SA: Respondent Does NOT Serve Payment Schedule within Time

A payment schedule (response to a payment claim) need only be prepared if the respondent does not propose to pay the full amount claimed by the due date for payment.

The due date for payment is the date on which a payment claim becomes due and payable either in accordance with the terms of the contract or, if there is no such valid provision, 15 business days after the payment claim is made.

IGNORING A PAYMENT CLAIM WITHOUT AN INTENTION OF PAYING IN FULL BY THE DUE DATE FOR PAYMENT MAY HAVE SERIOUS FINANCIAL CONSEQUENCES.

The payment schedule must be provided to the claimant during normal business hours at the claimant's ordinary place of business. It must be provided to the claimant within the time specified by the construction contract or 15 business days after service of the payment claim, whichever time expires first.

Unfortunately many respondents make the mistake of leaving their response until after the fifteenth business day in the belief that they have complied with the Act. They have not. Provision of a payment schedule on business day 16 means the payment schedule is invalid and, should the claimant wish to apply for adjudication and issues a second opportunity s 17(2) notice, the payment schedule will need to be provided again.

We recommend that a record of the time, date and manner of service on the claimant be kept. A claimant may deny receipt of the payment schedule or claim receipt after the expiry of 15 business days (or such shorter period provided by contract). In this case, the respondent must be able to evidence the date of service.

What happens if the respondent does not provide a payment schedule?

If the respondent does not pay the full amount by the due date for payment then the claimant can:

• Apply in writing to Adjudicate Today for adjudication of the claimed amount. However, before making the adjudication application the claimant must, within 20 business days after the due date for payment, give the respondent a second opportunity s 17(2) notice to provide a payment schedule. This time, the respondent has just 5 business days to comply; or
• Sue in court or commence any dispute resolution process permitted by the construction contract; and / or
• Give notice of intention to suspend work.

Please move to the next step on the SA flowchart by selecting either "Full or any part of scheduled amount NOT paid by Due Date" or "Full Payment made by Due Date. Payment Process under the Act complete" depending on the circumstances.