Vic: Claimant Enforces the Determination
This section describes the process of converting an adjudication determination to a judgment of the Court and having it enforced.
- Take the adjudication certificate to the appropriate Court and complete an affidavit form which is available at the Court. In the affidavit you need to swear whether any money has been paid to you by the respondent which would reduce the amount owed by virtue of the adjudication determination.
- With assistance of Court Registry staff, have the adjudication certificate registered as a judgment of the Court. This judgement will result in obtaining a money order, known as a debt certificate.
- Select an option for enforcement of the debt certificate. Legal advice or other assistance may be sought. Court Registry staff cannot assist in this decision.
- Commence your chosen enforcement option at the appropriate Court with the assistance of Court Registry staff.
A respondent needs be aware that the Commonwealth and various States have introduced new procedures to take into account a refusal to comply with an adjudication determination when awarding tenders. In the case of the Commonwealth, failure to pay the determined amount can lead to exclusion or suspension from the list of approved tenders, thereby denying the respondent the opportunity to tender for new work.
Setting aside the Judgment
In rare cases, a respondent may make application to set aside the judgment for the adjudicated amount. However to do so, the respondent must pay into Court as security the unpaid portion of the adjudicated amount. This eliminates the advantage, which a respondent had when the respondent could retain the disputed amount while legal proceedings were in progress.
A Court is unlikely to intervene to prevent the enforcement of an adjudication decision. Such applications would normally be made to the Supreme Court and are expensive to run and difficult to win. However some grounds on which a court may intervene include:
- there was no construction contract (within the meaning of the Act) between the parties;
- the respondent was not served with a payment claim under the Act;
- the claimant is guilty of fraud.
Generally adjudicator error, unless it goes to grounds of jurisdiction or denial of natural justice, is insufficient to attract court intervention. In most cases it is quicker and more cost effective to comply with the adjudication decision and sue separately for repayment of any alleged overpayment. While in all such matters legal advice should be taken, we strongly advise that the advice is taken from a lawyer familiar with the operation of the Act.
Once the respondent makes full payment to the claimant, including adjudicator fees and any interest, the payment process under the Act is complete.
At conclusion of the process, both the respondent and claimant retain their legal rights to pursue any remaining grievances whether it be by litigation or exercising any other dispute resolution rights as described in the contract.
The payment process under the Act is complete.
Claiming against the Principal
Where the respondent continues not to pay the adjudicated amount, a subcontractor can also recover the adjudicated amount out of money that is payable to a head contractor by its principal for construction work or goods and services that the principal engaged the head contractor to carry out. i.e. the subcontractor can require the principal to pay the amount owing money to them and not the head contractor.
Before a subcontractor can obtain the money owed from the principal:
- a debt certificate must have been issued by a court; and
- the subcontractor must serve a notice of claim on the principal, as this operates to assign the subcontractor the obligation of the principal to pay the money owed under its contract with the head contractor.
Once a notice of claim is served, the principal must pay the subcontractor the money that it owes the head contractor. If the principal fails to pay, the subcontractor may sue the principal to recover the debt in court.
This process commences by serving a Notice of Claim as provided by Regulation 7 of the Building and Construction Industry Security of Payment Regulations 2013. Other relevant forms for discharging the notice and for notification to the principal are also found in the Regulations.