Guides to security of payment in Queensland
What the Building Industry Fairness (Security of Payment) Act 2017 gives you, and how to use it without tripping over it. Written for the person who has to get the claim out this month.
The basics
Three things decide whether a claim is a payment claim at all: the date it is made from, what the document itself says, and how the clock is counted.
What a reference date is
s 67 BIF Act
A reference date is the date under your contract from which a progress claim can be made. Where the contract sets a mechanism, that mechanism governs. Where it does not, the Act supplies the last day of the month in which work was first carried out, and the last day of each month after that. Only one payment claim may be given for each reference date, so a repeated date is one of the cheapest ways to lose a claim.
What a payment claim has to do
s 68 BIF Act
Section 68 asks three things of the document: it must identify the construction work or related goods and services it relates to, state the amount claimed, and request payment of that amount. A document in the form of an invoice is taken to request payment. Identification is where claims fail most often, because percentages against item numbers give a respondent nothing to answer.
How business days are counted in Queensland
Counting time
A business day under the BIF Act excludes weekends and public holidays, and it also excludes the whole of 22 December to 10 January. That shutdown is specific to Queensland, and counting without it makes every January deadline about a week too early. Local show holidays vary by district, so check the one that applies where the work is carried out.
Getting the claim out, and getting it right
The six month window
s 75(4) BIF Act
A progress claim can be given only within the later of the period worked out under the contract and six months after the construction work it relates to was last carried out. Final claims run on longer periods, tied to the end of the defects liability period and to completion of the work. A claim served outside the window is exposed, however good the underlying entitlement is.
Supporting statements
s 75 BIF Act
A head contractor giving a payment claim to the principal must give a supporting statement with it, declaring that all subcontractors have been paid what is owed to them, or identifying who has not been paid and why. Serving without one, or giving a statement that is false or misleading, carries a penalty. It belongs with the claim as a matter of course, not as a monthly scramble.
Retention and securities
Security
Retention is money withheld from what you have earned, usually a percentage of each claim up to a cap, released on practical completion and again at the end of the defects liability period. Where the contract takes bank guarantees or bonds instead, nothing is withheld from the claim and the instruments sit against the contract with their own expiry dates. Where the trust framework in chapter 2 applies, cash retention must be held in a retention trust account, so check whether your contract is caught.
Serving the claim, and proving you did
Service
How a claim may be served comes from the contract first, then from the legislation that supplies default methods. Email is not automatically good service: the contract has to permit it, or the recipient has to have agreed to it. Where service is likely to be attacked, serve by more than one permitted method and keep the proof of each.
The response, and what follows it
The Act has teeth, but only for a claimant whose claim holds up. What happens after service is where the leverage is won or lost.
Payment schedules, and what happens without one
s 69, s 76 to s 78 BIF Act
A payment schedule must identify the claim it responds to and state the amount the respondent proposes to pay. If that scheduled amount is less than the amount claimed, it has to say why, including the reasons for withholding payment, and it has to be given within the time the contract allows or 15 business days after the claim was given, whichever ends first. Where no schedule and no payment arrives, the respondent becomes liable for the whole claimed amount, which the claimant can pursue as a debt or take to adjudication.
Subcontractors' charges
ch 4 BIF Act
Chapter 4 gives a subcontractor a different route to the money: a charge over amounts payable to your customer by the party above them, claimed by a notice of claim of charge in the approved form and supported by a certificate from a qualified person. The time limits are short and the form matters. It is an alternative to the progress payment route rather than an addition to it, and the Act restricts running both over the same money at once, so get advice before lodging one.
Adjudication, in outline
s 79 BIF Act
Adjudication is a fast statutory decision on how much is payable under a payment claim, not a final judgement on the contract. The claimant applies within the period the Act allows, an adjudicator is appointed, the respondent replies, and a decision follows on a short timetable. A respondent who gave no payment schedule cannot put on an adjudication response, and reasons for withholding payment that were not in the schedule generally cannot be raised later, which is why the schedule matters so much.
General information, not advice
These guides are general information about Queensland legislation. They are summaries, they are not tailored to your contract, and the Act and the cases decided under it move. Paystruct is software, not a law firm. Read the guides for the shape of the regime, then read your contract, and get advice from a construction lawyer before you act on anything that matters.
Involve a lawyer when
- The claim is contested, or you expect it to be.
- It is, or may be, the final claim under the contract.
- The contract has been terminated, repudiated or suspended.
- You intend to apply for adjudication, or expect the respondent to.
- The amounts involved are significant to you.
- Time limits are close, unclear, or already passed.
Paystruct checks what can be checked from the record and shows you the rest. See deadlines and compliance for how the dates are worked out.