contract. A failure to do so can have practical and commercial impacts on a project.
Impact on Payment Claim Submission
BIFA requires a payment schedule (in response to a payment claim) to be given by the period specified in the relevant contract, or within 15 business days of receipt (whichever is earlier). With the Christmas shutdown in place, if a payment claim was submitted by a Contractor on 22 December 2023, the relevant period for a response will not commence running until 11 January 2024.
Note, the provisions of a contract, which might include reference to a calendar day instead of a business day, will not impact the operation of BIFA and the shutdown period.
It is also important to keep in mind that a payment claim may not be valid if provided before the reference date (even if requested). Generally, construction contracts may specify a separate reference date for the month of December that allows a payment claim to be submitted prior to the closure. However, if the contract merely says a payment claim is to be submitted on the 25th of each month, or is silent (meaning the reference date is the last day of each month, as specified in BIFA), the reference date will occur during the BIFA closure.
Accordingly, industry participants are strongly encouraged to consider significant deadlines which fall in or around this period, including due dates for payment, the delivery of payment claims and payment schedules, and the submission of notices for claims and responses to same to ensure that a Christmas delivery does not ruin your festive spirits.
Adjudication
The security of payment and adjudication process in Queensland is governed by BIFA and strict legislative timeframes apply. These timeframes also take into consideration the Christmas closure period. Hence, whilst an adjudication application could be lodged during this period, the respondent’s timeframe to respond will not commence until 11 January 2024.
Other Jurisdictions
For those outside of Queensland, it is also important to be aware that the Christmas shutdown closures differs from state to state. For example, under the New South Wales legislation, the closure will run from 25 December 2023 to 1 January 2024 (inclusive).
In contrast, Victorian legislation does not provide any such closure at all, meaning that a ‘business day’ is any day which is not a Saturday, Sunday, or public holiday.
It is important that industry participants are aware of cross-jurisdictional timeframes to ensure their compliance with local requirements where projects are being undertaken.
If you require any assistance with respect to projects over the Christmas period, please do not hesitate to contact LPC Lawyers.
Contact: Peter Lamont or Stephanie Purser
Email: [email protected] or [email protected]
Phone: (07) 3248 8500
Address: Suite 1, Level 1, 349 Coronation Drive, Milton Qld 4064
Postal Address: PO Box 1133, Milton Qld 4064