Government has recognised that prompt payment on account is vital to the stability and efficiency of the building and construction industry. Too often the party liable to pay for construction work or related goods or services (the respondent), has manufactured a dispute to deny, or try to delay, payment. In other situations, respondents have tried to string out the time for payment with promises of future work if only the claimant just waited a bit longer.
The objective of the Building and Construction Industry Security of Payment Act 2009 (Tas) (often called the Security of Payment Act) is to ensure that any party that contracts to carry out construction work, or supply related goods or services, on projects for the private and public sectors in Tasmania is entitled to promptly receive and recover all progress payments that are due, including final payments and retention monies.
The Act applies in relation to construction contracts made on and after 17 December 2009.
The Act creates a dispute resolution process (adjudication) that allows a party (the claimant) alleging they are owed monies under a construction contract to promptly obtain payment from the respondent, based on an assessment of the merits of the claim by an appropriately qualified and independent adjudicator. Adjudicate Today trains and appoints the adjudicator.
The Act also permits claimants access to compulsory rapid adjudication when the construction contract has no provision for progress payments and/or the contract is for a single supply at a fixed price.
To take advantage of the Act, a claimant must ensure that a payment claim includes the notice: “This is a payment claim made under the Building and Construction Industry Security of Payment Act 2009 (Tas)” or words to that effect. Where the notice has not been included and the claimant wishes to benefit from the rights created by the Act, a payment claim with the notice included must be submitted in accordance with the timeframes of the Act.
The adjudication process is both simple and rapid. Adjudicators must make their determination within 10 business days (unless the parties agree to extend the time). If the respondent’s reasons for not paying are spurious, the respondent is generally liable for the adjudicator's fees plus interest for delay in paying the claim. If a respondent does not comply with an adjudication decision, the claimant may obtain from Adjudicate Today an adjudication certificate for lodgment at the appropriate court which registers it as a judgment debt. For most claims referred to adjudication, a lawyer should not be necessary.
In order to commence a claim under the Act there must be a Payment Claim made against a party to a construction contract (either written or oral) in relation to construction work or the supply of related goods and services for construction work in Tasmania.
Timeframes under the Act are all important. The Act requires the claimant to take different actions based on whether a respondent serves or fails to serve a written response to the payment claim (the Act calls this the payment schedule) within defined times. Failure by the claimant to follow the strict requirements of the Act will cause an adjudication application to fail.
The advice and flowcharts we publish on this website clearly describe how parties should proceed in preparing and responding to payment claims, what steps should be taken based on the actions of the other party and all other steps required by the Act. In addition, our seven highly trained directors and staff are available to answer questions about how the Act works and what parties need to do to comply with it. We provide this advice for free and without obligation. If parties proceed to adjudication, the adjudicator pays us a service fee from his/her fees to cover our costs. Neither party is asked to pay the adjudicator's fee until after the determination is provided to Adjudicate Today.
Our website provides many tools to assist parties. If you are not familiar with them, we suggest you read “Navigating this website” below otherwise let’s get started.
Navigating this website
Most users of this website are engaged or are proposing to engage in adjudication. The process may seem difficult when read for the first time. Actually it is not.
When an important term used by the Act is first encountered in the text it is highlighted in blue. Passing the mouse over the term causes a yellow box to "pop-up".
We have attempted to explain each step of the processes under the Act simply by using a flowchart which alerts claimants and respondents (parties) under the Act to their major rights and obligations. The flowchart is interactive. This means that when the mouse is moved over a box in the flowchart brief details are provided. Clicking in the box provides much more information. The simplest way to return from a pop-up is to close it by clicking on the small located on the top right corner of the pop-up.
The flowchart shows all the possible options available to claimants and respondents. In any particular claim, only some of the steps apply. Pink background on the flowchart describes the steps where the respondent fails to serve a payment schedule in time and blue where it is served within time. Light yellow background describes the adjudication and enforcement process.
We suggest users less familiar with the Acts and/or this site use the applicable flowcharts to navigate. Advanced users may choose to use either the blue menu system at the top of each page or the link to the next applicable information step at the bottom of most pages.
We recommend that you download and print the flowchart, preferably in colour. Keep it handy and tick and date each step as you go - this will prove most helpful.