Amendments to the Building and Construction Industry Payments Act 2004 (Qld) (the Act) came into force on 26 September 2014.

What you need to know

The key amendments are:

  • Authorised nominating authorities (ANAs) have ceased to exist under the Act and all adjudication applications will be made to a new Adjudication Registry which will be part of the Queensland Building and Construction Commission(QBCC)
  • The appointment, registration and training of adjudicators will now be carried out under the authority of the QBCC
  • Payment claims will now be classified as either ‘standard payment claims’ or ‘complex payment claims’ with a separate process applying to complex claims
  • The time for preparing adjudication responses has increased from 5 business days to 10 business days
  • The Christmas shutdown period is significantly extended to assist in preventing ambush claims
  • Courts may now sever the part of an adjudicator’s decision which contains jurisdictional error rather than having to strike down the whole decision.

The changes to the Act will apply to contracts which are entered into on or after 26 September 2014. For contracts entered into before that date, the existing regime will continue to apply, apart from the need for related adjudication applications to be submitted to the new Adjudication Registry (and not to an ANA).

Further information on the above key amendments is set out below.

Appointment of Adjudicators 

Previously a claimant wanting to make an adjudication application selected an ANA and the ANA referred the matter to an adjudicator. Under the changes to the Act, ANAs have been abolished and all adjudication applications must be lodged with the new Adjudication Registry.

The Adjudication Registry will maintain a list of 'active adjudicators'. There will also be more stringent skill and qualification requirements for adjudicators, including the need for continuing professional development. Under the new regime all current adjudicators will be required to undergo additional training before deciding matters under the amended Act. 

Classification of claims - Dual model

The changes to the Act introduce separate processes for ‘standard payment claims’ and ‘complex payment claims’. A 'complex payment claim’ is a claim for an amount more than $750,000.00 (exclusive of GST) or, if a greater amount is prescribed by regulation, the amount prescribed. A payment claim which is not a ‘complex payment claim’ is a ‘standard payment claim’.

Separate time frames will apply to complex payment claims. For example, in responding to a complex payment claim the respondent will have:

  • 15 business days to provide a payment schedule (or 30 business days if the claim is served more than 91 days after the reference date in the contract)
  • 15 business days to provide an adjudication response (which can be increased by the adjudicator by up to a further 15 business days).

For standard payment claims, the existing timeframes for providing payment schedules will continue, although respondents will have a longer period i.e. 10 business days after receipt of an adjudication application, to provide an adjudication response. This is an increase from the current 5 business days.

Adjudication of complex payment claims

Under the previous regime, a respondent could not include any new reasons for withholding payment in its adjudication response i.e. reasons which were not included in the respondent’s payment schedule.

The amended Act provides that a respondent to a complex payment claim can include new reasons for withholding payment in its adjudication response. If a respondent includes new reasons in its adjudication response, the claimant is permitted to apply to the adjudicator for an extension of time of up to 15 additional business days to allow it to reply to the respondent’s new reasons for withholding payment.

Shutdown period

The definition of ‘business days’ has been extended to include the period between 22 December and 10 January of each year. This amendment is part of an attempt to avoid ‘ambush’ claims i.e. large claims made close to Christmas, which have become common in the industry.

Jurisdictional error

Previously, where a court found that an adjudicator’s decision contained jurisdictional error, the whole of the decision would be void and unenforceable.[1]

Under the new regime, the court may ‘sever’ the part of a decision which is affected by jurisdictional error and allow the unaffected part of the decision to remain binding on the parties. This may be of benefit to claimants by dissuading respondents from launching court challenges where ‘discrete’ jurisdictional errors may have been made by adjudicators.

Committee recommendations not adopted

A number of the Parliamentary Committee’s recommendations for changes to the Act were not adopted by Parliament. These included:

amending the Act to permit payment claims to include claims for the release of securities and retention monies

the creation of offences and associated penalties for contractors who ‘abuse’ retentions and securities lodged by subcontractors

It remains to be seen if these recommendations and other suggested changes to the Act will be adopted in the future as the Government is intending to engage in further consultation with industry stakeholders. 

What next?

Both claimants and respondents should familiarise themselves with the changes to the Act so they are ready for making, or responding to, claims under the new regime.