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Strict procedures must be followed in order for a contractor or builder to recover unpaid monies or to defend a claim. The information below provides an overview of the new SOP laws in the ACT and how they can potentially affect HIA members.
You are entitled to claim for:
These laws allow you to make a progress claim and to receive a progress payment. There is an implied right given to make progress claims where a contract does not make adequate provision. If you make a claim you can seek payment of any unpaid amount by adjudication.
It is a process set up under these laws where an independent adjudicator will decide on the amount that is payable. Adjudication is a quick method to obtain a decision and is an alternative to taking court action. An adjudicator’s decision can be enforced as a judgement.
When you are entitled to make a progress claim, you give a payment claim to your client/principal (the respondent). Your claim must:
To make a claim you must:
After you have given the respondent your payment claim, ONE of three things can happen:
Within 10 business days of receiving your claim, the respondent may give you a written statement of the amount it is prepared to pay, with the reasons for not paying the difference. This is known as a ‘payment schedule’ and the amount that the respondent is prepared to pay is known as the ‘scheduled amount’.
If you are given a payment schedule, you may:
The respondent is limited in any adjudication from raising any defence not set out in the payment schedule.
If the respondent gives you a payment schedule stating the amount they are prepared to pay, they must pay that amount before the due date to which the payment relates. If they don’t, you can:
Also, if the respondent does not pay you the scheduled amount (as above) they will not be allowed to bring any cross-claim against you or to raise any defence in any legal proceedings that you bring about against them. (However, this restriction will not apply in adjudication.)
If the respondent does not pay the full payment claim or does not give you a payment schedule within 10 business days after you have given them your written claim, you can suspend the works after giving the respondent notice and you will be able to hold onto any unfixed plant and materials supplied by you to the respondent.
You will also be able to commence legal proceedings in court to recover the full amount claimed by you as a debt or go to adjudication (see below).
If the respondent does not pay the full amount or give you a payment schedule they will not be allowed to bring any cross-claim against you or raise any defence in any legal proceedings that you bring about against them. (However, this restriction will not apply in adjudication.)
Where there is no payment schedule, then before an adjudication application is made here, you must give the respondent a written notice telling them that you intend to apply for adjudication of the payment claim and they have five business days to provide you with a payment schedule. If after notice is given to the respondent you have not received a payment schedule from the respondent with five business days, you can then apply for adjudication.
Note: Keep all written notices
Evidence of all written notices sent and received should be kept. This may include confirmation reports, registered mail receipts etc., as well as the original notices sent to the respondent.
You can ask the body that appointed the adjudicator to give you an adjudication certificate. This certificate can be filed in the appropriate court as a judgment. You must support the certificate with an affidavit stating that the adjudicated amount is still outstanding.
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