With Christmas around the corner, beware of payment claims designed to catch you off-guard and the potentially severe consequences of failing to respond.
A Christmas reminder
The consequences of failing to respond to a payment claim can be serious in the lead up to Christmas where personnel are generally absent from offices.
To avoid any adverse outcomes, ensure you have a plan in place to identify payment claims upon their arrival and respond appropriately within time.
We provide some practical steps below that you can take to plan ahead for the Christmas and New Year period and identify the time frames that apply to responding to payment claims under:
- the Building and Construction Industry Security of Payment Act 1999 (NSW), and
- the Building and Construction Industry Payments Act 2004 (Qld).
Claimants often serve payment claims in the lead up to Christmas to take advantage of reduced staff levels and office closures. To avoid any adverse outcomes, we recommend establishing the following protocols to minimise risks:
- review the status of your projects and highlight any potential issues which may give rise to claims
- identify progress claim reference dates to predict when a claim might be made
- ensure that contract administrators and administrative personnel are aware of the critical importance of elevating anything that looks like a claim for payment to a nominated individual
- confirm the location of your ASIC registered office (which may be your accountant’s office) as claims for payment may validly be served there
- ensure that project representatives while on leave divert their emails to a nominated person responsible for checking them regularly, and
- ensure your fax machines are stocked with paper and cleared regularly.
We hope you do not go through the experience of having a ‘Christmas Eve payment claim’ served upon you. But if you do, our experienced Projects Team at McCullough Robertson is on hand to assist you.
On the next page, we identify the time frames you have to respond to payment claims over the Christmas and New Year Period.
Separate time frames apply in Queensland and New South Wales and so you should ensure you are familiar with the regimes relevant to your project.
We have prepared the attached tables which will assist you to identify when your payment schedule is due to be served in respect of any payment claim you receive in the lead up to Christmas.
In summary, for a payment claim served on Christmas Eve:
- in New South Wales, the payment schedule will be required to be served by 15 January 2016, and
- in Queensland, the earliest payment schedule (depending on the circumstances of the case) will be required to be served by 15 January 2016 but, as set out in the attached tables, longer periods apply to claims whose value exceeds $750,000 excluding GST.
For more details on the amendments to the time frames in Queensland, click here.