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Vic: Claimant Prepares s18(2) Notice

Authorised Nominating Authority

If:

  • The respondent has not provided the payment schedule within 10 business days of being served with a payment claim; and
  • Failed to pay the claimed amount by the due date; and
  • The claimant wishes to adjudicate the payment claim;

the respondent must be given a second opportunity to serve the payment schedule. The notification of the second opportunity is made under section 18(2) of the Act.

To provide the notice:

  • The claimant must notify the respondent within 10 business days after the due date for payment has passed that they will be proceeding to adjudication if the full amount claimed is not paid. This is called the 2nd opportunity or optional adjudication or section 18(2) notice.
  • The intent of the notice is to give the respondent a written notice that they have a further 2 business days to provide a payment schedule and that if the payment schedule is not received, the respondent is prevented by the Act from lodging an adjudication response in subsequent adjudication proceedings.

The following are suggested words for a section 18(2) notice:

In response to this company’s Payment Claim made on this date ____________________ for $____________________, your company failed to provide a Payment Schedule within the time allowed by the Building and Construction Industry Security of Payment Act 2002 (Vic) (‘the Act’).

As a consequence, your company became liable to pay the whole amount of the Payment Claim on the due date for payment. Your company has failed to pay the whole claimed amount by the due date for payment.

Our company has elected to apply for adjudication of the Payment Claim. Your company has two (2) business days in which to serve a Payment Schedule or pay the Payment Claim in full.

If, within that time, your company fails to pay the whole amount of the Payment Claim, this company will proceed to adjudication. If your company again fails to serve a Payment Schedule, your company will be barred from lodging an adjudication response [see section 21(2A) of the Act].

Click here to download example of s.18(2) Notice

Service of s.18(2) Notice

Claimants should type the notice on letterhead, complete the date and $ fields and sign the notification. The most common method of service is fax to the respondent's ordinary place of business. Email to the respondent's address may be used if this is the normal mode of communication.

The claimant should ensure that the full page fax journal report is retained in the event of a dispute as to the date of service or whether the notification was served at all. All fax machines provide at least three journal report options.

  1. No report
  2. One line report so as reports of many faxes are on one page
  3. Full page report showing the time, date, fax number and partial photocopy of the first page of the notification.

The full page report (Option 3) is strongly preferred if there is a dispute over service.

Other methods of service are in accordance with any contract provision or served in accordance with the Act by delivering it:

  1. Courier - signature required
  2. Mail - Express Post: keep express post tracking number for delivery verification
  3. Platinum Post: signature required
  4. Ordinary Post: make a statement verifying the address, date of postage and other relevant details
  5. Email (only to an email address which has a history of usage between the parties and/or as an agreed method of service of notices) - In email options, tick both "request a delivery receipt" and "request a read receipt"
  6. In person - Ensure a receipt is obtained; or
  7. A method prescribed under the relevant construction contract.

Tips:

  • Claimants are strongly advised to keep a record of the time, date and manner of service on the claimant. A respondent may deny receiving the notice in which case the claimant must be able to evidence the date of service.
  • When items are sent by ordinary post, allow sufficient time for them to be received. Generally, items sent by ordinary post are deemed to be received on the fourth working day after posting. We recommend against post as respondents have denied receipt.

Please move to the next step on the flowchart being "Respondent has 2 business days from receipt of Adjudication Notice [s.18(2) notice] to prepare & serve Payment Schedule".