ACT: Respondent Does NOT Serve Payment Schedule within Time

Not Served

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 due date for payment is the date on which a payment claim becomes due and payable, being the earlier of 15 business days** after a payment claim is made, or the day when the payment becomes payable under the contract.

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.

IGNORING A PAYMENT CLAIM WITHOUT AN INTENTION OF PAYING IN FULL BY THE DUE DATE FOR PAYMENT MAY HAVE SERIOUS FINANCIAL CONSEQUENCES

The payment schedule must be provided to the claimant during normal business hours at the claimant's ordinary place of business. It must be provided to the claimant within the time specified by the construction contract or 10 business days after service of the payment claim, whichever time expires first.

Unfortunately many respondents make the mistake of leaving their response until after the eleventh business day in the belief that they have complied with the Act. They have not. Provision of a payment schedule on business day 11 means the payment schedule is invalid and, should the claimant wish to apply for adjudication and issues a second opportunity s 19(2) notice, the payment schedule will need to be provided 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.

What happens if the respondent does not provide a payment schedule?

If the respondent does not pay the full amount by the due date for payment then 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 a second opportunity s 19(2) notice to provide a payment schedule. This time, the respondent has just 5 business days to comply; or
  • 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 ACT flowchart by selecting either "Full or any part of scheduled amount NOT paid by Due Date for Payment" or "Full Payment made by Due Date for Payment. Process under the Act complete" depending on the circumstances.

**We note that the ACT Government has advised that the “the changes to the Building and Construction Industry (Security of Payment) Act 2009, which commenced on 11 March 2024 (and relevantly change the timeframe from 10 business days to 15 business days), apply to any progress claim made under the Act from 11 March 2024, regardless [of] when the contract was signed.” This issue will remain unsettled until it is considered by the Courts.

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