The Building and Construction Industry Payments Act is being amended to make timeframes for payment disputes more balanced and to regulate the expertise of adjudicators. This article deals with some key last minute changes which have been made to the amendments.
On 26 September 2014, the much-anticipated Building and Construction Industry Payments Amendment Bill 2014 (Amending Bill) received final assent. The Amending Bill brings in a raft of changes to the Building and Construction Industry Payments Act (Act) and the Queensland construction industry is poised for one of the biggest seismic shifts since the Act was first introduced. We previously noted that the changes to the Queensland regime were in stark contrast to the direction chosen by New South Wales in its amendments made following the Collins Inquiry into Construction Industry Insolvency in NSW (update available here).
The Amending Bill has undergone a pre-proclamation review by the Transport, Housing and Local Government Committee and a number of changes have been made. Some of these changes have the appearance of softening the impact of the Amending Bill to contractors; some of the changes might be said to hit even harder.
Failure to serve a payment schedule no longer fatal to defence
The Act provides that a failure to serve a payment schedule within the time required means the claimed amount becomes a debt due and payable. The latest version of the Amending Bill now provides that a respondent who fails to serve a payment schedule and then fails to pay the relevant amount, must be given a further five days to serve a payment schedule, before the claimant can take any further recovery action. (The further opportunity to put on a payment schedule does not apply where the respondent serves a payment schedule stating a payment will be made, but then fails to pay the amount stated.)
Two-speed system receives further clarification
The Amending Bill provides that claims will now be categorised and conducted as either "standard" or "complex" claims. The initial drafting of the Amending Bill specified that complex payment claims would include a payment claim for a "latent condition" or a "time related cost". The references to "latent condition" and "time-related cost" have now been deleted from the Amending Bill and "complex payment claims" are now simply defined as any payment claim for an amount greater than AUD 750,000.
The Amending Bill has been altered to set deadlines for adjudicators to decide adjudications. Decisions must be reached within ten business days for a standard payment claim and within 15 business days for a complex payment claim. Time runs from the date the last document should be served in any adjudication. Where a respondent fails to serve a response or, in the case of a complex payment claim, where a claimant fails to serve a reply, time for making a decision runs from the date those steps should have been taken.
Administrative loose ends tidied
The Amending Bill now expressly provides for the Queensland Building and Construction Board to make policy governing the administration of the Act.
The Amending Bill now also provides that in any court proceedings if a court identifies that part of an adjudicator's decision is affected by jurisdictional error, the Court may allow that part not affected by the error. The original version of the Amending Bill made it mandatory for a Court to exercise this power if faced with an adjudication decision which was partly made without jurisdiction.
The Amending Bill now also includes a temporary power enabling the Adjudication Registrar to impose mandatory training for adjudicators regarding the transition to the new regime.
The changes to the Amending Bill suggest, in part, that there has been some resistance from those who would prefer tighter timeframes for payment of claims. In New South Wales, the pendulum has swung in favour of contractors and subcontractors. Despite the last minute changes in Queensland, it is clear that the Amending Bill marks a considerable shift in favour of parties who would like to have more time to respond to payment claims and longer deadlines for making payments.
This week the Society of Construction Law Australia firmly planted its flag in favour of a national uniform security of payment regime (update available here). Time will tell whether the New South Wales model or the Queensland model might form the basis for a national framework. For now, those in the construction industry need to remember that they do things differently across the border.