Amendments to BCIPA Act Commence - 15 Dec 2014
What You Need to Know:
- Timeframes for service of Payment Claims and Payment Schedules have changed.
- Christmas shut down 2014 - new ‘non-business days’ apply to all contracts and claims (even if you entered into the contract or issued the claim before today).
- Claimants must give notice before commencing court proceedings.
- There have been changes to the adjudication processes & creation of the Adjudication Registry.
- Transitional arrangements apply for contracts entered into before today and for payment claims served before today.
- Now is the time to review your standard form contracts and contract administration procedures
In August this year (2014) we published a legal alert explaining a number of proposed amendments to the Building & Construction Industry Payments Act 2004 (Qld) (BCIPA). You can view that alert here.
The amendments to BCIPA were passed by the Queensland Parliament in September this year and we received notification last Friday that those amendments come into force today.
Key Change 1: Timeframes for Service of Claims & Schedules
Time limit for service of payment claims
- for Non-Final Claims: must be served within the later of the time worked out under the construction contract or within 6 months after the construction work was last carried out (old regime was 12 months)
- for Final Claims: must be served within the later of the time worked out under the construction contract, 28 days after the end of the last defects liability period (if any) or 6 months after the later of completion of all construction work or supply of related goods & services under the contract.
Time limit for serving payment schedules
Payment Claims are now split into two categories:
- Standard Claims: a payment claim for $750,000 (excluding GST) or less; and
- Complex Claims: a payment claim for more than $750,000 (excluding GST).
A payment schedule in response to a Standard Claim must be served within the earlier of the time required by the construction contract or 10 business days after the payment claim is served.
A payment schedule in response to a Complex Claim must be served within the earlier of the time required by the construction contract or:
- if the payment claim was served 90 days or less after the reference date - 15 business days after the claim is served; or
- if the payment claim was served more than 90 days after the reference date - 30 business days after the claim is served.
Key Change 2: What Is Not a Business Day
Under the amended BCIPA, a business day does not include:
- a Saturday or Sunday;
- a public holiday;
- any day between:
- 22 - 24 December;
- 27-31 December; and
- 2-10 January.
The effect of this is that no day between 22 December 2014 and 10 January 2015 will be a ‘business day’ for the purposes of the new BCIPA.
Key Change 3: Notice Before Commencing Court Proceedings
Under the new system, if a respondent fails to serve a payment schedule in response to a payment claim or fails to pay a scheduled amount by the due date, the claimant must, within 20 business days of the due date for payment, give the respondent notice of its intention to commence a court proceeding and must allow the respondent a further 5 business days in which to serve a payment schedule.
The old system permitted a claimant to immediately commence a court proceeding if no payment schedule was served in response to a claim - the claimant was not required to allow the respondent a second chance to serve a schedule.
Key Change 4: Adjudication
The amended BCIPA creates a single adjudication registry within the Queensland Building & Construction Commission (QBCC) which will be responsible for:
- maintaining a list of active adjudicators and appointing adjudicators based on their skills, knowledge & experience; and
- monitoring the performance of adjudicators and ensuring they are appropriately qualified
The current Authorised Nominating Authorities will no longer refer adjudication applications to adjudicators.
Adjudication applications must now be made in an approved form that is available on the QBCC website.
For Complex Claims, an adjudication response will be permitted to include any reasons for withholding payment, regardless of whether or not those reasons were included in the payment schedule. The response time has been extended to 15 business days after receipt of a copy of the adjudication application. If new reasons for withholding payment are included in an adjudication response the claimant will then have a further 15 business days to respond to those new reasons.
For Standard Claims, the old regime continues to apply in that no new reasons for withholding payment can be included in an adjudication response that were not included in the payment schedule. The adjudication response time for a Standard Claim is 10 business days after receipt of a copy of the adjudication application.
Key Change 5: Transitional Arrangements
Only some of the amendments apply, or will apply with some modifications, if you:
- issued a Payment Claim before today; or
- entered into a relevant contract before today.
What to do now
We recommend you review your standard form contracts and your contract administration procedures to ensure that you properly comply with the provisions of the amended BCIPA. If you need any assistance with this please contact a member of our Construction Law Team.