Christmas security of payment claims in Victoria

‘Tis the Christmas season again. While for most this is a period of joy, for practitioners in the construction industry this can also mean dealing with the anxiety of receiving security of payment claims. In this article, we set out some important reminders so that your return after the Christmas or New Year office closure won’t be met with a nasty surprise.

In our previous article here, we discussed the critical timeframes for responding to payment claims in Victoria under the Building and Construction Industry Security of Payment Act 2002 (Vic) (Act) and considered precautions which could be taken especially around this time of the year.

This year, we turn our attention to adjudication applications under the Act arriving just before or during your office closure.

Timeframes for responding to an adjudication application

Under the Act, an adjudication application must be made by a claimant to an authorised nominating authority and a copy served on the respondent.

If you are served with a copy of the adjudication application, a response to the adjudication application must be served with the authorised nominating authority within (whichever expires later):

• five business days of receiving a copy of the adjudication application; or
• two business days after receiving notice of the adjudicator’s acceptance of the application.

Critically, business days under the Act are defined as any days which are not Saturdays, Sundays or days which are observed as public holidays throughout Victoria. Unlike some other states and territories, there is no moratorium in the shut-down period except on Christmas Day, Boxing Day and New Year’s Day.

An adjudication application must be served in accordance with any notice provisions stated in your contract. In the absence of agreement, an adjudication application may be served on a respondent in the following ways:

• in person
• by lodging it during normal business hours at the respondent's ordinary place of business
• by posting it to the respondent's ordinary place of business
• by faxing it to the respondent's ordinary place of business; or
• by email, where an email address has a history of usage between the parties.

The risk during your office closure period is that an adjudication application may be served at your unattended offices (including by hand or by fax) or sent to an unmonitored email address. This is especially important to consider given the effects of COVID-19 on our office operations.

With the short time frames under the Act for providing an adjudication response, even losing a day can be costly.

Plan now

The claimant may make and serve on you an adjudication application only in the following circumstances:

• where you have provided a payment schedule indicating an amount to be paid that is less than the amount claimed in the payment claim
• where you have failed to pay any amounts by the due date for payment; or
• where you failed to provide a payment schedule.

No notice is required to be provided of a potential adjudication application (except where a payment schedule was not provided). Accordingly, we recommend that you:

• review your projects to determine if any of the above circumstances apply such that you should anticipate an adjudication application being served on you
• plan for any project representatives going overseas by diverting their emails
• ensure that all emails, fax machines and any relevant addresses for service (including your registered business address) continue to be monitored daily throughout the closure.

If you are expecting or anticipate an adjudication application to be served on you during this holiday season, please contact us for assistance.

Authors: Scott Schlink & Christabel Teo

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Scott Schlink

Christabel Teo

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