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Building & Construction News Alert: Building and Construction Industry Payments Amendment Bill 2014 - Expected changes plus some more

News Alert 30 May 2014

As announced by the Queensland Government in March this year, as a result of a review by Andrew Wallace, there were significant proposals for amendment to the Building and Construction Industry Payments Act 2004 (BCIPA).

The Building and Construction Industry Payments Amendment Bill 2014 (Bill) to effect these changes was introduced on 21 May 2014 and is expected to be passed by the middle of this year, with a commencement dated on 1 September 2014. All adjudication applications subsequent to that date will be under the new regime.

In summary there are some important changes to note:

Abolition of Authorised Nominated Authority

The Bill abolishes the concept of an authorised nominated authority. In its place, the Registrar of the Building and Construction Industry Payments Agency will appoint the appropriate adjudicators. Practically this will stop the practice of adjudicator shopping and cancel any perceived advantage of one authority over the other.

Important distinction between Complex and Standard Claims

A Complex Claim is a new concept to the Bill and is defined as any payment claim seeking payment of more than $750,000 or involves a latent condition, or is a time related cost under the contract. All other claims are defined as a Standard Claim.

Time changes for Standard and Complex Claims

There are not significant time changes in the various steps required for a Standard Claim, except that an adjudication response has an extra 5 business days to be delivered.

Conversely, for Complex Claims there are significant changes to time periods for the various steps under the Bill. There could be a maximum of over 24 weeks from the timing of any payment claim to the adjudication determination. This is a significant increase in time and comparing it to the Standard track there could be an additional 15 weeks added. It seems the minimum period for a Complex matter would be a period of 14 weeks. That is a significant change in the amount of time for these matters to be decided within. The extra time is added by a combination of time for various steps under the Bill and the flexibility of requesting extensions of time for adjudication responses, a new concept of a reply, as well as a longer period for adjudication decisions. A reply step has been added in to the process as a result of a provision allowing for a respondent to deal with matters not otherwise raised within its payment schedule. There are wide discretions provided to the adjudicator to hear and determine applications for extensions.

Claim timing shortened

Amendments to section 17 and the insertion of section 17A require all claims whether complex or standard that are not final payment claims, must be served under a period worked out under the contract or 6 months after work was last carried out.

Should the claim be a final payment claim, the claim must be served within the later of:

  • The period worked out under the contract.
  • 28 days after the end of the last defects liability period.
  • 6 months after completion of all construction work.

Judgment in Default

New provisions provide for further steps to be taken before a judgment can be entered requiring notice. Practically it is expected that this will see very few judgment applications.

Partial invalidity of Adjudication Decision

In order to give statutory recognition to the judgment of Justice Applegarth of the Supreme Court QLD in BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd (No.2), there is an amendment to section 100 of the BCIPA. Should any decision be challenged in a Court and be effected by jurisdictional error, the Court has to identify that part of the decision so effected and allow the other parts unaffected to remain binding. This is contrary to what has recently been settled by the Queensland Court of Appeal in the same case above on appeal. This will obviously put a further hurdle in front of any party seeking to challenge any adjudicators’ decision.

Business Day

Importantly the BCIPA is proposed to be amended so as to exclude any calculation of business day between 22 to 24 December, 27 to 31 December and 2 to 10 January. This lessens the possibility of ambush by a claimant over the holiday period.

We will watch this Amendment Bill as it progresses through parliament and will keep you updated.

Tony Mylne, Partner

News Alert 30 May 2014
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