Payment

Security of Payment

A statutory route to being paid for work already done, without waiting for the whole job to be argued out. It is fast, it is strict, and silence is expensive.

General information, not legal advice. This page sets out how the law generally applies. It does not take account of your circumstances, and you should get advice about your own situation before acting on it. The official sources this page is written from are listed on it; where they differ from anything here, they are the authority.

Who this page is for

Two documents, and a clock that does not stop

This page is for two people. One is owed money for work already done and is tired of waiting. The other has just been served with a payment claim and is wondering whether it needs a reply, or whether it can be dealt with next month with the rest of the paperwork. It cannot.

The Security of Payment legislation exists because contractors and subcontractors cannot afford to fund a job while the parties argue about the last variation. It works by putting short statutory periods on both sides and by attaching real consequences to missing one. The trade-off is that the process punishes delay far more than it punishes a weak argument.

For the claimant, the risk is a claim that does not qualify. A document that looks like an invoice may not be a payment claim under the Act, and a claim that is not valid starts nothing. Getting the form right matters more here than almost anywhere else in construction law.

For the respondent, the risk is silence. A respondent who provides no payment schedule within the period the Act allows can become liable for the whole amount claimed and can lose the right to argue about the contract or to raise a cross-claim when the claimant comes to recover it. A reason for withholding that was left out of the schedule generally cannot be added later in the adjudication either.

How we help

What the work actually is

Checking whether the Act applies at all

Not every arrangement is a construction contract for the purposes of the Act, and not all work is construction work. Some contracts, including certain residential ones, are treated differently. That question is answered first, because everything else depends on it.

Preparing a payment claim that qualifies

Identifying the work and the reference date properly, stating the amount, and saying what the Act requires a claim to say. A claim that is defective in form is not a technicality — it is a claim that did not start the sequence, and the time may not come back.

Drafting a payment schedule that keeps your defences

The schedule has to identify the claim, state what is proposed to be paid and set out every reason for withholding. We draft it so that the reasons you may need later are actually in it, and we do that within the period the Act allows rather than after it.

Running or resisting an adjudication

Preparing the application or the adjudication response, assembling the material the adjudicator can consider, and advising on what happens next: recovery of an adjudicated amount as a debt, or the narrow and urgent grounds on which a determination can be challenged in court.

Questions

Questions people ask first

I sent an invoice and was not paid. Is that a payment claim?

Possibly not. A payment claim under the Act has to identify the construction work or related goods and services it relates to, state the amount claimed, and state that it is made under the Act. An ordinary invoice often does none of those things. If it is not a payment claim, no statutory period has begun and no adjudication is available on it. Our guide to what makes a payment claim valid goes through this.

A payment claim has arrived. What do I do today?

Write down the date it arrived and how it arrived, and treat the reply as urgent. The period for a payment schedule is short and it is counted from service. Get advice this week rather than next, and do not assume that a phone call, a partial payment or an email saying you dispute it is a payment schedule.

I missed the payment schedule. Is it over?

It is serious and it is not always the end. What is available depends on where in the sequence you are, on what the claimant does next, and on whether the claim itself was valid. Take the documents to a lawyer immediately rather than waiting to see what happens, because the options narrow at each further step.

How long do I have to apply for adjudication?

The Act fixes a period for each situation, and it is short. We do not publish the figure because it depends on the type of claim and on what has already happened, and a wrong number costs the right. The NSW Government’s page on applying for adjudication carries the current periods and is linked below.

Does an adjudication decide who is right about the contract?

No. Adjudication decides how much is payable on this progress claim, on the material before the adjudicator, quickly. The contractual rights of the parties can still be worked out afterwards in NCAT or a court, and the money can be adjusted then. Think of it as deciding who holds the cash in the meantime.

The adjudicator got it wrong. Can I appeal?

There is no general appeal on the merits. A determination can be challenged in court only on narrow grounds, and the timeframe for doing anything useful is very short because the adjudicated amount can be recovered as a debt in the meantime. If you want to challenge one, do it immediately rather than after the judgment is entered.

What to bring

In a payment dispute the documents and the dates decide it, and they decide it quickly.

The construction contract, or whatever stands in for it — a purchase order, a quote, an email exchange.
The payment claim or the payment schedule, and the date and manner it was served or received.
Every earlier claim and payment on the job, with dates.
Any variation instructions, approvals or rejections.
The correspondence about the amount in dispute.
Any notice of intention to suspend work, or any notice already given under the contract.
The next date in the matter, if an adjudication or proceedings are already on foot.