The Security of Payment Process in 4 Steps
Step 1. All you need to do is send a Payment Claim to the Respondent, i.e., the person who is bound to pay you for construction work performed.
Step 2. This would trigger a period of 10 business days (or such period as provided in your construction contract) within which the Respondent would need to send you a Payment Schedule, which contains the amount they propose to pay (“Scheduled Amount”) in lieu of the amount you claimed in your Payment Schedule.
If they don’t send a Payment Schedule, they would have to pay the full amount of your claim. The due date for this payment will be found in your construction contract.
Of the three remedies enumerated above, Adjudication would be the most effective and convenient, and also the least costly.
Lodging an Adjudication Application
When and how to lodge an Adjudication Application would depend on the reason you’re electing to undergo Adjudication.
If Respondent doesn't serve a Payment Schedule, and doesn't pay your claimed amount when due
1. Before you can proceed to Adjudication, you need to give the Respondent a second chance to send a Payment Schedule.
3. Quick facts about the section 17(2) Notice:
4. In this scenario, the matter will not necessarily head straight to adjudication.
If: The Respondent pays the full amount of your claim within 5 business days from receipt of the Section 17(2) Notice,
Then: You’re done! No need for adjudication since they’ve already paid the full amount of your claim
If: The Respondent serves a Payment Schedule within 5 business days from receipt of the Section 17(2) Notice,
- a) if you agree with their proposed amount, then no need for adjudication (unless they don’t pay said amount)
- b) if you don’t agree with their proposed amount, then you may proceed to adjudication, with the Respondent having a right to participate by filing an Adjudication Response
If: The Respondent does not serve a Payment Schedule, nor pays the full amount of your claim,
Then: You can proceed to adjudication, but they at this point, have lost their right to file an Adjudication Response
Note that in the above cases, Application for Adjudication must be done within 10 business days from the date of expiry of the section.17(2) notice.
If Respondent serves a Payment Schedule, but doesn’t pay the scheduled amount
In this case, you have 20 business days from receipt of the Payment Schedule to apply for Adjudication.
If Respondent doesn't serve a Payment Schedule, and the scheduled amount is less than the claimed amount
How We Can Help
Contracts Specialist has over 10 years experience in debt recovery and Security of Payment. Should you wish to learn more about how to enforce your claim under the Act, or should you require assistance in facilitating your payment claims, feel free to give us a call. Your first consult is free.