Adjudication in Tasmania is the dispute resolution process within the The TAS Building and Construction Industry Security of Payment Act 2009 (the Act) which applies to construction work and/or related goods and services carried out in Tasmania. Be mindful of the following:
'Cross state legislation' which is where you may be a Claimant in Tasmania but the construction work or related goods and services was carried out in another State.
What is construction work and related goods and services?
Steps to adjudication:
There are 6 main documents involved in the process as follows:
- The Payment Claim -
The Claimant must serve a Payment Claim on the Respondent. The payment claim must contain the words ‘This is a payment claim made under the Building and Construction Industry Security of Payment Act 2009 TAS’ and clearly identify the construction work or related goods and services carried out, identify the Respondent, the amount of payment which is due and any other information required as per the construction contract. For example, the contract may require you to provide a statutory declaration with the payment claim.
LESSON: Be sure you know the requirements under the contract before sending your payment claim.
The payment claim must be served on or from the reference date. The reference date will be the time stipulated in the contract (for example the 26th day of the month) or, if there is no time stated, then the last day of the month for works or goods and services carried out up to that date.
Service of the payment claim on the Respondent can be done by way of:• Facsimile (ensure to keep transmission report);• Express post (Australia Post provides a tracking facility);• Registered mail (Australia Post provides a tracking facility);• Courier (Signature required);• Hand delivery (Signature required); or• Any other method provided under the Contract.
If you are serving the payment claim by regular post ensure you have the correct address of the Respondent as per the contract.
The Claimant must ensure you know who the Respondent is! For example, you may think you are working for modern Kitchens when you are really working for Modern Kitchen Installations Pty Ltd. Refer to information in Resources below.
- The Payment Schedule -
• Identify the Payment Claim; and• Must indicate the amount of payment (if any) that the Respondent proposes to make.
IMPORTANT: A payment Schedule must be served within the time required under the construction contract, or before the expiry of the applicable day, whichever expires earlier.
The Respondent has 20 business days to provide a Payment Schedule after receipt of the payment claim if the claim relates to a residential structure to e built on land; and the respondent is the owner of the land; and the respondent is not a building practitioner, otherwise it will be 10 business days after the payment claim is served. The payment schedule must identify the payment claim, must indicate the amount of payment (if any) that the Respondent proposes to make. If the amount of payment is less than the claimed amount the Respondent must provide reasons for withholding payment. In these circumstances if the Claimant does not agree with the payment schedule the Claimant is entitled to make an adjudication application. The adjudication application must be lodged within 10 business days after receipt of the payment schedule. Remember, a copy of the adjudication application must be served on the Respondent.
No Payment Schedule: If there is no payment schedule, you then wait for the due date for payment being:
(1) On the day when the payment becomes due and payable on the date on which the payment becomes due and payable in accordance with the terms of the contract.
(2) Despite subsection (1) –
(a) If a contract does not expressly provide for when a progress payment becomes due and payable; and
(b) A payment claim is made under section 17 in relation to the progress payment- the progress payment becomes due and payable before the expiry of the applicable day
before giving the Respondent a second and last chance to give you a payment schedule.
WHAT IF the Respondent does not provide a Payment Schedule within the required time and does not pay the claimant the claimed amount on the due date for payment?
The claimant must notify the Respondent within 20 business days immediately following the due date for payment of it’s intention to apply for adjudication and gives the Respondent another opportunity to provide a Payment Schedule within 5 business days, this is referred to as S21(4) Notice.
If the Respondent does not provide a Payment Schedule within the required time or pay all or any part of the claimed amount on the due date for payment then the Claimant may recover the claimed amount or unpaid portion as a debt due in any court of competent jurisdiction or make an adjudication application and may serve notice of the Claimant’s intentions to suspend carrying out the construction work or suspend the supply of related goods and services.
Prior to the making of an adjudication application, the Claimant must first notify the Respondent of it’s intention to apply for adjudication. In this circumstance the Claimant must notify it’s intention within 20 business days immediately following the due date for payment that the Claimant intends to apply for adjudication and provide the Respondent with an opportunity to provide a payment schedule within 5 business days, this is referred to as a S21(4) Notice.
If the Respondent does or does not provide a payment schedule within 5 business days after receipt of the intention notice, the Claimant has 10 business days at the END of the 5 day period to lodge an Adjudication Application.
Adjudication Response - If the Claimant applies for adjudication and the Respondent has not provided a Payment Schedule in either circumstance, the Respondent is NOT eligible to provide an Adjudication Response for an Adjudicator to consider. This could be detrimental to a Respondent as it is most likely the adjudicator will find in favour for the Claimant once he/she is satisfied the process has been strictly adhered to and the documents provided by the Claimant support the Claimant’s claim.
Resources as a step by step guide through the Adjudication Process:
See Flowchart for a step by step guide.
It is important to know who you are dealing with so do your homework. Here are some helpful guidelines
Who are you working for? You may think you are working for Fred Bloggs from ABC Electrical, so you address your invoices to ABC Electrical. When ABC Electrical fails to pay you lodge an adjudication application and you are successful in your application, when ABC Electrical does not pay, you request an Adjudication Certificate. The adjudication certificate must state the name of the Respondent as per the determination and in this case it is ABC Electrical. Upon lodging your certificate with the court to enforce judgment you find out there is no such entity as ABC Electrical as it is an unregistered trading name and the actual name of the company that you are dealing with is Fred Bloggs Electrical Pty Ltd. So where does this lead you - nowhere. Judgment cannot be enforced and you have to start from square one.
How can you find out who you are working for? There are a multitude of documents you can review to ascertain who you are working for - the contract, a letter of intent, a purchase order, correspondence, ASIC , ABN Lookup and Licence Check
Security of Payment Legislation Assistance and Information
The Security of Payment legislation is designed for self help towards adjudication but there are many people willing to help you with your progress payment for a price.
So we have uploaded free material which will help you work through the maze of securing payment under the various legislations and if you do need help then the cost of investigative work can be significantly reduced. Most of the information is in the public domain but could be of some assistance to you.
Please read our disclaimer when using any of these resources.
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