BCIPA Amendments effective date confirmed

Thomson Geer can confirm that they have been advised by the Government that BCIPA amendments will be effective from Monday 15 December 2014.  We expect this date will be formally announced in the coming days.

Preparing for a Christmas Payment Claim in Queensland

The Building and Construction Industry Payments Act 2004 (BCIP Act) restricts the service of payment claims at certain points throughout the Christmas period. However, claimants are known to take advantage of the holiday season by serving payment claims at a time when offices are typically empty and staff are more likely to be absent.

The imminent commencement of the changes to the BCIP Act also has important consequences given the amendment to the definition of'business day' under the new regime. This alert contains important information for both claimants and respondents in relation to the days on which a payment claim can be served over the Christmas period.

Currently, if a respondent fails to respond to a payment claim within 10 business days of service, the claimant can obtain judgement for the full amount claimed as a statutory judgment debt. If a claimant attempts to ambush a respondent with a festive payment claim, we suggest that you employ the following strategies to ensure that you are not caught off guard.

Know when a payment claim can be served

With the amendments to the BCIP Act occurring prior to the Christmas period, it is important to be aware of the amendments that may affect your business in relation to the service of festive payment claims.Importantly, the definition of 'business day' has been amended so that time will not run for service of payments claims and schedules in the period from 22 December to 10 January.

Critically, the new definition of 'business day' will apply to all construction contracts, regardless of whether the contract was executed pre or post the date of the commencement of the new BCIP Act regime. This will remove the inconvenience for respondents who frequently received large claims on the day before the Christmas shutdown period or even early in January when most companies are on skeleton staff.

For example, if a payment claim is served between 22 December 2014 and 10 January 2015, under the amended BCIP Act it will have been taken to be served on Monday, 12 January 2015 and the 10 business day period in which the respondents have to respond with a payment schedule will run from that date. Interestingly, a payment schedule will not need to be served until Tuesday, 27 January 2015 (taking into account the Australia Day public holiday).

Be vigilant

The amended BCIP Act does dilute the ability for claimants to run ambush claims but it is expected that claims will still be agitated in the December/January period when key staff are absent.

Plan for the receipt of an ambush payment claim by educating your staff so that they:

  • Are aware of the methods agreed between the parties as to the accepted forms of service of a payment claim. If claims are permitted to be served by email, ensure that someone is monitoring the correct email account (if payment claims are agreed to be sent to the inbox of an employee on leave, ensure that emails are forwarded to another account). If claims are permitted to be served by facsimile, ensure that someone keeps a record of all faxes received.
  •  Are able to identify a payment claim served under the BCIP Act.Employees should be aware that a payment claim must contain the words 'This is a payment claim made under the Building and Construction Industry Payments Act 2004 (Qld)' (or words to a similar effect). Staff should then be aware of the steps they should take upon identification of a payment claim – for example – an employee should be aware of the appropriate person to notify upon the receipt of the payment claim.

External registered offices

If your business has a registered office which is external to your own, such as an accountant's office, you should seek confirmation that the office has capacity to monitor its communications for the receipt of festive payment claims. In the same way that your own staff should be vigilant, the staff at your registered office should be aware of the implications of receiving a payment claim before Christmas day.Claimants will be aware that offices are typically under resourced during the Christmas period and may strategically serve a payment claim on a registered office during this time.

Deal with the issue upfront

You may seek to invite contractors to provide claims earlier in December if the relevant 'reference date' under the contract falls on or after Christmas Day. Should the parties agree to vary the reference date for December, you will be able to deal effectively with payment claims (and payment) over the Christmas period. In addition, you may be able to direct contractors to the proper person who should receive the payment claim during the Christmas period.  Further, you could direct the method of service, i.e by way of email to a specific person, or service on a particular facsimile number.

Using such initiative should allow parties to feel comfortable that they will not be ambushed by payment claims (and subsequent adjudications) over the December/January Christmas period.

Changes to the BCIP Act

As we have discussed in our previous alert (click here), the highly anticipated Building and Construction Industry Payments Amendment Bill 2014 (the Bill) was passed on 11 September 2014. These amendments are expected to commence on 15 December 2014.