Section 7: What happens if my payment claim is disputed or not paid?
Once you have submitted a payment claim, one of three things can occur. Either the head contractor (or principal) pays the claim; notifies you they reject or dispute the claim (e.g. by issuing a payment certificate for only part or all of the amount claimed); or fails to pay the claim within the time specified in your contract (or within 28 days if you don’t have a written contract).
If the head contractor (or principal) notifies you that they reject or dispute the claim or fails to pay the claim, then for the purpose of the Act you are in a “payment dispute.”
Once a payment dispute has arisen you must, within 90 business days, lodge an application for adjudication. If you do not lodge an application within this time then you may need to use other methods to resolve your payment dispute (for example mediation, arbitration or court action).
Even if you intend to negotiate with the head contractor (or principal) over your payment claim you should still lodge an application for adjudication within the 90 business days. This will reserve your right to adjudication in the event those negotiations are unsuccessful.
Even though the time limit for making an application for adjudication is now 90 business days, it is very important to take action early to resolve disputes and recover any outstanding payments.
Remember: A business day is any day other than a Saturday, Sunday, public holiday or any day between 25 December and 7 January
Frequently asked questions
How much does it cost to make an application for adjudication?
All appointors charge a small nomination fee for applications. The fees are published on the Building Commission’s website and may differ depending on the value of the payment dispute. Most appointors also take a small bond to cover the adjudicator’s fees.
Do I need a lawyer?
No. Adjudication is based on the paperwork submitted by parties to an adjudicator. However, either party may use a lawyer to prepare the written material. If you are having trouble preparing your paperwork, seek professional advice. Adjudicators who are not involved in your dispute may assist in preparing your paperwork. A list of adjudicators is available on the Building Commission’s website.
What other costs are involved in adjudication?
All adjudicators will charge a fee (usually calculated on an hourly rate) to determine the dispute. Under the Act, both parties are liable for the adjudicators fees. Any costs incurred by a party in preparing the paperwork or submission (for example legal fees) will be borne by that party.
What paperwork do I need?
The majority of payment disputes occur over payment for variation works, or defects and set offs. Therefore, it is important to include in your application the documents that support your claim. This could be timesheets, variation forms, site diary notes, emails, invoices, plans, technical drawings, technical standards, notices, technical reports (if you have them), and of course the contract and payment claim.
Where do I send my application for adjudication?
Once you have prepared your application, it needs to be served on the respondent and the appointor. If the respondent is a company then service can be effected by delivering the application at, or by posting it to (use registered post), the company’s registered office. The same applies for the appointor. If the respondent is an individual, then personal service should occur.
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