NSW ADJUDICATION

Adjudication NSW

Adjudication in NSW is the dispute resolution process within the The NSW Building and Construction Industry Security of Payment Act 1999 (the Act) which applies to construction work and/or related goods and services carried out in NSW.  Be mindful of the following:

Canberra does not come under the NSW Act;and

'Cross state legislation' which is where you may be a Claimant in NSW but the construction work or related goods and services was carried out in another State.

Amendments made in 2011 now allow claimants who have made an adjudication application, require a principal contractor retain sufficient money to cover the claimed amount out of money that is or due to become payable to the respondent.  Read more NSW Procurement

What is construction work and related goods and services?

What is Construction work under the Act

What are related goods and services under the Act

What is NOT covered by the Act

 

Amendments applicable to contracts entered into after 21st April 2014

Section 11 - Due Date for Payment:

Head contractors are now entitled to receive payment from the principal no later than 15 business days after the submission of a payment.

Head contractors must make progress payments to subcontractors no later than 30 business days after receipt of a payment claim.

A contract cannot include payment terms longer than the maximum payment period.

Therefore, under the pre April 2014 provisions payment was due on the date in accordance with the contract, but if the contract was silent to the due day for payment than it was the date occuring 10 business days after receipt of a payment claim.

This means longer payment provisions for both head contractors and subcontractors.

Section 13 - Payment Claims

Requirement for supporting statement .  The new supporting statement requirements applies only to head contractors.  On submission of a payment claim to a principal, you must provide a supporting statement with a declaration that the subcontractors you have engaged have been paid what is due and payable.

Authorised officers from the Department of Finance and Services have powers to investigate compliance with the supporting statement and penalties of non-compliance can be up to $22,000 and/or 3 months imprisonment.

Removal of Endorsement .  When you issue a payment claim you are no longer required to include a statement that the claim is made under the Act.  BE AWARE of any invoices/payment claims that have not been endorsed mean you still have to provide a payment schedule if you propose to pay less than the claimed amount.

There are 7 main documents involved in the process as follows:

  1. The Payment Claim - which is a tax invoice, progress claim, final claim, etc which is provided by the Claimant to the Respondent
  2. The Payment Schedule - is a response to the payment claim which is provided by the Respondent to the Claimant
  3. Section 17(2) Notice - is a notice which is provided by the Claimant to the Respondent if the Respondent does not provide the Claimant with a payment schedule
  4. Adjudication Application - is an application made to an ANA by the Claimant and is also served onto the Respondent in its entirety
  5. Payment Withholding Request & Statutory Declaration - require a principal contractor for the claim to retain sufficient money to cover the claim out of money that is or becomes payable by the principal contractor to the respondent
  6. Adjudication Response - is a response to the adjudication application and is made by the Respondent and is also served onto the Claimant in its entirety
  7. Adjudication Certificate  - an adjudication certificate is a sealed document produced by the ANA at the written request of the Claimant if the Respondent does not pay the adjudicated amount for the purposes of debt recovery through the court.

*** PROFORMAS CAN BE FOUND HERE TO ASSIST THE PARTIES IN ADJUDICATION ***

 Step by step guides can be found here:

  It is important to know who you are dealing with so do your homework.  Here are some helpful guidelines

 

Who are you working for?  You may think you are working for Fred Bloggs from ABC Electrical, so you address your invoices to ABC Electrical.  When ABC Electrical fails to pay you lodge an adjudication application and you are successful in your application, when ABC Electrical does not pay, you request an Adjudication Certificate.  The adjudication certificate must state the name of the Respondent as per the determination and in this case it is ABC Electrical.  Upon lodging your certificate with the court to enforce judgment you find out there is no such entity as ABC Electrical as it is an unregistered trading name and the actual name of the company that you are dealing with is Fred Bloggs Electrical Pty Ltd.  So where does this lead you - nowhere.  Judgment cannot be enforced and you have to start from square one.

 

How can you find out who you are working for?  There are a multitude of documents you can review to ascertain who you are working for - the contract, a letter of intent, a purchase order, correspondence, ASIC , ABN Lookup and NSW Builders Licence Check .

 

 

 
 
 
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