News

News

BIF Legislation has commenced!

December 20th, 2018

A reminder that chapter 3 and chapter 4 of the Building Industry Fairness Act 2017 (“BIF”) commenced on 17 December 2018.  BIF now applies to all payment claims for construction work, regardless of the contract date.  BCIPA only applies to claims made before 17 December 2018.

Key changes:

  1. No requirement to include the words “This is a Payment Claim under the… Act”; an invoice or a ‘request for payment’ which describes the construction work and states the amount sought will be a valid payment claim.
  2. A respondent who receives a payment claim must either:
    • pay the claim in full by the due date; or
    • issue a payment schedule by the due date.
  1. A fine may be imposed for a failure to respond or pay.
  2. No ‘second chance’ to issue a payment schedule.
  3. New time limits for payment schedules and adjudication applications.

A snapshot of the important timeframes:

Payment schedule

Payment due date

The earlier of the period in the contract or 25 business days.

As provided for in the contract[1] or 25 business days.

Adjudication application1. Payment schedule less than payment claim:  30 business days from payment schedule.
2. No payment schedule: 30 business days from the later of payment due date or payment schedule due date.

3. Failure to pay full amount scheduled: 20 business days after due date.

Particularly around the Christmas period, take care to calculate your dates correctly by checking your contract and the definitions of a business day in BIF.

For further details or assistance with giving or responding to a payment claim, or making or responding to an adjudication application, please contact our Senior Associate, Rowan Wilson on 4036 9700.

[1] Caution : A provision in a construction management trade contract or subcontract providing for payment of a progress payment later than 25 business days (QBCC Act 67U), or a provision in a commercial building contract providing for payment of a progress payment later than 15 business days (QBCC Act 67W) will be void, making the due date for payment under BIF 10 business days.

More

Construction Law Update

September 27th, 2018

In our last construction law update we informed you that the changes to the Building and Construction Industry Payments Act 2004 (BCIPA) being introduced by BIF (the Building Industry Fairness Act 2017), were to be delayed until December 2018.  A summary of the changes to be introduced was detailed here.

It remains to be seen whether the legislation will commence operation in December in its current form or if it will be ‘tweaked’ once again.  One prospect is that the recommendations of the “Murray Review” will be implemented in new legislation.

Murray Review

Mr John Murray, a lawyer and adjudicator, was tasked by the Commonwealth Government to review the disparate security of payment laws in all states and territories.

The headline recommendation from the Murray review is for an Australia-wide harmonised model for security of payment to be adopted, based on the “East Coast Model”.

Specific recommendations for the harmonised security of payment scheme include:

  1. extending the regime to the residential housing sector to enable a builder to make a progress payment claim against an owner-occupier;
  2. abandoning ‘reference dates’, and simply allowing one claim for every named month, or more frequently if the contract provides;
  3. enabling a builder to make a claim where a contract is terminated, for work carried out up to the date of termination;
  4. requiring a claimant to identify that the claim is made under the Act (an existing requirement in Queensland which will not be required if the BIF reforms take effect in December 2018);
  5. requiring a claimant to include a supporting statement with any payment claim stating that all subcontractors have been paid (and a false or misleading supporting statement constitutes an offence);
  6. giving a payment schedule within 10 business days or as the contract provides (the same as the existing legislation);
  7. a claimant serving a notice of intention to adjudicate if the respondent does not give a payment schedule (the same as the existing legislation, but this second chance step is to be removed if the BIF reforms take effect in December 2018); and
  8. a review mechanism for adjudications where the adjudicated amount is $100,000 or more higher than the scheduled amount, or $100,000 or more lower than the claimed amount.

Consistent laws throughout Australia would certainly be a welcome change and provide clarity to the area.  It is a significant difficulty for lawyers and clients that decisions made by adjudicators and Courts cannot necessarily be applied outside the state in which they are made, and that there are very few decided cases on particular issues.

Watch this space for further updates on the proposed changes to Queensland’s BCIPA regime; either some or all of the Murray Review recommendations, or the changes intended by the BIF legislation.

More