VIC: Claimant Disputes Payment Schedule
If the claimant disputes a valid payment schedule, the claimant can apply to Adjudicate Today for adjudication of the claimed amount. Application must be made within 10 business days of date of receiving the payment schedule.
Why go to adjudication?
Adjudication is a quick and informal process introduced by government to "keep the money flowing in the building and construction industry". It represents an alternative to the often slow, expensive and difficult process of litigating payment disputes through the courts.
Adjudication was introduced in response to requests from industry groups for government intervention because their members were either being paid too slowly or not at all.
Adjudication does not limit the rights of parties to litigate outstanding issues. It provides claimants the opportunity to have a quick decision on the merits of their claim for payment. Subject to very limited injunctive rights, a respondent must comply with the adjudicator's determination (ie pay the money) if they wish to commence proceedings in court. In effect, the traditional roles in court are reversed. Rather than the claimant litigating in court seeking to be paid, the claimant has possession of the money. The respondent must commence court proceedings to attempt to recover some or all the money paid. In practice, few respondents challenge the adjudicator's determination.
What happens now?
Once the claimant decides on adjudication, it is important that the correct procedures under the Act are followed. The first step is to check that the payment schedule complies with the Act. This means the payment schedule must:
- Be in writing and addressed to the claimant;
- Be served on the claimant within 10 business days of receipt of the payment claim by delivery in person or lodged during normal business hours at the claimant's ordinary place of business or posted or faxed to the claimants ordinary place of business (or as otherwise provided by the contract or common usage, such as email);
- Identify the payment claim to which it relates;
- State the scheduled amount of payment that it is proposed to make (it may be "nil");
- If that amount is less than the amount claimed state the reasons why. In the event the respondent does not include all reasons for non-payment in the payment schedule and adds additional reasons for non-payment in any adjudication response, the adjudicator must serve a notice on the claimant setting out those reasons and stating that the claimant has 2 business days to lodge a response to those reasons with the adjudicator. Certain reasons for refusing to pay are void under the Act, including "pay if paid" and "pay when paid".
Assuming the payment schedule is valid, please move to the next step on the Victorian flowchart which is "Claimant has 10 business days to prepare and serve Adjudication Application from either receipt of Payment Schedule or after s.18(2) Notice has expired, if applicable".