Construction Lawyer & Building Solicitors Sydney | Contracts Specialist Law Firm

Builders protected under the Security of Payment Act | Contracts Specialist

Payment Disputes

You don’t need to suffer anymore! You can get paid!
Contracts Specialist can help resolve your construction issues.
Share on facebook
Share on twitter
Share on linkedin
Share on google

Payment disputes are one of the most common occurrences in the building and construction industry. Because of these disputes, the Security of Payment Act was legislated to ensure that contractors, subcontractors, and suppliers get paid. This gives any person carrying out construction work and supplying materials the legal right to demand for payment.

Payment Disputes | Contracts Specialist

How do Payment Disputes arise?

Payment disputes commonly revolve around issuances of payment claims and payment schedules. This happens when the claimant (the one issuing the payment claim) claims for the construction work done but the respondent (the one issuing the payment schedule or making payment) refuses to pay, does not issue a payment schedule, or withholds payment. Consequently, the claimant may apply for adjudication and recover debt.

A payment claim is issued by the person carrying out the construction work and supplying related goods and services. It is a document containing the claimed amount and the breakdown of the prices. This is served to the person responsible to pay the amount on the payment claim.

Learn how to enforce a Payment Claim

 

Contents of a Payment Claim:

  • Name of the recipient
  • A statement saying that the payment claim was made under the Security of Payment Act NSW 1999.
  • Payment Claim Number
  • Reference Date
  • Claimed Amount
  • Due Date for Payment
  • Breakdown of the work done, completed or provided
  • Supporting statements (such as head contractor statements if the claimant is a head contractor)
  • Bank details of the Claimant

 

For payment claims in NSW, the payment claims must state that it is made under the Security of Payment Act, which goes as follows:

“This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW).”

This statement must be included in payment claims to ensure that its validity under the Act and to make it legally bound. In addition, it implies that the claimant has the legal or statutory right to demand payment.

A payment schedule is provided by the person whom the payment claim was issued to. It is a document containing the scheduled amount (the amount they propose to pay) in relation to the payment claim and the reasons for withholding payment. The respondent is obliged to respond to the payment claim as it is subject to the Security of Payment Act.

The respondent may include supporting documents for his/her reasons for denying or withholding the claim.

 

Contents of a Payment Schedule:

  • Name of the recipient
  • A statement saying that the payment schedule was made under the Security of Payment Act NSW 1999.
  • Payment Claim Number
  • Reference Date
  • Claimed Amount
  • Due Date for Payment
  • Reasons for withholding payment, if applicable
  • Scheduled Amount

Yes, there is.

When we refer to ‘invoice’, we are talking about Tax Invoice.  A Tax Invoice functions as evidence for the receipt of the payment and to help with applying the Goods and Services Tax or GST. Additionally, Tax Invoice is required under A New Tax System (Goods and Services Tax) Act 1999.

As for the Payment Claim, it functions as a request for payment. As mentioned earlier, this is issued by the contractor or builder who acts as the claimant. Moreover, a payment claim is required under the Security of Payment Act NSW 1999.

Payment Dispute Scale | Contracts Spacialist

What is next after Payment Disputes arise?

Under the Security of Payment Act, the claimant has the right to apply for adjudication when experiencing partial payment, late payment, and non-payment. 

For this reason, it is advisable for builders and contractors to seek the expertise of a construction lawyer. Construction lawyers could assist in resolving payment disputes by helping the client in taking the proper steps to pursue an adjudication.

An adjudication is a resolution for parties engaged in a payment dispute. It involves a third party called an adjudicator to come up with a decision to resolve the payment dispute. Moreover, an adjudication is a quicker and less expensive resort than a court process.

How can Contracts Specialist assist with Payment Disputes?

One of the services that Contracts Specialist offers deals is Debt Recovery which also covers payment disputes. Our principal lawyer, John Dela Cruz, deals with these matters day in and day out. With vast knowledge and experience, you are assured that you are given quality service.

Contracts Specialist is a Sydney-based construction law firm dealing with Building Disputes, Construction Contracts, Debt Recovery, and Strata Issues. With Contracts Specialist, you are ensured that you are in good hands.

You can be confident that you are getting the right legal advice.

Contracts Specialist is a Sydney-based construction law firm that deals with Building DisputesConstruction Contracts, Debt Recovery, and Security of Payment. With Contracts Specialist, you are ensured that you are in good hands.

Bitnami