For email enquiries, please click here

BIFA Refresher Part 4 – Payment Schedules

So, you have received a payment claim served on you under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA),

What next???

If you decide to pay the full amount of the payment claim, you do not need to do anything further (other than pay by the due date). However, if you decide to dispute the claim for payment, either in part or in full you will need to serve a payment schedule.

If you do not serve a payment schedule, not only will be liable to pay the full amount claimed under the payment claim (because the claimant will be able to recover the full amount claimed as a debt in court or apply for adjudication if you do not pay by the due date), you forfeit any rights to raise reasons to dispute the claimed amount in any such proceedings.  Worse, if you don’t serve a payment schedule or pay in full by the due date, you will be committing an offence under the BIFA which may attract a fine and it is also grounds for the QBCC taking disciplinary action under the Queensland Building and Construction Commission Act 1991 (Qld).

In this article we look at what your payment schedule needs to include if you have decided to dispute a payment claim under BIFA.

When you receive a payment claim we recommend you confirm that the claimant was entitled to claim a progress payment and has issued a valid payment claim (which we have discussed our previous articles on entitlement and valid payment claims).

To be valid under section 69 of the BIFA, your payment schedule must:

  • be a written document.
  • identifies the payment claim to which it relates.
    It is best to refer to the payment claim by any title the document might have, the date on the document and the date you received it. For example:
    Tax Invoice No. 1234 dated 1 January 2019 and received on 3 January 2019”.
  • state the amount of the payment you propose to make to the claimant (the scheduled amount).
    This amount may be some amount less than the claimed amount, or it may be nothing (nil), but you need to state this clearly.
  • state the reasons why the amount you propose to pay is less than the amount claimed and/or why you are withholding payment.
    If you don’t include a reason for withholding payment in your payment schedule, you cannot raise it later so, when writing your reasons, consider:
    • any reasons about the claimant’s entitlement to claim a progress payment;
    • any reasons about the validity of the payment claim;
    • any substantial issues for a specific item of work, such as the rates, quantities or amount of work completed; and
    • any technical issues for a specific item of work, such as a valid claim for a variation or contractual time bars.

For each item, you should specify how much you agree to pay, the amount you dispute and your reason why you are paying less. All reasons for any one item should be included, even if you have included it for another item. You may also want to refer to, or attach, any relevant documents that support your reasons.
The reasons you state in your payment schedule must be sufficiently detailed to allow the claimant to know why you are not paying the full amount and make a decision whether or not to pursue its claim for that item.
Your payment schedule is the document that sets the parameters of the dispute and therefore it needs to contain enough particulars about the real issues in the dispute so the claimant is able to understand the nature of the case it will have to meet in any adjudication.

  • be served on the claimant in accordance with the contract, section 102 of the BIFA and/or section 39 of the Acts Interpretation Act 1954 (Qld).
    Service requirements are discussed in our earlier article about payment claims and the same rules apply for payment schedules
  • served within the earlier of
    • the time required in the construction contract; or
    • 15 business days after the payment claim is served.

This one is fairly self-explanatory, if the contract specifies a period of time less than 15 business days, comply with the contract requirements. Otherwise, make sure you serve your payment schedule within 15 business days – this means that claimant needs to have received the payment schedule on (or before) the 15th business day.  Also remember that BIFA has its own definition of business days – a business day does not include a Saturday or Sunday, a public holiday, special holiday or bank holiday in the place in which any relevant act occurs or any day between 22 December and 10 January.
As BIFA has done away with the ‘second chance’ notice that was part of the former regime, it is very important that you make sure you serve your payment schedule within the relevant time period, otherwise the regime proceeds as if you did not serve one.

If you have any concerns about your obligations in relation to BIFA, or your options for recovering payment under BIFA, feel free to contact us to get in touch.

Disclaimer
The content of this blog article is intended to provide general information as a summary of the subject matter, which is current at the time of publication. It is intended for information purposes only and should not be regarded as advice. Specialist advice should be obtained about your specific circumstances before taking action on any issue dealt with in this publication.