Building and Construction Industry Security of Payment Act 1999 (“BCISPA”) in New South Wales provides a legal framework for the timely and cost effective recovery of payments owed for construction work or the supply of related goods or services under a construction contract.
Construction work and the supply of related goods or services can include, but is not limited to:
- Building works;
- Preparatory works;
- Fabrication of materials;
- Provision of labour;
- Architectural, design or quantity surveying services relating to construction work; and
- Hire of plant and equipment.
When can I make a BCISPA Payment Claim?
A payment claim can be made with respect to the building work carried out prior to the reference date as specified in the terms of the building contract or otherwise as determined by BCISPA, usually being on the last day of the month in which the works were carried out or the goods or services were supplied.
What should I do if I am served with a BCISPA Payment Claim?
A party served with a payment claim has ten business days from the date of service to provide the claimant with a payment schedule.
The payment schedule must both:
- Identify the payment claim to which it relates; and
- State the amount of the payment, if any, that the party proposes to make.
Where the amount of a payment claim is to be disputed, it is extremely important that a payment schedule be served within the time permitted under BCISPA. A failure to do so may result in the party served with the payment claim becoming liable for the whole claimed amount.
What is an adjudication?
Adjudication is a less formal legal process whereby a respondent’s payment schedule is assessed by an adjudicator in light of the claimant’s payment claim. This is done by way of an adjudication application.
What if the Respondent does not serve a payment schedule or pay an adjudicated amount?
Where a party fails to serve a payment schedule in response to a payment claim, the claimant may either:
1 apply directly to the Court for judgment against the respondent for the claimed amount; or
2 proceed with the adjudication application.
Where a claimant decides to proceed directly to Court for judgment, the provisions of BCISPA prevent the respondent from raising any counterclaim against the claimant or any defence in relation to matters arising under the construction contract.
Alternatively, where a respondent is adjudicated to be liable for an adjudicated amount and fails to pay that amount by the date stipulated in the adjudication, then the claimant can request a certificate from the adjudicator. This adjudication certificate may then be filed as a judgment for a debt and may be enforced in a court of competent jurisdiction.
Can an adjudicated decision be set aside?
Once an adjudicated decision has been obtained it can be registered in a court. It then becomes a judgment debt. The Respondent may apply to have a judgment debt set aside, however, they are unable to raise the following:
1 any counterclaim against the Claimant;
2 any defence in relation to matters arising under the contract; or
3 challenge the Adjudicator’s decision.
What are the relevant time frames?
Refer to our BCISPA flow chart here for a summary of the time frames.