Vic Definitions

These definitions summarise and simplify various provisions and concepts under the Act. The definitions are not necessarily exhaustive and should not be relied on. Detailed definitions are contained in the Act.

Adjudication Application is an application made by a claimant to Adjudicate Today (AT) for adjudication of a payment dispute under a construction contract. Strict time frames must be followed in order to be valid.

AT staff will provide general information about the Act but, as they must be independent of the parties, cannot help develop submissions or give legal advice.

Adjudicated Amount is the amount of the progress payment that an adjudicator determines is to be paid and/or released by the respondent to the claimant.

Adjudication Certificate is a certificate provided by AT on application by a claimant when the respondent fails to pay the whole or any part of the adjudicated amount in a determination.

Adjudication Determination is the Adjudicator's decision.

Adjudication Response is the response of a respondent to the claimant's adjudication application. In order to be valid strict time frames must be followed.

Authority means the Victorian Building Authority.

Business Day is any day except a Saturday, Sunday or public holiday or a day during the ‘end of year’ break (period commencing on 22 December and ending on 10 January the following year).

Claimant is a person who serves a payment claim under s 14 or a performance security claim under s 17A(1).

Claimed Amount is the amount of the progress payment that the claimant claims is payable.

Construction Work is work defined in s 5 of the Act. The construction work must be carried out in Victoria. The Act does not apply to domestic building work except when the owner is in the business of building residences.

Determination is the Adjudicator's decision.

Due Date is the day on which

1. a progress payment becomes due and payable either (i) by virtue of a valid contract provision, or if there is no such valid provision, (ii) 10 business days after the earliest day on which a payment claim may be made under s 14A; or
2. a performance security is due to be released either (i) in accordance with the contract provision, or if there is no such valid provision, (ii) 10 business days after the earliest day on which a performance security claim may be served under s 17B(1).

Intention to Suspend Work means the right of a claimant to suspend construction work or the supply of related goods and services. The notification to suspend work must be in writing and provide 3 business days’ notice. This right arises on:

• the respondent's failure to serve a payment schedule and pay the claimed amount by the due date; or
• service of a payment schedule but failure to pay the scheduled amount by the due date; or
• failure to pay an adjudicated amount.

Payment Claim is essentially an invoice. It is a claim for a progress payment under a construction contract. It must state it is made under this Act, identify the construction work or related goods and services and indicate the amount claimed to be payable. There are strict timeframes in which a payment claim may be served.

Payment Schedule is the respondent’s reply to a payment claim. It must identify the payment claim to which it relates and indicate the amount of the payment claim, if any, that the respondent proposes to make. If the respondent proposes to pay less than the claimed amount, then reasons must be given for withholding payment.

Performance Bond or Performance Security or Retention Money means a security issued to secure the performance by another party of obligations under the contract (including a guarantee or a bond).

Performance Security Claim is the claimant’s claim for the release of the whole or part of a performance security. It must state it is made under this Act, identify the construction work or related goods and services and specify the type and amount of performance security claimed. There are strict timeframes in which a performance security claim may be served.

Performance Security Schedule is the respondent’s reply to a performance security claim. It must identify the performance security claim to which it relates and indicate the amount of the performance security claim, if any, that the respondent proposes to release. It must also indicate when the respondent proposes to release the performance security. If the respondent proposes to release less than the claimed amount, then reasons must be given for withholding release.

Progress Payment is a payment to which a person is entitled. This includes "milestone" payments, a single one-off payment or the final payment for construction work or the supply of related goods and services.

Related Goods and Services, includes materials, components, plant or material forming part of, or for use in connection with, the construction of any building, structure or work; and services including the provision of labour, some professional services and related goods and services (see s 6).

Respondent is a person who has received a payment claim or performance security claim and is or may be liable to make a payment under a construction contract or for related goods or services.

Scheduled Amount is the amount of money that the respondent proposes to make in response to a payment claim and/or the amount of performance security that the respondent proposes to release in response to a performance security claim. If the scheduled amount is less than the claimed amount, the schedule must provide reasons for withholding payment.

Section 18(2) Notice is a notification that the claimant serves on a respondent when it has not received payment and has not received a payment schedule within the time frames. It provides the respondent with a ‘second opportunity’ (a further 5 business days to serve a payment schedule or pay the payment claim in full) before the claimant applies for adjudication. Click here for a Section 18(2) Notice template.

Section 18A(2) Notice is a notification that the claimant serves on a respondent when it has not received the release of the performance security claimed and has not received a performance security schedule within the time frames. It provides the respondent with a ‘second opportunity’ (a further 5 business days to serve a performance security schedule or release the performance security claim in full) before the claimant applies for adjudication. Click here for a Section 18A(2) Notice template.

Flowchart