In brief - Changes to BCIPA are significant 

We recently highlighted some Building and Construction Industry Payments Act 2004 amendments in our recent article BCIPA extended time limits and Christmas shutdown period only apply if allowed for in contract. Here are some other amendments that also came into effect on 15 December 2014.

Time limits for serving payment claims

Previously, payment claims needed to be served within 12 months after the work or services to which the payment claim related was last carried out or supplied (unless the contract allowed a longer period). This meant contractors were often out of time to lodge payment claims for retention monies at the end of the defects liability period.

Now payment claims other than final payment claims must be served within six months after the work or services to which the payment claim relates was last carried out or supplied (unless the contract allows a longer period).

Final payment claims (i.e. claims for the final payment under a contract) must be served within the later of:

  • the period worked out under the contract (if any)
  • 28 days after the end of the defects liability period (if any), or
  • six months after the work or services to which the payment claim relates was last carried out or supplied.

BCIPA now distinguishes between standard and complex payment claims

"Standard payment claims" are payment claims for an amount of $750,000 excluding GST or less. "Complex payment claims" are payment claims for an amount more than $750,000 excluding GST.

Time limits for serving adjudication responses

Previously, adjudication responses needed to be served within five business days after the adjudication application was served, regardless of how large the payment claim was.

Now if an adjudication application relates to a standard payment claim, the adjudication response must be lodged within 10 business days after the adjudication application is served. If it relates to a complex payment claim, the adjudication response must be lodged within 15 business days after the adjudication application is served.

However, the respondent can apply for an extension of time to lodge its adjudication response (of up to 15 additional business days) provided the application is made within five business days after the adjudication application is served.

Reasons for disputing payment which can be relied upon in adjudication responses

Previously, adjudication responses could not include any reasons for withholding payment if they were not included in the payment schedule.

Now if an adjudication application relates to a standard payment claim, the adjudication response may not include any reasons for disputing payment which were not included in the payment schedule. If it relates to a complex payment claim, the adjudication response may include any reasons for disputing payment even if they were not included in the payment schedule.

If an adjudication response includes reasons for disputing payment which were not included in the payment schedule, the claimant may lodge a reply to the new reasons within 15 business days after adjudication response is served.

The claimant can also apply for an extension of time to lodge its reply (of up to 15 additional business days) provided the application is made within five business days after the adjudication response is served.

Time limits for making adjudication decisions

Previously, adjudicators had to make their decisions within 10 business days after the adjudication response is lodged (or the last day on which the respondent could have lodged its adjudication response).

Now if an adjudication application relates to a standard payment claim, the adjudicator must make its decision within 10 business days after the last day on which the respondent could have lodged its adjudication response.

If an adjudication application relates to a complex payment claim, the adjudicator must make its decision:

  • within 15 business days after the last day on which the respondent could have lodged its adjudication response, or
  • if the claimant is entitled to lodge a reply to new reasons included in the adjudication response which were not included in the payment schedule, within 15 business days after the last day on which the claimant could have lodged its reply.

The deadline for making a decision can also be extended by the consent of the claimant and the respondent.

Giving notice before taking action if no payment schedule received

Previously, claimants were only required to give respondents a further five business days’ notice before making an adjudication application, and not before making an application to court for summary judgment.

Now if a respondent fails to serve a payment schedule in response to a payment claim within the time required, before making an adjudication application or applying to court for summary judgment, the claimant must give the respondent a further five business days’ written notice of its intention to do so.

The notice must be given within 20 business days after the last day on which the respondent could have served its payment schedule. The claimant may then only take action if the respondent does not serve a payment schedule within five business days after the notice is given.