NSW: Respondent Does NOT Serve Payment Schedule within Time after receipt of s17(2) Notice

If a section 17(2) notice is received and the respondent does not respond to the notice within 5 business days with a payment schedule, the respondent's loses rights to provide an adjudication response to the adjudicator. Naturally this increases the possibility of an adverse adjudication outcome for the respondent.

Unfortunately many respondents make the mistake of leaving their response until after the fifth business day in the belief that they have complied with the Act. They have not. Service on business day 6 means the payment schedule is out of time (invalid) and, should the claimant apply for adjudication, the respondent is not entitled to provide an adjudication response to the adjudicator.

What happens now?

If the claimant is paid the full amount claimed by the due date for payment, the payment process under the Act is complete.

If the respondent does not pay the full amount then the claimant can:

• Apply in writing to Adjudicate Today for adjudication of the claimed amount; or
• Sue in court or commence any dispute resolution process permitted by the construction contract; and / or
• Give notice of intention to suspend work.

If payment has not been made, the claimant having fulfilled the pre-adjudication notification requirements of the Act, may now prepare the adjudication application.

To be successful in adjudication, the claimant still needs to satisfy the adjudicator of certain key components of its claim, including:

• The payment claim and s17(2) notice were served on the respondent at its normal place of business or otherwise as specified in any contract and within the time requirements of the Act;
• There was a construction contract in existence between the parties for work in the State of New South Wales;
• Work was performed under the contract which remains unpaid;
• The rate at which the work is to be remunerated and how the total amount claimed is calculated.

Please move to the next step on the NSW flowchart" being "Claimant has 10 business days after expiry of the 5 business days given by the Adjudication Notice to prepare & serve the Adjudication Application on Adjudicate Today Must also serve Respondent".