The Building and Construction Industry Payments Amendment Act 2014 (Amendment Act) which amends the Building and Construction Industry Payments Act 2004 (BCIPA) is effective from today. The Amendment Act was passed by Parliament on 11 September 2014 and received Royal Assent on 26 September 2014.
In this Alert, Partner Adam Carlton-Smith and Senior Associate Michelle Hall discuss the amendments and their impact on the construction industry.
Impact on the Christmas and New Year period
The Amendment Act was amended by legislation passed by Parliament on 26 November 2014 in relation to transitional arrangements (Transitional Arrangement Changes).
The Transitional Arrangement Changes arose because of various concerns raised by Queensland Law Society, including how the amended definition of business day would apply to existing contracts entered into before commencement of the Amendment Act.
In response to the concerns raised, the Transitional Arrangement Changes clarify that for the upcoming Christmas and New Year period there will be a moratorium for the period 22 December to 10 January. This applies to all steps in the adjudication process, including but not limited to timeframes for payment schedules, adjudication applications and adjudication responses.
Whilst the Christmas and New Year shut down period has been extended by the new definition of business day, both claimants and respondents need to be careful over the holiday period, particularly when many businesses are either closed or operating on skeleton staff.
For example, from a claimants perspective, a claimant should be aware that the timing of service of a payment claim or adjudication application may affect when a response is due depending upon when service is performed, and should plan accordingly. From a respondent’s perspective, whilst the amendment to the definition of business day would be no doubt welcomed it should still be careful to monitor the receipt of documents at all potential places of service. That may be by monitoring emails, facsimiles, an address of service nominated in a contract or another address, or in the case of a company, a registered office.
Further, the parties should familiarise themselves with the new timeframes provided for in the Amendment Act to ensure that dates are not missed. In this regard, we refer to our earlier alert.
Other changes under the Transitional Arrangement Changes
In addition to the above, the Transitional Arrangement Changes made some further amendments in relation to transitional arrangements under the Amendment Act.
In summary, these amendments include but are not limited to the following:
- As stated above, the new procedures of the Amendment Act will apply to all payment claims made after commencement of the Amendment Act, regardless of whether the contract was existing at the date of commencement of the Amendment Act.
- The new sections in the Amendment Act relating to the express right for a claimant to withdraw from an adjudication application and the new section relating to the treatment by a Court of a decision affected by jurisdictional error (being the section that provides that where a decision is affected by jurisdiction error the Court may allow the part of the decision not affected by the error to remain binding) will apply to payment claims served before commencement of the Amendment Act.
- The new six month maximum period for a payment claim set out in the Amendment Act will be extended to a period of 12 months (instead of six months) for payment claims and final payment claims arising out of contacts entered into before commencement of the Amendment Act. This will only apply for a period of six months after commencement of the Amendment Act. The intention here is that a claimant who at the commencement of the Amendment Act has an existing valid claim more than six months after the work was carried out will not be disadvantaged.
The amendments to BCIPA are significant and will affect all aspects of the construction industry. Claimants and respondents should familiarise themselves with the changes in light of the impending changes to the security of payment system in Queensland. If you are a claimant or a respondent in the upcoming Christmas period and are contemplating serving a payment claim or adjudication application or expect to receive a payment claim or adjudication application and are uncertain of the new procedures please do not hesitate to contact us.