Industries & Occupations

Frequently asked questions - Making a Claim

Who can make claims under the Act?

Those who can make a claim under the Act include:

Builders and other contractors against residential owners
Contractors against principals / developers
Subcontractors against contractors
Suppliers against customers
Plant and equipment hirers against clients
Consultants against clients

Building and construction work and services can be claimed under the Act, even if the contract:

is not written
does not provide for progress payments
has only a single payment to be made when the work is completed.

How do I make a claim?

Your claim must:

be made at the time stated in your contract or, if there is no time stated, on the last day of the month
be in writing and addressed to the respondent
describe the building or construction work, related goods or related services for which you are claiming
state the amount that you claim is due, include the words This is a payment claim made under the Building and Construction Industry Security of Payment Act 2009, or a similar statement with that meaning, and
refer to work performed under a building or construction contract made on or after 17 December 2009 and refer to work performed within the past 12 months or such longer period as specified by contract.

The claim may also include attachments containing:

statements detailing the extent of the work completed
completion certificates
delivery dockets
photographs, and
other applicable contract document requirements.

To make a claim you must:

establish the reference date for your claim
decide how much you are entitled to be paid calculated to the reference date
on or after each reference date make a written payment claim and serve it on the party liable to make payment (the respondent). The claim will usually be a Tax Invoice
serve the claim by delivering, posting or faxing it to the respondent. The contract may provide for other methods of service, and
record the date of service (the date that the respondent receives the claim).

What can I claim for?

You can make a claim on the respondent for:

building or construction work you have done
building or construction materials or plant you have provided
consulting services you have provided
interest on overdue progress payments
your losses and additional expenses due to work being deleted from your contract after you suspended work under the protection of the Act
cash security and retention monies, and
at the end of the contract, a claim under the Act can be made for the final payment

However, claims under the Act are claims for the interim payments, pending the resolution of your final entitlement under the contract. In separate proceedings, initiated by the respondent, it may be decided that amounts recovered by way of progress payments under the Act are more or less than the final entitlement and you may end up having to refund money, or forgo being paid extra.

In cases where you are inclined to pursue a claim through expert determination, arbitration or litigation, it will still be worthwhile to pursue a payment claim under the Act before, or in parallel, with this other proceeding. This may help you receive an interim payment under the Act while you are waiting for the final determination of the other proceeding.

Does the Act apply to residential homeowners?

Yes - The Act does apply to contracts with residential homeowners who live in, or intend to live in, the dwelling where the work is being carried out.

Can I resubmit a claim?

Only one claim can be made under the Act for each reference date. The reference date is either the date stated in the contract for making claims or, if there is no date, it is the last day of each month.

However, if you have already made a payment claim but not under the Act, you are still entitled to then make a claim for the same reference date. For example, a claimants first attempt to obtain payment is likely to be using a standard invoice, after not being paid within a reasonable period of time the claimant may decide to send a claim using the claim format required under the Act. This provides the claimant with the option to refer the matter for adjudication. If the respondent has not paid the full amount claimed, or has not issued a payment schedule following a claim the respondent can also take advantage of the option to suspend work or stop supplying building/construction material.

Moneys not paid in respect of a previous claim can be included in the next payment claim.

How long do I have to claim for payment?

Usually, claims under the Act cannot be made more than one year after the work was last carried out or the goods or services were last supplied. However, since the Building and Construction Security of Payment Act 2009 commenced on 17 December 2009, claims must be limited to matters that have occurred after that date.

When should I receive payment?

The date by which you are entitled to be paid in the 'due date for payment'.

If the contract provides a date or period for payment of claims, then you are entitled to be paid by then.

If the contracts does not provide due dates for payment, then you are entitled to be paid 10 business days (20 business days if the respondent is a residential home owner) after you serve the payment claim on the respondent.

If you are not paid by the due date, you have a right to interest at the greater of the rate, if any, in the contract or the rate on Supreme Court judgements.

A 'business day' under the Act is any day other than a Saturday, Sunday, or a statutory holiday as defined in the Statutory Holidays Act 2000.

How long do I have to wait for a response?

If the respondent is not willing to pay all that you have claimed, they have a maximum of 10 business days (20 business days if the respondent is a residential home owner) after you have submitted your claim to give you a payment schedule. This has to be a written statement of the amount that the respondent is willing to pay and the reasons for not paying any part of your claim.

If the respondent fails to serve you with a payment schedule before the end of that time, the Act requires the respondent to pay the whole amount of the payment claim.

What do I do if I get no response?

If by the 10th business day (20th in the case of a residential home owner) after you have issued a claim, you do not receive a payment schedule from the respondent or no payment, you have the option of taking action in court, or using the adjudication process to recover monies due to you.

If you propose to use adjudication, you must notify the respondent of this within 20 business days of the payment schedule being due (that is, within 30 business days of your issuing the claim - unless the respondent is a residential home owner, then it is 40 business days).
The respondent must be given a period of 5 business days within which to furnish a payment schedule to you. You may then make an application for adjudication (refer to the Applying for Adjudication section).
You may also suspend work if not paid within 2 business days of sending a notice to suspend.

What can I do if I disagree with a payment schedule?

If you receive a schedule that you disagree with, you may apply for adjudication (refer to the Applying for Adjudication section) within 10 business days of receiving the schedule.

Can parties contract out of the Act?

Parties cannot 'contract out' of the Building and Construction Industry Security of Payment Act 2009.
The Act makes invalid any contract provision that:
- Is contrary to the Act
- Purports to exclude, modify, restrict or otherwise change a provision of the Act
- May be construed as an attempt to deter a person from taking action under the Act.