NSW: Common Claimant Pitfalls
Adjudicate Today has managed thousands of adjudication applications over the last 18 years (over 60% of all adjudication applications made nationally) and we have learned many lessons. Parties have requested we list the most common mistakes we see in adjudication. Here is our list of issues that claimants must get right.
- From the date the payment claim is served on the respondent, the Act provides strict time frames for the service of payment schedules, section 17(2) notice for optional adjudication and adjudication applications. Neither Adjudicate Today nor the adjudicator can extend time frames and if any document is received/served just one or more business day outside the prescribed time, it may affect the validity of the adjudication application.
- In the adjudication application, provide evidence that the time frames have been complied with by including written confirmation of both the specific date and method of service/receipt of documents (e.g. courier, post, email etc.).
- Where items are sent by ordinary post, allow sufficient time for the item to be received. Generally, items sent by ordinary post are taken to be received on the fourth working day after posting. We recommend against post as many respondents have denied receipt. We recommend courier (signature required) as the preferred form of service. If service by fax is permitted or required by contract, 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.
- The due date for payment must fall after the date of service of the Payment Claim. A valid section 17(2) notice must be served after the due date for payment has passed.
- Calculate time frames carefully noting that the business day on which a particular document is received is counted as business day 0 (weekends, public holidays and days between Christmas and New Year are excluded).
Demonstrate an entitlement to the claimed amount
- Include in the adjudication application a written submission and supporting documents which demonstrate:
- the particular agreement was made (whether written or oral) between the claimant and respondent;
- the payment claim has been calculated in accordance with the contract; and
- the claimant has performed the work or provided the related goods and services as claimed.
- If no payment schedule is provided by the respondent, the adjudicator must still be satisfied that there was a contract under which work was performed to the claimed value. Therefore the written submission and supporting documents should still be provided.
- Too often claimants assume an adjudicator will seek additional submissions if the application does not substantially demonstrate an entitlement to the amount claimed or is unclear. Usually there is insufficient time for this and, in any case, it is not the adjudicator's responsibility to assist the claimant strengthen its case.
- Ensure the payment claim is addressed to the legal entity that the claimant had contracted with. For example, if the claimant contracted with Fred Smith t/as ABC Building but the payment claim was issued in the name of ABC Building Pty Ltd, the claimant will be unable to enforce the adjudication determination.
Failure to provide supporting statement by Head Contractor
- From 21 April 2014, where a Payment Claim is both served on a “principal” to a “construction contract” by a “head contractor” and in relation to a construction contract (whether written or oral), an additional supporting statement is required to be appended to the Payment Claim served on the respondent.
- The supporting statement is known as the Schedule 1 Form. In the form, the head contractor must declare that subcontractors they have engaged have been paid all payments due and payable in relation to the construction work concerned. Amounts in dispute are excluded however the supporting statement must identify the subcontractor.
- The form must be in the approved format and has been issued by the NSW government. Click here to download the approved NSW government form in Word format.
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