It is that time of year again when claimants and respondents should be aware of the differing timeframes that apply to claims made pursuant to security of payment legislation across the country. This alert, by Senior Associate Michelle Hall, deals with payment claims pursuant to the Building and Construction Industry Payments Act 2004 (BCIPA) in Queensland and the Construction Contracts Act 2004 (CCA) in Western Australia.
Parties should not assume that a blackout period applies over the Christmas / New Year period
The amendments to BCIPA that commenced on 15 December 2014 introduced an extended Christmas ‘blackout’ period to prevent ambush claims over the festive season and parties should be aware of when the new definition of ‘business day’ applies.
The definition of ‘business day’ in BCIPA now excludes the period between 22 December and 10 January. Whilst the timeframe for giving an adjudication application or adjudication response is tied to the expanded definition of ‘business day’; if a respondent receives a payment claim careful consideration needs to be given as to when a payment schedule in response is due.
In the case of both ‘standard payment claims’ (payment claims less than $750,000 excluding GST) and ‘complex payment claims’ (payment claims more than $750,000 excluding GST) the timeframe for when a payment schedule is due may depend upon the terms of the Contract. In both cases, payment schedules must be served within the earlier of the time required by the relevant construction contract or the timeframes provided for in the BCIPA.
If the contract provides for an earlier timeframe for a payment schedule, the payment schedule must be given by that date. This may occur, for example, if the contract in question does not incorporate the expanded definition of ‘business day’ that is now in BCIPA, as the contractual definition of ‘business day’ may provide for a shorter period. In this case, a payment schedule would be due based upon the timeframe calculated by the relevant construction contract (irrespective of the expanded definition in BCIPA) and could be required to be given within the Christmas/New Year period.
In Western Australia, the timeframe for steps to be taken under the CCA does not exclude the Christmas/New Year period save for Saturdays, Sundays and the public holidays over this period (e.g. the Christmas Day, Boxing Day and New Years Day public holidays). Parties engaged in a payment dispute pursuant to the CCA should remain vigilant over the Christmas/New Year period and make arrangements to monitor all incoming communications so that any potential applicable timeframes are not missed. Even if your office is closed over the Christmas/New Year period, service of documents could take place and time frames could be running against a party to a payment dispute under the CCA.
Claimants should consider when to serve payment claims and adjudication applications
From a practical perspective, putting aside whether or not a claimant can give a payment claim pursuant to a valid reference date or if a payment claim is within the time requirements for payment claims as set out in BCIPA, claimants should consider the timing of payment claims over the Christmas period.
If the relevant construction contract does not provide for an earlier timeframe for a payment schedule, the expanded definition of ‘business day’ will apply to when a payment schedule is to be given. This is also the case for adjudication responses. Given the extended definition of ‘business day’ a claimant could unintentionally provide a respondent with extended timeframes to take steps under BCIPA.
From a claimant’s perspective, unless there is a reason for a payment claim to be given such as the potential loss of a reference date or if a claim has to be given because of the timeframes provided for in BCIPA, claimant’s should consider when they serve payment claims in the period leading up to Christmas.
The same could apply to a respondent in serving an adjudication response if new reasons have been given providing the claimant the right to give a ‘claimant’s reply’. The timing of the service of the adjudication response within the time frames provided for by BCIPA may have the potential to provide extra time for claimant’s to provide a claimant’s reply.
Don’t forget the Contract
In both Queensland and Western Australia, irrespective of when timeframes fall due under BCIPA or the CCA, parties should not forget the contractual process for claims which can operate in parallel with payment claims under BCIPA or the CCA. In particular, the Principal (or the Superintendent in the case of a Superintendent administered contract) under a construction contract should ensure that the contractual process for issuing payment certificates is followed. The timeframes for the contractual claim process will depend upon the drafting of the construction contract concerned and may require steps to be taken within the Christmas/New Year period.
Key take away points
The service of documents pursuant to security of payment legislation in Queensland and Western Australia over the upcoming Christmas period may not be straightforward and consideration should be given to the individual factual circumstances. Parties should seek legal advice where necessary and, above all, should ensure that they are aware of the relevant timeframes and key dates are not missed.