Vic Respondent Responsibility to Prepare and Serve Schedule

A payment schedule and/or performance security schedule need only be prepared if the respondent does not intend to pay the full amount of a payment claim under the Act by the due date for payment.

HOWEVER IGNORING A CLAIM WITHOUT AN INTENTION TO PAY IN FULL BY THE DUE DATE MAY HAVE SERIOUS FINANCIAL CONSEQUENCES

As the respondent did not issue the payment schedule within 10 business days of receiving the claim nor pay the full claimed amount, the claimant has now served a second opportunity notice under s18(2) and/or s18A(2) to advise of the intention to proceed to adjudication.

The respondent has only 5 business days in which to prepare and provide the payment schedule and/or performance security schedule. A contract provision seeking to extend the period beyond 5 business days is void.

Failure to provide the schedule within 5 business days has the serious consequence of denying the respondent the opportunity to make any submissions (the adjudication response) to the adjudicator. Confronted with no submissions from the respondent, an adjudicator will often, but not always, determine that the claimant is entitled to the full amount claimed.

What is a Payment Schedule and/or a Performance Security Schedule?

A schedule is the notice in writing which must be served on the claimant if the respondent does not intend to pay the full amount of a payment claim by the due date for payment or release the full amount of the performance security by the due date of release. This is regardless of whether the respondent believes that the claimant is or is not entitled to the claim, or if the respondent denies being party to the contract. Assuming a claim is not valid, and therefore can be ignored, is risky.

The payment schedule and/or performance security schedule is not served until it is received by the claimant or lodged during normal business hours at the claimant's ordinary place of business, so that it reaches the claimant no later than 10 business days after receipt of the claim, or a shorter period if provided by the contract.

A payment schedule must:

• be in writing and addressed to the claimant;
• identify the payment claim to which it relates;
• identify the scheduled amount of payment that it is proposed be paid (it may be "nil");
• if the amount that the respondent proposes to pay is less than the amount claimed in the payment claim, the respondent should set out:
  • the amount (if any) that the respondent agrees to pay - the "scheduled amount";
  • the amount that the respondent does not agree to pay under the payment claim;
  • detailed reasons in the attachment(s) as to why the respondent intends withholding any amount, including how the valuation of the withheld amount is calculated.

Where available, payment schedules should include attachments such as:

• statements detailing the extent of the work completed;
• completion certificates;
• delivery dockets;
• photographs;
• other contract documentation as may be required by contract.

Download example of a Payment Schedule

How is a Payment Schedule served?

Review information on the methods of serving documents in accordance with the Act.

What is the due date for payment?

The due date for payment is the date on which a payment claim becomes due and payable 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 the contract is silent, then on the day that is 10 business days after the earliest day on which a payment claim may be served pursuant to s14A.

Calculating the due date for payment correctly is important because certain rights and privileges are calculated from that date. Even experienced practitioners make errors calculating the due date for payment.

Calculating the due date for payment

Click here for more information and assistance in calculating the due date for payment.

Avoid pitfalls

Click here for a list of common reasons why respondents fail to succeed in adjudication.

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