Preparing for the 2023 security of payment season

29 November 2023

In the last 3 years, the construction industry has dealt with it all namely, increased interest rates, tighter controls on lending, labour shortages, increased costs of materials, building companies going in liquidation and a strain on the insurance market.

It is therefore unsurprising that contractors and subcontractors will likely rely on the security on payment regimes to get paid quickly to alleviate cash flow issues.

To help protect you during this busy security of payment period, we have:

  • set out the “business days” for each jurisdiction over the upcoming holiday period in Annexure A to H below; and
  • provided some tips for those operating in Victoria.

Business days over the holiday period

The timelines in the security of payment legislation are based on “business days” as defined in the respective security of payment legislation.

Each jurisdiction has defined “business days” differently. Therefore, it is important to check what day is a “business day” particularly when you are:

  • responding to a payment claim;
  • submitting an adjudication application; and/or
  • submitting an adjudication response.

If you don’t check what the relevant “business days” are for the State or Territory that you are operating in, you may run the risk of being time barred.

For ease of reference, we have set out the “business days” for:

  • Victoria (VIC) in Annexure A:
    • Victoria is the only jurisdiction that does not have a blackout period over the holiday period. Therefore, you may still make and/or receive adjudication applications during the holiday period.
  • Australian Capital Territory (ACT) in Annexure B:
    • ACT’s blackout period includes 27, 28, 29, 30 and 31 December 2023.
  • New South Wales (NSW) in Annexure C:
    • NSW’s blackout period includes 27, 28, 29, 30 and 31 December 2023.
  • Northern Territory (NT) in Annexure D:
    • Northern Territory has a blackout period over the holiday period. This period commences on 25 December 2023 and ends on 7 January 2024.
  • Queensland (QLD) in Annexure E:
    • QLD’s blackout period includes 22 to 24 December 2023, 27 to 31 December 2023, and 2 to 10 January 2024.
  • South Australia (SA) in in Annexure F:
    • SA’s blackout period includes 27, 28, 29, 30 and 31 December 2023.
  • Tasmania (TAS) in Annexure G:
    • TAS’ blackout period includes 27, 28, 29, 30 and 31 December 2023.
  • Western Australia (WA) in Annexure H:
    • Western Australia has a blackout period over the holiday period. This period commences on 22 December 2023 and ends on 10 January 2024.

Click here to view Annexures A-H.

Practical tips to consider in Victoria

Some warnings to remember:

  • Be careful and confirm that the deadline for submitting payment schedules in the contract is not earlier than you think.
    • For example, the Building and Construction Industry Security of Payment Act (Vic) 2002 (SOP Act) requires a payment schedule within the earlier of 10 business days of the payment claim or as set out in the contract. If your contract requires a response based on calendar days or has a different definition of “business day”, the deadline may be earlier than you think.
    • For example, 14 calendar days can be significantly earlier than 10 business days – especially over the holiday period.
  • A payment claim can only be served on or after the “reference date”. This is the date for submitting payment claims under the contract (or every 20 business days if the contract is silent). If a Claimant serves a payment claim before the reference date, then it will be invalid and cannot be relied upon.
    • For example, a payment claim submitted on Friday 22 December 2023 before the Claimant’s office closes will be invalid if the contract requires payment claims to be submitted on or after the 25th day of each month.
  • Many contracts state that a deadline that falls on a non-business day may be extended until the following business day. If it is served prior to that later date, then it would be invalid.
    • For example, a payment claim that would otherwise be due on 25 December may not have a “reference date” until 27 December.

This article was written by Leighton Moon, Partner, Paul Graham, Partner, Tara Nelson, Senior Associate, and Fin Neaves, Associate.

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