New Security of Payment provisions finally to come into effect – but next stage of Project Bank Accounts pushed back
The Queensland government has announced that the Security of Payment provisions of the Building Industry Fairness (Security of Payment) Act (BIFA) will
commence on 17 December 2018.
The subjective intent of the sender is likely to be irrelevant to determining whether something is or is not a Payment Claim. You will not be able to say, “I didn’t mean for it to be a Payment Claim”. If it matches the statutory criteria, then it will be a Payment Claim, with the relevant consequences flowing from it (including the potential to unwittingly “burn” reference dates).
3. You have to give Payment Schedules just like your clients – including to suppliers.
Likewise, invoices from your suppliers and subcontractors which would not be Payment Claims under BCIPA could be Payment Claims under BIFA if they met the statutory criteria.
If you do not:
- Pay such a Payment Claim in full; or
- Respond with a fulsome Payment Schedule (noting that all reasons for non-payment must now be included; regardless of the value of the Payment Claim),
then you could be faced with an adjudication application/or Court proceedings in which you have almost no viable arguments.
4. A claimant no longer has to give a second chance for a Payment Schedule
Under the old Act there was a requirement to give the recipient of the Payment Claim a second chance to deliver a Payment Schedule before the claimant could go to adjudication or Court. This has now gone.
Generally, however this new provision is likely to significantly reduce and often eliminate the need for people from whom retention monies or securities are being retained to spend tens of thousands of dollars applying to the Courts for an injunction to enforce their right to the return of retention monies or release of security.
11. Subcontractor charges improvements
The new Act overcomes a number of procedural or practical problems with subcontractor’s charges. For example, parties in the contractual chain have always been obliged to provide information such as particulars of the correct contracting party but because there has been no penalty, this information has often not been provided. The result has been that contractors cannot work out exactly which entity they should be serving to create a subcontractor’s charge or they serve the wrong entity.