NSW: Claimant Disputes Payment Schedule
If the claimant disputes a payment schedule, the claimant can apply to Adjudicate Today for adjudication. Application must be made within 10 business days of receiving the payment schedule.
Why go to adjudication?
Adjudication is a quick and informal process introduced by government to "keep the money flowing in the building and construction industry". It represents an alternative to the often slow, expensive and difficult process of going to court.
Adjudication was introduced in response to requests from industry groups for government intervention because members were either being paid too slowly or not at all.
Adjudication does not limit the rights of parties to litigate outstanding issues. It provides claimants with a quick decision on their claim for payment. Subject to very limited injunctive rights, a respondent must comply with the adjudicator's determination (i.e. pay the money) if they wish to commence proceedings in court. In effect, the traditional roles of court are reversed. Rather than the claimant litigating in court seeking to be paid, the claimant has possession of the money and the respondent must commence court proceedings to attempt to recover some or all amounts determined by the adjudicator. In practice, few respondents challenge the adjudicator's determination.
What happens now?
Once the claimant decides on adjudication, it is important that the correct procedures under the Act are followed. The first step is to check that the payment schedule complies with the Act. This means the payment schedule must:
- Be in writing and addressed to the claimant;
- Be served on the claimant within 10 business days of receipt of the payment claim;
- Identify the payment claim to which it relates;
- State the scheduled amount of payment that it is proposed to make (it may be "nil");
The Act prohibits the adjudicator from considering reasons not included in the payment schedule. This means that if the amount in the payment schedule is less than the amount claimed, the payment schedule must state the reasons why. Certain reasons for refusing are void under the Act, including 'pay if paid' and 'pay when paid'.
Assuming the payment schedule is valid, please move to the next step on the NSW flowchart which is "Claimant has 10 business days to prepare and serve Adjudication Application on Adjudicate Today & Respondent from either receipt of Payment Schedule or after Adjudication [s.17(2)] Notice has expired, whichever applicable".