Insights / December 21st, 2017

‘Tis the season to… serve a payment claim

Many construction businesses are now accustomed to giving and responding to payment claims under the Building and Construction Industry Security of Payment Act 2009 (SA) and understand they require prompt responses.

With the Christmas shut down upon us, however, those in the industry should be aware that payment claims can still be served whilst an office is closed.

Although many principals have no doubt ensured that their progress claims are made before the holiday closure period begins, payment claims under the Act can still be served during that period and may potentially be overlooked.

Whilst the time to put on a payment schedule under the Act does not run on public holidays or between 27 – 31 December, an unattended or low-staffed office means:

  1. payment claims served this week may go unnoticed or un-actioned before the break, particularly if the office is closed or closing. (Time will run on these claims up to Sunday, 24 December); and

  2. payment claims served during the holiday period may go entirely unnoticed, potentially wasting the additional days a principal gets to respond due to the holiday period. At worst, where an office is closed beyond 2 January, there may be little or no time to respond to a claim when the office re-opens and the claim is discovered.

Given the above, it is vital that principals ensure they have put adequate procedures and checks in place to ensure all payment claims are discovered promptly over the Christmas period.

What to do during the holiday closure period

In order to prevent payment claims going unnoticed this holiday season we recommend principals:

  1. review any active construction contracts to confirm the time frames for responding to claims (in case a time period shorter than 15 business days has been nominated);

  2. ensure someone is nominated to check the business’s office and registered office regularly for payment claims throughout the closure period (ensuring that mail slots and places such as under the office door are properly inspected);

  3. ensure that any office fax machines are functioning, have paper and are checked; and

  4. if the person checking for payment claims is unsure about a document they discover, make sure that they contact the relevant person and obtain legal advice if required.

If you have any questions about security for payment claims and responses, please do not hesitate to contact Andrew Bullock.