Preparing for the 2024 security of payment season 

Contractors and subcontractors may seek to rely on the security of payment regimes to get paid quickly to alleviate cash flow issues throughout the holiday period.

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

1. set out the “business days” for each jurisdiction over the upcoming holiday period in Annexure A to H. Click here to access this resource; and
2. provided some tips for those operating in Victoria.

As it stands, Victoria does not have a “blackout period” over the holiday period. However, the Victorian Government supports in full the recommendation (amongst others) to amend the legislation so that a business day excludes the period between 22 December to 10 January inclusive. This is yet to be implemented.

Business days over the holiday period

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

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

1. responding to a payment claim;
2. submitting an adjudication application; and/or
3. 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:

1. 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.
   The Victorian Government supports the introduction of a “black out” period between 22 December to 10 January each year. However, this is yet to come into effect.
2. Australian Capital Territory (ACT) in Annexure B:
   The blackout period includes 27, 28, 29, 30 and 31 December 2024.
3. New South Wales (NSW) in Annexure C:
   The blackout period includes 27, 28, 29, 30 and 31 December 2024.
4. Northern Territory (NT) in Annexure D: 
   The blackout period commences on 25 December 2024 and ends on 7 January 2025.
5. Queensland (QLD) in Annexure E: 
   The blackout period includes 22 to 24 December 2024, 27 to 31 December 2024, and 2 to 10 January 2025.
6. South Australia (SA) in in Annexure F: 
   The blackout period includes 27, 28, 29, 30 and 31 December 2024.
7. Tasmania (TAS) in Annexure G:
   The blackout period includes 27, 28, 29, 30 and 31 December 2024.
8. Western Australia (WA) in Annexure H:
   The blackout period commences on 22 December 2024 and ends on 10 January 2025.

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 20 December 2024 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.

HWL Ebsworth Lawyers has expertise in advising on the above- mentioned matters. Please contact Leighton Moon, Paul Graham, Tara Nelson or Fin Neaves of our Construction and Infrastructure team to discuss any issues relating to security of payment.

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