The Tasmanian Building
The Tasmanian Building and Construction Security of Payment Act 2009 and making an Adjudication Application
The purpose of the Building and Construction Security of Payment Act 2009 (the Act) and each States or Territories relevant Act is to fast-track a Builders ability to obtain a determination on the monies they are owed under a constructions contract by way of adjudication. The process is informal, based on the paperwork and the process requires adherence to stringent time frames.
An adjudication certificate should then be registered as a judgment in a Court with appropriate jurisdiction.
Pursuant to subsection 17(2)(f) of the Tasmanian Act, reference of the Act needs to be made in the invoice for the works and/or materials supplied under a construction contract for the Act to apply.
However, there are numerous common law authorities which suggest that a strict reference of the Act does not mean the Act does not apply. To reiterate, the intention of the Act was to provide an informal and fast-tracked approach to Builders obtaining payment for works and materials provided. In the case of Hickory Development v Schiavello (Vic) Pty Ltd [2009] VSC 156 at paragraph 46, Justice Vickery stated, “the Act also manifests another central aspiration, that of freedom from excessive legal formality. The provisions demonstrate a pragmatic concern to provide a dispute resolution process which is not bedevilled with unnecessary technicality”.
The message from this case is that arguments focused on fine legal points will defeat the objectives of the Act, which are to provide cost and time advantages to getting paid.
The following must be considered when determining whether the Tasmanian Act can assist with you obtaining a fast-tracked outcome:
- Subsection 7(2) of the Tasmanian Act states that “this Act does not apply to a building or construction contract to the extent to which it relates to building work or construction work carried out outside this State.”
- Subsection 7(3) states that “despite subsection (2), this Act applies to any building or construction contract in so far as the contract relates to the supply by a person in this State of building or construction-related goods and services, even though the goods and services are supplied in respect of building work or construction work carried out outside this State.”
Each contract will form its own adjudication application. Therefore, each adjudication application will require all the relevant facts, evidence and invoices to be compiled.
It is imperative that you are mindful of the following processes as an adjudication application is dependent upon stringent timeframes. A failure to comply with the strict timelines and requirements of the Act will cause and adjudication application to fail.
Pursuant to Section 17(6) payment claims must be made in accordance with the terms of the contract or within 12 months after the date that the works were carried out.
Subsection 19(4) states that if a respondent:
- becomes liable to pay the claimed amount under the payment claim; and
- does not pay the entire claimed amount on or before the progress claim due date in which the payment claim relates, then a claimant can consider making an adjudication application under section 21 so long as the progress claim makes reference to the Act.
A respondent has the option to provide a Payment Schedule if they dispute the amount they say is owed under the payment claim. Pursuant to Section 19(3) the respondent has 10 business days to provide a Payment Schedule.
If the respondent does not provide a Payment Schedule, the claimant will need to provide further Notice pursuant to Section 21(4) of their intention to make an adjudication application before the same can be made. The amount of days for further Notice is 20 business days after the due date payment of the payment claim.
The respondent then has 5 business days to provide a Payment Schedule after the date the Notice is given.
The claimant will then have 10 business days after the expiration of the 5 business days to serve the adjudication application on an Authorised Nominating Authority pursuant to Section 21(1) and provide a copy of the application to the respondent pursuant to Section 21(7).
The respondent will 10 business days from the date of receipt of the adjudication application or 5 business days from the date an ANA is appoint (which is the later) to serve its adjudication response, pursuant to Section 23. However, the respondent will be unable to make a response if they failed to provide a payment schedule.
- If the adjudication application is below $750,000, the reasons in the response for withholding payment are limited to the reasons contained within the payment schedule.
- If the adjudication application is above $750,000, any reasons can be given as the respondent will not be limited to the payment schedule.
An adjudicator will then an amount of days based on a scenario of events which are as follows:
- 10 business days after an adjudication response is received by the adjudicator ; or
- if the respondent has provided the claimant with a payment schedule, then 10 business day after an adjudication response is provided in respect of the claim; or
- if the respondent did not provide a payment schedule, then 10 business days from the date the application was accepted by an adjudicator; or
- further time if the claimant and respondent agree.
