Vic Schedule NOT Served - Claimant NOT Paid

If a respondent fails to provide a schedule within 10 business days of receiving a claim, or earlier time if provided by the construction contract, and does not pay/release the full or any part of the claimed amount by the due date, a statutory debt is created which the claimant is entitled to recover upon demonstrating the work was performed under a construction contract between the parties.

The claimant may now decide from the following possibilities:

1. Seek to recover payment by serving a Section 18(2) and/or a Section 18A(2) Notice; or
2. Make application to the court; and
3. Suspending work on giving 3 business days' notice.

Almost all claimants choose to go to adjudication as this avenue avoids the risk of lengthy and expensive litigation. Adjudication is a quick and informal process. It represents an alternative to the slow, expensive and difficult process of going to court.

The right to make an adjudication application or to suspend work only arises after the due date has passed. A common reason for an adjudication application not being properly made is that the claimant serves a Section 18(2) and/or Section 18A(2) Notice either too early or too late.

How is the due date calculated?

The due date is the date on which a payment claim and/or performance security claim becomes due for payment/release either in accordance with the terms of the contract (but only if it is less than 20 business days after the payment claim is served) or, if there is no such valid provision, 10 business days after the earliest day on which a claim may be made pursuant to the Act. Proper calculation of this date is imperative as a number of milestones under the Act are calculated from this date.

Notice of Intention to Exercise Lien

If a progress payment under a construction contract becomes due and payable, the claimant is entitled to exercise a lien in respect of the unpaid amount over any unfixed plant or materials supplied by the claimant for use in connection with the carrying out of construction work for the respondent. The claimant may serve a 'Notice of Intention to Exercise Lien'. The Building and Construction Industry Security of Payment Regulations published form at Regulation 6 must be used when serving the notice.

Right to Suspend Work

Regardless of whether the claimant chooses adjudication or litigation, there is a statutory right to suspend work.

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