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BIFA Refresher

It has now been roughly 6 months since the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) commenced, overriding the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) and the Subcontractors’ Charges Act 1974 (Qld) (SCA), combining similar provisions into a single act as well as establishing Project Bank Accounts for certain types of projects.

As claims under the BCIPA have now substantially ceased (other than any outstanding Court proceedings), we thought that now was an appropriate time to review the requirements of the BIFA and we have broken it down into parts to make it simpler to digest.

During this series of articles, we will review some of the key provisions of Chapters 3 and 4 of the BIFA from the differences between the previous BCIPA regime and the new regime set out in Chapter 3 of BIFA to the key requirements for payment claims, payment schedules, adjudication applications, adjudication responses and notices of charge.

Part 1 – Key Differences

Chapter 3 of BIFA applies to all payment claims made after 17 December 2018, regardless of when the contract was formed. The key differences between it and the previous BCIPA regime include:

  1. The requirements for a payment claim – these no longer need to be endorsed or include a notation that it is a payment claim under BIFA. However, a payment claim must include a request for payment, although the use of the word “invoice” is enough to satisfy this requirement;
  2. In most cases, BIFA allows respondents additional time to serve a payment schedule, 15 business day instead of the previous 10 business days;
  3. However, BIFA had done away with the ‘second chance notice’ under BCIPA, which gave respondents a further 5 business days to give a payment schedule before a claimant could take steps to recover the claimed amount. Action to recover payment can now be taken by a claimant without further notice to the respondent;
  4. It is now an offence under BIFA for a respondent to not provide a payment schedule unless it pays the claimed amount in full by the due date for payment and this is also grounds for the QBCC to take disciplinary action.
  5. The timeframes for claimants lodge an adjudication application has also been extended under the BIFA.
  6. If a payment claim is for less than $25,000, the Building Industry Fairness (Security of Payment) Regulation 2018 (Qld) (relying on section 201 of the BIFA) limits the length of adjudication submissions that can be lodged to 10 pages and restricts the types of documents that can be lodged with those submissions.
  7. BIFA prevents respondents from raising any new reasons for withholding payment which were not included in its payment schedule, regardless of whether it responds to a standard or complex payment claim. In practice, it appears that where the respondent’s new reason goes the adjudicator’s jurisdiction to decide an adjudication application, adjudicators will likely consider these new reasons and invite further submissions from the parties.
  8. BIFA provides for a references date on the date of termination of a contract, if the contract does not do so.

The major impact of the changes in the new regime is that it may no longer be clear to respondents that the document they have received is a payment claim and there is only one chance to respond to it.  Therefore, care should be taken to ensure all requests for payment are properly responded to within the required timeframes, to avoid the risks associated with not providing a payment schedule.

If you have any concerns about your obligations in relation to BIFA, or your options for recovering payment under BIFA, feel free to click here and 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.