Received a Payment Claim? Why Time Is Your Biggest Enemy
Kale Venz
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A payment claim arrives from your contractor demanding payment. Your instinct might be to set it aside while you check the details. That delay could be the most expensive mistake you make.
Under Queensland’s Building Industry Fairness (Security of Payment) Act 2017 and NSW’s Building and Construction Industry Security of Payment Act 1999, you could become legally obligated to pay the full amount – even if you dispute the work – simply by failing to respond on time.
What Is a Payment Claim?
A payment claim is a formal written demand for payment under a construction contract. It doesn’t need to be labelled “payment claim” – an invoice or progress claim identifying the work and amount will often suffice. These claims are designed to keep cash flowing through construction projects, giving claimants a fast-track recovery process.
The Danger of Doing Nothing
If you don’t respond by serving a payment schedule within the prescribed timeframe, you are deemed to have admitted the claim.
This means you become liable to pay the full amount – even if the work was defective or never performed. The claimant can take immediate debt recovery action, and you lose your right to dispute through adjudication.
The Timeframes Are Tight
Unless your contract provides otherwise, the timeframes are tight and are usually:
Queensland: 15 business days
from receiving the payment claim to serve a payment schedule.
New South Wales: 10 business days
from receiving the payment claim to serve a payment schedule.
These are strict deadlines with limited discretion for extensions. The consequences of missing them are severe.
What Is a Payment Schedule?
A payment schedule is your formal response to the claim. It must identify the claim, state the amount you propose to pay (which can be zero), and provide reasons if you’re paying less than claimed.
What Happens Next?
After serving a payment schedule, the claimant can either accept your scheduled amount or apply for adjudication – a rapid process (typically 10–15 business days) where an independent adjudicator reviews the dispute. The adjudicator’s decision is binding, meaning you must pay the adjudicated amount even if you plan to challenge it later in court.
Why You Need Legal Advice Now
Time is not on your side. Getting legal advice immediately is essential to:
Assess validity:
Not every claim is valid under the legislation. A lawyer can identify defences quickly.
Prepare a payment schedule:
An invalid payment schedule leaves you exposed as if you hadn’t responded at all.
Don’t Let the Clock Run Out
Security of payment legislation protects cash flow in the construction industry, but it places significant responsibility on you to respond quickly and correctly. The penalty for getting it wrong is severe.
Our experienced litigation team regularly assists clients with security of payment disputes across Queensland and NSW. We can review your claim, prepare a compliant payment schedule, gather evidence, and represent you in adjudication if required.
Don’t face this alone – contact CJM Lawyers today.
Disclaimer:
This article provides general information only and does not constitute legal advice. Security of payment legislation is complex and fact-specific. It is essential to seek specific professional legal advice tailored to your individual circumstances as soon as you receive a payment claim.
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