VIC: Respondent to Comply with Determination
The Act requires payment of any adjudicated amount within 5 business days of the date of receipt of the determination or by the due date of payment, whichever is the later. Adjudicate Today will always forward a copy of the determination to both parties. The date of receipt of the determination by the respondent is business day 0 for purpose of counting 5 business days.
Where the respondent is to make a payment to the claimant, the claimant should forward the respondent:
- a copy of the adjudication determination (This assists in avoiding a dispute over date of receipt of the determination); and
- an invoice totaling the adjudicated amount, all fees and charges paid to the adjudicator in the proportion determined by the adjudicator (if there is no reference in the determination, the Act requires 50/50 payment) and any interest awarded by the adjudicator (calculated to the date of the invoice).
It is not uncommon for a respondent to make a "part-payment" during the course of the adjudication proceedings. However, it is the adjudicator's obligation to determine the matter on the basis of the adjudication application and not some lesser (or greater) amount. In this case the claimant should reduce the amount invoiced to the respondent by the amount of the "part-payment". If the adjudicator determines the claimant has no entitlement to an adjudicated amount, the determination may still require the respondent to pay some component of the adjudicator's fee. Recovery of such costs is available to the claimant under the procedures of the Act. As the debt created by the adjudication determination is a statutory debt, it is generally easy to enforce in the courts. Concurrent proceedings whether they be mediation, arbitration, expert determination or litigation can't prevent the adjudication proceeding or the effect of the adjudication determination. A court is unlikely to intervene to prevent the enforcement of an adjudication determination. Generally such applications must 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;
- within the requirements of the Act, the adjudicator failed to treat any party fairly (natural justice).
Generally adjudicator error, unless it goes to grounds of jurisdiction, is insufficient to attract court intervention. In most cases it is quicker and more cost effective to comply with the adjudication determination 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.
A respondent who is dissatisfied with the adjudicator's determination and has paid the amount due to the claimant has the option of suing separately (or exercising any other dispute resolution rights as described in the contract) for repayment of any alleged overpayment. However it is the respondent (not the claimant) who is now "out of pocket" and must prove a cause of action with all the prospects of the delay, cost and stress involved in recovering the alleged overpayment. Similarly, if the claimant considers that the amount determined by the adjudicator is too little, the claimant can sue (or exercise any other dispute resolution rights as described in the contract) for the balance, but that claim cannot be a claim under the Act.
Please move to the next step on the Victorian flowchart being EITHER "Full adjudicated amount, including interest & adjudication fees paid. Payment Process under the Act complete" OR "Respondent does not pay full or any part of adjudicated amount, including any adjudication fees & interest", whichever is applicable in the circumstances.