NSW: Claimant Prepares s17(2) Notice
- The respondent has not provided the payment schedule within 10 business days of being served with a payment claim; and
- Failed to pay the claimed amount by the due date for payment; and
- The claimant wishes to adjudicate the payment claim;
the respondent must be given a second opportunity to serve a payment schedule. The notification of the second opportunity is made under section 17(2) of the Act.
To provide the notice:
- The claimant must notify the respondent within 20 business days of the due date for payment that it will be proceeding to adjudication if the full amount claimed is not paid. This is called the 2nd opportunity or section 17(2) notice.
- The intent of the notice is to give the respondent a written notice that it has a further 5 business days to provide a payment schedule and that if the payment schedule is not provided, the respondent is prevented by the Act from lodging an adjudication response in any subsequent adjudication proceedings.
The notice served by the claimant on the respondent may take the following form:
In response to this company’s Payment Claim made on this date ____________________ for $____________________ your company failed to provide a Payment Schedule within the time allowed by the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the Act’).
As a consequence, your company became liable to pay the whole amount of the Payment Claim on the due date for payment. Your company has failed to pay the whole of the claimed amount by the due date for payment.
Our company has elected to apply for adjudication of the Payment Claim. Your company has five (5) business days in which to serve a Payment Schedule or pay the Payment Claim in full.
If, within that time, your company fails to pay the whole amount of the Payment Claim, this company will proceed to adjudication. If your company again fails to serve a Payment Schedule, your company will be barred from lodging an adjudication response [see section 20(2A) of the Act].
Service of s17(2) Notice
It is essential that the claimant keeps a record of the time, date and manner of service on the respondent, as adjudication times run from the date of receipt by the respondent of the section 17(2) notice. Failure to be able to prove the date of receipt may compromise the claimant's adjudication application.
Claimants should type the notice on their letterhead, complete the date and $ fields and sign the notification.
At the same time, the respondent should be served in accordance with any contract provision or served in accordance with the Act.
Service of the notice on the respondent should occur during normal business hours, at the respondent'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:
- Courier - signature required;
- Mail - Express Post: keep express post tracking number for delivery verification;
- Platinum Post - Signature required;
- Ordinary Post - Make a statement verifying the address, date of postage and other relevant details;
- Email (only to an email address which is specified by the person for the services of notices of that kind - generally the respondent). In email options, we advise tick both "request a delivery receipt" and "request a read receipt";
- In person - Ensure a receipt is obtained; or
- 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.
- Claimants are strongly advised to keep a record of the time, date and manner of service on the claimant. A respondent may deny receiving the notice in which case the claimant 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 respondents 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.
Please move to the next step on the flowchart being "Respondent has 5 business days from receipt of Adjudication Notice [s.17(2) notice] to prepare & serve Payment Schedule".