What is the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (‘BIF Act’)?
This article provides a brief summary of some of the legislative requirements set out under the BIF Act and does not provide an exhaustive explanation of those provisions. Reference to the BIF Act’s relevant provisions should be made as they apply to your circumstances.
How does the BIF Act assist me in getting paid?
The BIF act legislates the use of trusts for specific building and construction contracts. It also grants relevant parties rights to progress payments irrespective of specific provision made within the relevant contract outlining provision for progress payments. Furthermore, it establishes a procedure for making, responding and adjudicating a payment claim. It also outlines the procedure for the recovery of amounts claimed.
What is a payment claim?
A payment claim is a written document that: –
- identifies the construction work or related goods and services to which the progress payment relates; and
- states the amount (the “claimed amount”) of the progress payment that the claimant claims is payable by the respondent; and
- requests payment of the claimed amount; and
- includes the other information prescribed by regulation.
Importantly, a written document bearing the word ‘invoice’ is taken to satisfy a request for payment of the claimed amount.
What is a payment schedule?
A payment schedule is a written document responding to the issued payment claim that: –
- identifies the payment claim to which it responds; and
- states the amount of the payment, if any, that the respondent proposes to make; and
- if the amount proposed to be paid is less than the amount stated in the payment claim—states why the amount proposed to be paid is less, including the respondent’s reasons for withholding any payment; and
- includes the other information prescribed by regulation.
Right to progress payments
A person has the right to a progress payment if the person has carried out construction work, or supplied related goods and services, under the contract from each reference date under a construction contract.
A reference date is: –
- 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; or
- if the contract does not provide for the matter—
- 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.
- However, if a construction contract is terminated and the contract does not provide for, or purports to prevent, a reference date surviving beyond termination, the final reference date for the contract is the date the contract is terminated.
Limitation periods – the time for making a payment claim (excluding final payment/s)
If the payment claim does not relate to a final payment, the limitation periods imposed by the BIF Act is: –
- a period specified pursuant to the agreement (if any); or
- in the absence of contractual provision, within 6 months of the construction work taking place or were last performed.
Limitation periods – the time for making a payment claim (for final payment/s)
If the payment claim relates to the final payment, the limitation periods imposed by the BIF Act to give a payment claim is before the end of whichever of the following periods is the longest:-
- the period specified pursuant to the agreement (if any); or
- 28 days after the conclusion of the last defects liability period for the agreement;
- 6 months after the completion of all construction work to be carried out under the agreement;
- 6 months after the complete supply of goods and services pursuant to the agreement.
Limitation periods – Responding to a payment claim (i.e. payment schedule)
If you receive a payment claim, you must give a payment schedule within whichever periods end first: –
- the period specified under the relevant construction contact (if any); or
- 15 business days after the payment claim is given to the respondent.
Importantly, you do you need to give a payment schedule if the amount claimed in the payment claim is paid in full on or before the due date for payment of the amount claimed which the payment schedule relates.
If you are disputing payment of the whole of the payment claim or part of the payment claim or fail to pay the amount claimed by the claimant in its payment claim by the due date for payment, you must give a payment schedule within the relevant periods.
What happens if I ignore a payment claim?
If you fail to respond to a payment claim by giving a payment schedule within the relevant periods, you are liable to pay the amount claimed under the payment claim to the claimant on the due date for payment to which the payment claim relates.
If you do not give a payment schedule or pay the payment claim by the due date for payment, the claimant may opt to recover the monies claimed through a Court with relevant jurisdiction or adjudication.
If the claimant commences proceedings in a court to recover an unpaid amount from a respondent as a debt owing, you would not, in those proceedings be entitled to bring any counterclaim against the claimant or to raise any defence in relation to matters arising under the construction contract.
If you or someone you know have received a payment claim in relation to building and construction works or need to give a payment claim and require legal advice about this, contact us at Klein Legal today. Klein Legal are your Sunshine Coast building and construction law specialists, who are primarily involved in building disputes.
This is general information only and does not constitute legal advice,
If you or someone you know would like more information or needs help or advice about this topic, please contact us on (07) 5458 6855 or email firstname.lastname@example.org