NSW: Respondent Serves Payment Schedule

A payment schedule need only be prepared if the respondent does not propose to pay the full amount claimed by the due date for payment.

The payment schedule is not served until it is received by the claimant or lodged during normal business hours at the claimant's ordinary place of business, so that it reaches the claimant no later than 10 business days after receipt of the payment claim.

Unfortunately many respondents make the mistake of leaving their response until after the tenth business day in the belief that they have complied with the Act. They have not. Service on business day 11 means the payment schedule is invalid and, should the claimant give notice of intention to apply for adjudication, the payment schedule will need to be served again.

We recommend that a record of the time, date and manner of service on the claimant be kept. A claimant may deny receipt of the payment schedule or claim receipt after the expiry of 10 business days (or such shorter period provided by contract). In this case, the respondent must be able to evidence the date of service.

Service on the claimant should occur during normal business hours, at the claimant's ordinary place of business or as otherwise required by the contract. In the absence of a contrary contract provision, the safest way of ensuring service is to serve by courier with instruction to obtain a signed receipt. In our experience, below is the safest ranking to ensure service:

  1. Courier - signature required
  2. Mail - Express Post: keep express post tracking number for delivery verification
  3. Platinum Post - Signature required
  4. Ordinary Post - Make a statement verifying the address, date of postage and other relevant details
  5. Email (only to an email address which is specified by the person for the services of notices of that kind - generally the claimant). In email options, we advise tick both "request a delivery receipt" and "request a read receipt"
  6. In person - Ensure a receipt is obtained or
  7. A different method only where such method is provided under the relevant construction contract. Please note that service by fax is only valid if provided by the contract. If service by fax is permitted, print and keep full page fax journal report as evidence of transmittal.

Tips:

  • Respondents are strongly advised to keep a record of the time, date and manner of service on the claimant. A claimant may deny receiving a payment schedule in which case the respondent must be able to evidence the date of service.
  • When items are sent by ordinary post, allow sufficient time for them to be received. Generally, items sent by ordinary post are deemed to be received on the fourth working day after posting. We recommend against post as claimants have denied receipt..
  • Should fax be permitted by contract as a form of service, ensure you retain the full page fax receipt and refrain from sending colour photographs, and plans as they are generally rendered unreadable. Lengthy faxes have been known to lose pages in transmission.

What happens if the respondent provides a payment schedule for less than the amount claimed?

The claimant can:

  • Accept the reasons given by the respondent for not paying the full payment claim and wait for the respondent to pay any scheduled amount by the due date; or
  • Apply in writing to Adjudicate Today for adjudication of the disputed amount. The adjudication application must be made within 10 business days after receiving the payment schedule; or
  • Sue in court or commence any dispute resolution process permitted by the contract.

Tell me about the option of litigation.

What happens if the respondent provides a payment schedule but fails to pay the amount due by the due date?

The claimant can:

  • Apply in writing to Adjudicate Today for adjudication of the full claimed amount regardless of whether the claimant was prepared to accept a lesser scheduled amount. The adjudication application must be made within 20 business days after the due date of payment; or
  • Sue in court or commence any dispute resolution process permitted by the contract; and/or
  • Give 2 business days' notice of intention to suspend work.

Tell me about the claimant's rights to suspend work.

Please move to the next step on the NSW flowchart by selecting either "Claimant accepts Payment Schedule" or "Claimant disputes Payment Schedule" depending on the circumstances.

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