ACT: Respondent Does NOT Serve 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. The respondent has 10 business days in which to comply with the Act by providing a payment schedule.
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 renders the payment schedule invalid and, should the claimant give notice of adjudication, the payment schedule will need to be served again.
The payment schedule is not served until it is delivered in person to the claimant or lodged during normal business hours at the claimant's ordinary place of business or posted or faxed to the claimant's ordinary place of business (or as otherwise provided by the contract), so that it reaches the claimant no later than 10 business days after receipt of the payment claim. The contract or common practice may provide for other methods of service, such as email.
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.
Failure to provide a payment schedule within the time required creates a statutory debt which the claimant is entitled to recover upon demonstrating the work was performed under a valid contract between the parties.
If the payment schedule is served one day late it is invalid and must be treated as if it was not served. Therefore it is essential to count business days carefully. The first business day is the first day after service of the payment claim (excluding Saturday, Sunday, public holidays and all days between Christmas and New Year) i.e. the day of service is day 0.
If the respondent does not pay the full amount than the claimant can:
- Apply in writing to Adjudicate Today for adjudication of the claimed amount. However before making the adjudication application the claimant must, within 20 business days after the due date for payment, give the respondent notice that the respondent has just 5 business days to provide a payment schedule;
Sue in court or commence any dispute resolution process permitted by the construction contract; and / or
- Give notice of intention to suspend work;
Please move to the next step on the flowchart by selecting either "Full or any part of claimed amount NOT paid by Due Date" or "Full Payment made by Due Date. Payment Process under the Act complete" depending on the circumstances.