Building a Case - Dealing with Building and Construction Payment Disputes when they arise
The rise of construction and development projects occurring across the Gold Coast is causing an increase in the need for legal intervention to resolve disputes between parties arising out of the payment for construction work.
To combat the increase in construction payment disputes, the Queensland Parliament has enacted legislation that allows for construction payment disputes to be determined by a qualified adjudicator without the need for court intervention. As a result, construction payments disputes, unlike other contract disputes, are a separately regulated industry that provides unique and strict timeframes, processes and procedures for resolving disputes between parties.
In Queensland, construction payment disputes between Principals (persons, body corporates or entities who contract for construction work on their land) and Contractors (persons or entities who perform construction work) are subject to the laws and processes enacted by the Building and Construction Industry Payments Act 2004 (Qld) (hereafter ‘BCIPA’). In our experience, clients are often unaware of the legal processes and obligations in place to resolve construction payment disputes when they arise. Consequently, clients often ‘shoot themselves in the foot’ by attempting to resolve a construction payment dispute themselves and by not seeking legal advice and taking proper action from the outset.
The following are a list of issues that can arise when clients do not receive proper legal advice prior to making or responding to a construction payment claim:
- A payment claim submitted by a contractor can be void if it does not comply with the minimum information requires detailed in the BCIPA;
- A Principal who receives a payment claim from a Contractor may not be aware that such payment claim enlivens the BCIPA and is the first step in a payment dispute. A Contractor will often not inform a Principal of the BCIPA requirements and will strictly enforce compliance with all time limits and procedures;
- A Principal who disputes a payment claim received, must serve a Payment Schedule on the Contractor within the strict timeframes imposed under the BCIPA;
- A Principal is excluded from introducing reasons for the non-payment of a payment claim unless such reasons have been properly detailed and listed in a Payment Schedule;
- Contractors who are seeking to enforce payment of a payment claim must draft an appropriate Adjudication Application within the time limit imposed. Otherwise, an adjudicator may not accept to hear the matter until the proper processes have been complied with;
- A Principal who ignores a Payment Claim and/or an Application for Adjudication loses the opportunity to have their grievances heard by the adjudicator. This can result in the Contractor being awarded a judgment order for full payment of their Payment Claim.
At Steindls we have acted on behalf of Principals and Contractors across the Gold Coast in many construction payment disputes which have been brought before an adjudicator for determination. As a result, we have developed a practical understanding of the time limits and requirements that must be complied with in order for a party’s grievances to be properly heard at an adjudication.
If you are involved in a construction payment dispute, then you should contact us at the earliest opportunity to ensure that you can be properly advised on the legal requirements for compliance with the BCIPA.
Tel: 07 5570 9523