To a disgruntled contractor or subcontractor, nothing says “happy holidays” like a payment claim served under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) in the days leading up to Christmas.
It is an increasingly common tactic for claimants looking to catch respondents out at this time of year when there is a chance that a payment claim issued under the BCIPA may be overlooked.
For this reason, subcontractors, contractors and clients must keep on top of the timeframe requirements in the BCIPA for the Christmas break and become educated about how the BCIPA operates over that time. Failure to put in place systems to protect against exposure to claims could result in major headaches in the new year.
If you are served with a payment claim, and fail to respond with a payment schedule within the business days required by the BCIPA, you may become liable to pay the full claimed amount as a debt (or risk a court judgment).
The fact that your office was “shut down” for some or all of the Christmas break will not provide grounds to defending or responding to a claim made under BCIPA.
Be aware of excluded dates under the BCIPA
Under BCIPA, timeframes are defined in relation to ‘business days’, for example the respondent must serve a payment schedule within 10 business days of receiving a payment claim.
BCIPA’s definition of ‘business day’ expressly excludes weekends, public holidays and the period between: 27 to 31 December. Therefore, together with the public holidays and weekends at this time of year, the period inclusive from 25 December 2013 to 1 January 2014 will be excluded days under BCIPA .
While the BCIPA does offer the possible windfall of additional days to respond to a claim over the Christmas period (i.e. between 25 December 2013 to 1 January 2014), that ‘windfall’ will provide little assistance if no one is around to review, and then act upon, a payment claim (ie begin preparing the payment schedule) during this time. Further, the extra days will be of little assistance if there is an extended Christmas shutdown (eg to 13 January 2014).
Example of how extra days may impact BCIPA payment claim
Where a payment claim is served prior to 25 December 2013, the 10 business days to respond under the BCIPA will therefore cease counting between 25 December 2013 to 1 January 2014.
By way of an example of the timeframes under BCIPA over the Christmas 2013 period:
- the Claimant serves its payment claim on Friday 20 December 2013,
- the Respondent has 10 business days to serve its payment schedule (not including the day the payment claim was served or the weekend), thus the first business day for the respondent will be 23 December 2013;
- the period between 25 December 2013 and 1 January 2014 are excluded as business days under BCIPA;
- the Respondent must serve its payment schedule on or before 13 January 2014.
Monitor all service points
The Christmas period sees businesses shut down, with skeleton staff keeping the office basics running. The few remaining staff may be unfamiliar with what to look for and the basic operations of the BCIPA.
The terms of the relevant construction contract, along with statutory provisions, provide how BCIPA payment claims can be served. A contract might provide that the site office, fax number or email are acceptable forms of service. Under the BCIPA legislation, service may also be made at an external registered office or principal place of business.
Prior to Christmas, it may be prudent to undertake an assessment on where payment claims might validly be served, and then ensure that each day a team member monitors the identified service points. Staff should be familiar with what a BCIPA payment claim (or other BCIPA document) looks like. In the case of the payment claim, employees should be made 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).”