Surprise! It’s a Christmas payment claim

Imagine this: You close shop early on Friday 21 December 2018 and leave for a well-deserved holiday. You come back on Monday 14 January 2019 to a payment claim that was delivered to your office’s registered address on Monday 24 December 2018. 

You’ve missed the critical date for responding.

In the midst of preparing your business for closure this Christmas, those in the construction industry should take this potential scenario into account before packing up shop. 

In Victoria, be prepared for security of payment claims arriving just before Christmas, designed to catch you off-guard. 

The consequence of failing to respond within time is that you become liable for the full amount of the payment claim.

Time for responding to payment claims

Under the Building and Construction Industry Security of Payment Act 2002 (VIC)(the Act), a person who receives a payment claim must, if they object to the claim, provide a payment schedule in response within:

• any period stated in the contract for the submission of a payment schedule
• 10 business days of receiving a payment claim, whichever is the lesser.

Under the Act, a payment claim can be served by several means including:

• delivering the payment claim personally to the respondent
• lodgement at the respondent’s ordinary place of business during normal office hours
• post or fax to the respondent’s ordinary place of business or in any manner provided by the contract
• any other manner specified in the relevant construction contract.

Service by email or Aconex can also be regarded as valid means of serving a payment claim.[1]

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, there is no moratorium in the shut-down period except on Christmas Day, Boxing Day and New Year’s Day.

Have a plan in place now

With office closure and staff away on leave at different times, the risk in the Christmas period is that a payment claim is received and then not responded to in time. 

Do you anticipate or are you expecting a payment claim to be made? You can prepare by:

• reviewing the status of your projects and determine whether there may be issues giving rise to a claim under the Act
• confirming the location of your registered place of business (this may be an accountant) and the nominated address for service
• ensuring that emails, fax machines and any relevant addresses for service are monitored regularly throughout the period of closure
• planning for any project representatives going overseas by diverting their email and ensuring a nominated person is across the status of their project.

Holding Redlich is on hand to assist you during the holiday period.

[1] Metacorp Pty Ltd v Andeco Construction Group Pty Ltd [2010] VSC 199

Authors: Scott Schlink & Christabel Teo

Contacts

Melbourne
Stephen Natoli, Partner 
T: +61 3 9321 9796 
E: stephen.natoli@holdingredlich.com

Kyle Siebel, Partner
T: +61 3 9321 9877
E: kyle.siebel@holdingredlich.com

Scott Schlink, Senior Associate
T: +61 3 9321 9939
E: scott.schlink@holdingredlich.com

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

Share this