Security of Payment Laws in South Australia
June 03, 2019
Keep an eye out for payment claims
A payment claim must state that it is a payment claim under the Act. A statement with words to the effect of “this claim is made pursuant to the Building and Construction Industry Security of Payment Act 2009” should appear somewhere on the payment claim.
The Act provides the respondent (person who the claim is against) with a very short time frame to deal with a claim. For this reason, it is imperative that you have systems in place to ensure that any payment claims are promptly brought to the attention of the right person in your business who can deal with it.
Determine your response
If you receive a payment claim, you need to decide whether you’ll pay the claim in full or dispute all or part of the claim. If you dispute the claim, you will need to provide the claimant with a payment schedule. A payment schedule is a written statement that indicates how much you are willing to pay the claimant and the reasons why you are withholding any part of the claim. Your reasons for withholding payment should be sufficient to enable the claimant to understand why you are withholding payment.
You may have several reasons to withhold payment that applies to the same item. If that is the case, you should include them all because if you don’t include the reasons in your payment schedule, but raise it later in an adjudication, you may not be able to rely on it.
If you do not intend to pay the full amount claimed, for each item in the claim, you should set out-:
• the amount that is agreed (if any);
• the amount that is not agreed; and
• your reasons as to why you do not agree to pay the amount claimed, or part of the amount claimed.
The payment schedule must be served within the time required by the construction contract or within 15 business days after the payment claim has been served, whichever time expires earlier.
If you fail to provide a payment schedule within time or fail to provide a payment schedule at all then the claimant may be entitled to the full amount of the claim as they are able to enforce payment as a debt due in court or make an adjudication application.
In both of these scenarios, the respondent may be unable to raise a defence or file a cross claim.
For further information please contact the SAWorkplace Adviser, Huan Do.