ACT: Respondent - Common Pitfalls
Adjudicate Today has managed thousands of adjudication applications over the last 12 years (over 60% of all applications made nationally) and we have learnt many lessons. Parties have requested we list the most common mistakes we see in adjudication. Here is our list of issues that respondents must get right.
- If the respondent does not provide a payment schedule to the claimant within 10 business days of receipt of the payment claim (or earlier period if specified in the contract) and the subsequent 5 business days after receipt of any section 19(2) notice then the respondent has no right to lodge an adjudication response to the adjudication application. Neither Adjudicate Today nor the adjudicator can correct this situation.
- If a payment schedule is received just one business day outside of the prescribed time, the adjudicator will not be able to consider it.
- Where items are sent by ordinary post, allow sufficient time for the item to be received. Generally, items sent by ordinary post are deemed to be received when the letter would be delivered in the ordinary course of post (see Section 250 of the Legislation Act 2001). We recommend against post as many claimants have denied receipt. We recommend courier (signature required) or fax as the preferred form of service. When using fax, please 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.
- Calculate time frames carefully, noting that the date of receipt of a particular document is counted as day 0 (weekends, public holidays and days between Christmas and New Year are excluded).
Provide all reasons in a Payment Schedule
- List all reasons for non-payment in the payment schedule provided to the claimant. Should the dispute go to adjudication, the respondent cannot include in the adjudication response any reasons for withholding payment, unless those reasons have already been included in the payment schedule.
- Provide sufficient information for valuation of construction work or related goods and services by an adjudicator. If the respondent believes that an amount should be withheld from a progress payment because of a defect, then the respondent should provide calculations or other evidence which adequately demonstrates the cost of rectification of the defective work or goods. Simply stating that “work is defective” or similar is insufficient. The case must be supported with calculations and/or evidence such as to allow the adjudicator to both understand the argument and how the respondent calculated the amounts proposed (it may be $nil) in the payment schedule.
Always serve a Payment Schedule
- Unless the respondent proposes to pay the payment claim in full, a payment schedule should always be served, even if the respondent believes that the payment claim is invalid. Otherwise the respondent will forgo its right to lodge an adjudication response and may be forced to argue a case in the Supreme Court with the large cost and time that involves.
Participating in the adjudication process
- Participation in adjudication is mandatory. If a respondent chooses to ignore the adjudication process, the adjudicator will still proceed and make a determination under the Act.
Please return to "Respondent: Preparing the Payment Schedule".