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BIFA Refresher Part 6 – The Adjudication Process

Throughout our previous posts we have given you an overview on the BIFA, payment claims, schedules and making an adjudication application so with just 2 articles left in this series the next obvious step to highlight is what actually happens during the adjudication process.

If a claimant has lodged an Adjudication Application under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) they are also required to give an identical copy of the application to the respondent, this is often the first indication a respondent has that an adjudication application has been lodged.

Around the time that the Adjudication Application is served, or shortly after, the QBCC will refer the Adjudication Application to an adjudicator.  If the adjudicator accepts the referral then they will serve a Notice of Acceptance on the parties.

Adjudication Response

If a respondent gave a valid payment schedule in response to the original payment claim, it is entitled to lodge an adjudication response.  This is the respondent’s formal reply to the claimant’s adjudication application.

The timing for lodging and serving an adjudication response set out in section 83 of the BIFA depends on the amount claimed in the payment claim:

  • If the payment claim was for $750,000 or less (exclusive of GST), namely a standard payment claim, a response must be made within:
      • 10 business days after being served with a copy of the adjudication application; or
      • 7 business days after the respondent has been served with the notice of acceptance of appointment (if that is later)
  • If the payment claim was for an amount more than $750,000 (exclusive of GST, namely a complex payment claim, it must be made within:
      • 15 business days after being served with a copy of the adjudication application; or
      • 12 business days after the respondent has been served with the notice of acceptance of appointment (if that is later),
      • BUT the respondent may also apply to the adjudicator for an extension of time of up to 15 additional business days, in which case the adjudication response is due on the extended date.
        Any application for an extension must be in writing, include the reasons for requiring the extension of time and be made within the original timeframe for the response.

Section 82 of the BIFA states that the adjudication response:

  • must be in writing;
  • must identify the adjudication application to which it is relating to;
  • may include relevant submissions and evidence that the respondent chooses to include;
  • may only expand on issues previously detailed on the payment schedule and must not include any new reasons for withholding payment that were not included in the respondent’s payment schedule;
  • however, the respondent may be able to raise issues relating to the validity of the payment claim, the construction contract and other issues that impact on the jurisdiction of the adjudicator, even if they did not serve a payment schedule; and
  • Must be served on the claimant not more than 2 business days after giving the response to the adjudicator.

After the Adjudication Response

After the Adjudication Response is served, generally there is nothing more for the parties to do while they wait for the adjudicator to give its decision.

In making its decision, the adjudicator has statutory power to:

  • ask both parties to provide further submissions on specific issues within a stipulated deadline;
  • request further time to make its decisions but both parties must agree in order for the extra time to be granted under the BIFA;
  • request a conference between the parties without legal representation; and
  • conduct an inspection of work to which the payment claim relates.

Both the conference and the inspections are not common occurrences in adjudicators deciding adjudication applications.

The Adjudication Decision

Unless an extension is agreed by both parties, an adjudication decision must be made:

  • For a standard payment claim, the adjudicator’s decision is due within 10 business days after:
      • they receive the respondent’s adjudication response, or;
      • if no response was given, the last day on which the respondent could have given the adjudicator a response.
  • For a complex claim, the adjudicator’s decision is due within 15 business days after:
      • they receive the respondent’s adjudication response, or;
      • if no response was given, the last day on which the respondent could have given the adjudicator a response.

However, the adjudicator may also seek to have the time to decide the adjudication decision extended by up to 5 business days.

In accordance with section 88(1) of BIFA, the adjudicator must determine:

  • whether there is any amount owing from the respondent to the claimant – which is the ‘adjudicated amount’;
  • if so:
      • the date when these monies became payable; and
      • The applicable rate of interest.

The adjudicator’s decision will be in writing and, unless specifically asked not to by the parties, will provide reasons for their decision.

Section 88(2) of the BIFA limits the things the adjudicator may consider in making its decision to the following:

  • The provisions of the BIFA;
  • Any relevant provisions of Part 4A of the Queensland Building and Construction Commission Act 1991 (Qld);
  • the terms of the relevant construction contract;
  • the payment claim;
  • All submissions, including relevant documents, that have been properly made by the claimant in support of the claim as part of the adjudication application;
  • the payment schedule, if any
  • if the respondent served a payment schedule, then all their submissions, including relevant documents, that have been properly made by the respondent in support of the schedule as part of the adjudication response will be taken into account; and
  • the results of any inspection carried out by the adjudicator.

However, the adjudicator must not consider:

  • an adjudication response if:
      • the respondent did not serve a valid payment schedule; or
      • it was not given to the adjudicator within the time required under section 83; or
  • a reason included in an adjudication response, if the reason is prohibited under section 82  this is usually a new reason that was not  originally included in a payment schedule.

Once the adjudicator completes its determination, they will inform all parties that a decision has been made.

The decision will usually only be released to the parties once the relevant adjudication fees have been paid.

In our next instalment, we will discuss what happens once the decision is received by the parties.

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.