Security of Payments

“ Online Registry NSW Supreme, District and Local Courts NSW Government ProcurePoint news on Security of Payment ”

“ District Court Civil (NSW) guide Local Court Civil (NSW) guide ”

“ Taking good instructions When receiving instructions from the client, the use of the precedent Retainer Instructions is a very useful risk management tool. It prevents overlooking important issues and records instructions which cannot be contradicted later. ”

“ In order to successfully claim and recover progress payments, strict procedures and timelines must be followed. A complying payment claim must be made in order to activate the payment process: s 13. People who can make a payment claim include: ”

“ As previously stated s 5 provides extensive examples of ‘construction work’ and ‘supply of related goods and services’, including the following: all building work such as brick laying, foundation work, carpentry and electrical; ”

“ A person who, under a construction contract, has undertaken to carry out construction work or to supply related goods and services is entitled to receive a progress payment: s 8. This entitlement is no longer triggered by a ‘reference date’, a term that has been abolished from the Act. Instead, the ... ”

“ Whilst the term ‘progress claim’ is used as a term of convenience in this commentary to denote a periodic claim made in respect of work performed under a contract, this expression is not used anywhere in the Act. In order for a ‘claim’ in respect of work performed under a contract to entitle a ... ”

“ A payment claim may be served on and from the last day of the named month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract and on and from the last day of each subsequent named month: s 13(1A). However, if the ... ”

“ The Act requires that a payment claim identify the construction work, or related goods and services, to which the progress payment relates, indicate the amount of the progress payment due, and state that it is made under the Act: s 13. Principals must pay amounts due under a construction contract ... ”

“ A claimant entitled to a progress payment must serve the payment claim on the respondent (being the legal entity with whom they contracted and who is liable to make the payment) in accordance with the approved methods of service set out in s 31. Unless the contract provides for a longer period, the ... ”

“ The due date for payment is determined in accordance with the terms of the contract. However the contract cannot stipulate a due date later than the due dates for payment set out under s 11(1A) and (1B). For example, if the contract states that payment is due 14 days after invoice then, upon ... ”

“ Where the respondent disputes the payment claim, they must prepare a payment schedule and serve it on the claimant: s 14. The respondent has 10 business days after the date of service of the payment claim, or a shorter period provided in the contract, to serve a payment schedule on the claimant. ... ”

“ Usually, a payment schedule is served by post addressed to the claimant’s ordinary place of business during business hours. Evidence of service, such as an express post tracking number, must be retained as proof of service. The payment schedule must be served on the claimant in accordance with s 31 ... ”

“ The consequences of failing to provide a schedule or failing to make all payments in a schedule are treated separately in s 15 and s 16. Note s 14(4) is above. Section 15(1) and (2) provides: 15CONSEQUENCES OF NOT PAYING CLAIMANT WHERE NO PAYMENT SCHEDULE ”

“ Where part payment is made, the claimed amount is to be reduced by the amount of the payment received. ”

“ Section 17(2) notice – Second chance for respondent to provide payment schedule This provides the respondent with a second opportunity to provide the claimant with a payment schedule, however within the shorter period of 5 business days. See the matter plan for an example s 17(2) notice. ”

“ Adjudication is a statutory function carried out by independent adjudicators; and is often preferred to court-based debt recovery, which, as outlined above, is available as an alternative means of recourse under s 15 and s 16. The maximum liability of an unsuccessful claimant is the amount of the ... ”

“ Section 17(1) proves that a claimant may apply for adjudication of a payment claim if: (a)the respondent provides a payment schedule under Division 1 but: ”

“ Where the respondent had provided a valid payment schedule, they may lodge with the adjudicator a response to the claimant’s adjudication application within 5 business days from receiving a copy of the adjudication application or 2 business days after receiving notice of an adjudicator’s acceptance ... ”

“ The adjudicator has 10 business days to determine the amount to be paid from after the date on which the respondent lodges the response, if the respondent is entitled to lodge an adjudication response under s 20; or, if a response is not lodged, the end of the period within which the respondent was ... ”

“ Consequences of not paying claimant adjudicated amount Section 24 of the Act sets out the conditions under which an adjudication certificate may be issued. ”

“ Once the adjudication certificate is registered as a judgment, the payment process under the Act is complete. If the respondent fails to pay the judgment debt in time, you will need to advise your client on the most appropriate methods of enforcement of the judgment debt including under the ... ”