If you are involved in a contract under which there is likely to be a dispute over a payment claim then you may be at an increased risk of receiving an adjudication application under the Construction Contracts Act 2004 (WA) over the Christmas period.
WHAT IS THE PROBLEM?
Unlike proceedings in many courts and tribunals, the time periods for adjudications do not stop running during the Christmas season.
Some contractors (and their lawyers) attempt to take advantage of this fact by serving their application for adjudication on respondents during the Christmas closure period so that they can obtain a tactical advantage by catching you out while people are on leave.
WHY IS THIS A PROBLEM?
Under the Act, a party who has been served with an application for adjudication only has 14 days within which to prepare and serve a response. This 14 day time period continues to run through the Christmas period.
Importantly, the Act requires respondents to include all documents and evidence relied upon in the response. There is no other opportunity to respond to the claims made by the applicant in the adjudication. Nor is there an opportunity to request more time within which to serve a response.
WHAT CAN YOU DO TO MINIMISE THE RISK OF BEING CAUGHT OUT OVER THE CHRISTMAS BREAK?
Be prepared and keep the following preventative measures in mind.
- Prepare a plan: Prepare a plan or a set of procedures which can be followed in the event that an adjudication application is served on you or your company. Ensure that all relevant personnel are aware of these plans or procedures. Consider the following questions. Who is likely to be served with the application? Who will be available over the Christmas period to respond to that application? Which personnel will likely have knowledge of the subject of the application? Will they be available over the Christmas period?
- Monitor all communications: Make arrangements to monitor all avenues of communication over Christmas, including email. Emails and fax communication should be automatically forwarded to a designated member of staff who can immediately deal with the application. You could also ensure that you have a member of staff regularly check any offices where mail is directed, and open any packages when they arrive.
- Contact your lawyer now: If you anticipate a possible dispute about payment in the lead up to the Christmas period, contact your lawyer now so that they can arrange to be ‘on call’ over the Christmas period and, ultimately, assist you in the event that you or your company are served with an adjudication application during that period.
- Start preparing a response in advance: If you anticipate receiving an adjudication application during the Christmas period, think about preparing a response in advance (begin by collating all relevant information and documentation and considering how to respond to the merits of that application).
- Take action promptly upon being served with an application: If you or your company receive an adjudication application, take action promptly. Do not put adjudication applications to the side or put them in the ‘too hard basket’. As soon as you have been served with an application, time is ticking, even over the silly season. It doesn’t matter if you only became aware of an adjudication application several days after it was served.
- Consider proactive measures: Contemplate whether any current claims for payment or disputes about payment could be dealt with or settled before the Christmas period to avoid the risk of an application for adjudication being served during the Christmas closure period.