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Security of Payment Laws in SA - Adjudication under the Building and Construction Industry Security of Payment Act 2009 (the "Act")

September 17, 2019

In this article, we will look at adjudication and how it fits into the Security of Payment claim process.

What is Adjudication?

The adjudication process involves the appointment of an independent adjudicator who has powers under the Act to determine the amount of progress payments to be paid by the respondent (if any), when it is paid, whether any interest is owing and who pays the cost of the adjudication.  A claimant can apply for adjudication of a payment claim if they are dissatisfied with the respondent’s payment schedule, the respondent fails to pay the full amount claimed or if they fail to provide a payment schedule. 

Tip: members should note that adjudication is designed to be a rapid process of resolving payment disputes in the construction industry. As such, the determinations are made on an interim basis.

How do I initiate adjudication?

Whilst the Small Business Commissioner South Australia has taken over the responsibility of the Act, disputed claims for payment under the Act are still managed through Authorised Nominating Authorities (ANA's).  What this means is that a claimant must make contact with any of the approved ANA's who will then appoint an adjudicator to adjudicate the payment dispute. The Small Business Commissioner website contains a list of ANA's approved by the Minister for Small Business.

What happens after an adjudicator is appointed?

It is important to remember that an adjudicator has a limited amount of time in which they have to make a decision. It is therefore useful if the application contains a written summary of the claim as well as written submissions that are relevant to the claim.  If the respondent has provided a payment schedule to the claimant within the time-frame under the Act, the respondent would be entitled to make written submissions in response. The respondent cannot include the reasons for withholding payment under a payment claim unless those reasons were provided and included in the payment schedule.  Adjudicators are required to provide determinations in writing including the reasons for the determination. A respondent is required to pay an adjudicated amount within 5 business days after the adjudicators determination has been served, or at a later date as determined by the adjudicator.  If the respondent fails to pay, the claimant may enforce the payment as a judgement for a debt in court.

For more information, contact Workplace Services on 1300 650 620.