Making Payment Claims Under BIFA

Introduction to Making Payment Claims under BIFA

In Queensland’s construction industry, getting paid for your work shouldn’t be complicated or risky. Thanks to the Building Industry Fairness (Security of Payment) Act 2017 (BIFA), there’s a structured, legally enforceable process. If you’re wondering about making a payment claim under BIFA this guide will walk you through the essentials to secure your payments.

Understanding the Building Industry Fairness (Security of Payment) Act 2017 

Purpose and Evolution from BCIPA

BIFA replaced the former Building and Construction Industry Payments Act 2004 (BCIPA). The main goal was to simplify and streamline payment processes for contractors, subcontractors, suppliers, and consultants, ensuring cash flow within the construction sector.

Key Definitions under BIFA

• Progress Payment: Payment for work completed to date.

• Reference Date: A date that triggers entitlement to a progress payment.

• Payment Claim: A formal request for payment under BIFA.

Who Can Make a Payment Claim under BIFA?

Eligible Parties for Payment Claims

You can make a claim if you:

• Carry out construction work.

• Supply related goods and services.

• Are a subcontractor, head contractor, supplier, or consultant.

Contracts Covered under BIFA

BIFA relates to payments under a construction contract. Construction contracts (whether written or oral, or partly written and partly oral) are defined as:

'a contract, agreement or other arrangement under which 1 party undertakes to carry out construction work for, or to supply related goods and services to, another party.'

The Right to Progress Payments

What Constitutes a Progress Payment

Section 70 of BIFA outlines that 'From each reference date under a construction contract, a person is entitled to a progress payment if the person has carried out construction work, or supplied related goods and services, under the contract.'

Section 67 of BIFA, defines a reference date as:

'(1) A "reference date", for a construction contract, means—

(a) a date stated in, or worked out under, the contract as the date on which a claim for a progress payment may be made for construction work carried out, or related goods and services supplied, under the contract; or

(b) if the contract does not provide for the matter—

(i) the last day of the month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract; and

(ii) the last day of each later month.

(2) However, if a construction contract is terminated and the contract does not provide for, or purports to prevent, a reference date surviving beyond termination, the final reference date for the contract is the date the contract is terminated.'

Steps to Making a Valid Payment Claim

Essential Information to Include

Pursuant to section 68 of BIFA, a payment claim must:

• Identify the construction work or related goods and services; and
• State the amount (the claimed amount) of the progress payment that the claimant claims; and
• Request payment of the claimed amount; and
• Include the other information prescribed by regulation.

Timing and Deadlines

Under section 75 of BIFA, a claim must be served:

Unless the payment claim relates to a final payment, the claim must be given before the end of whichever of the following periods is the longest—

1. the period, if any, worked out under the construction contract;
2. the period of 6 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied.

If the payment claim relates to a final payment, the claim must be given before the end of whichever of the following periods is the longest—

1. the period, if any, worked out under the relevant construction contract;
2. 28 days after the end of the last defects liability period for the construction contract;
3. 6 months after the completion of all construction work to be carried out under the construction contract;
4. 6 months after the complete supply of related goods and services to be supplied under the construction contract.

Service Requirements

Section 102 of BIFA states that:

1. 'A notice or other document that, under this chapter, is authorised or required to be given to a person may be given to the person in the way, if any, provided under the relevant construction contract. Example— A contract may allow for the service of notices by email.
2. Subsection (1) is in addition to, and does not limit or exclude, the Acts Interpretation Act 1954, section 39 or the provisions of any other law about the giving of notices.
3.  To remove any doubt, it is declared that nothing in this Act—
   
   (a) excludes the proper service of notices or documents by a person’s agent; or
   
   (b) requires a person’s acknowledgement of a notice or document properly given to the person.'

This means that proper service methods may include (subject to the contract):

• Delivering in person.

• Sending via post to the business address.

• Electronic methods agreed upon in the contract.

Payment Schedules: What Happens After a Claim is Made

Respondent’s Obligations and Timeframes

Section 77 of BIFA outlines that:

1. This section applies if a respondent given a payment claim does not respond to the claim by giving the claimant a payment schedule as required under section 76 .
2. The respondent is liable to pay the amount claimed under the payment claim to the claimant on the due date for the progress payment to which the payment claim relates.

Section 76 of BIFA stipulates that the respondent must issue a payment schedule:

• Within 15 business days.

• Or the shorter period specified in the contract.

Consequences of Not Responding with a Payment Schedule

If no schedule is provided, you may recover the claimed amount as a debt through court or adjudication application.

Dealing with Non-Payment

Options for Recovery

You can:

• Pursue adjudication.

• Initiate court proceedings.

Initiating Legal Action

Before court action, you must issue a notice of intention to sue, allowing five business days for the respondent to respond.

BIFA Adjudication Process Explained

Filing a BIFA Adjudication Application

If a dispute arises:

• Apply within 30 business days after a payment schedule is due but not provided.

• Or within 10 business days after receiving a disputed payment schedule.

Adjudication Certificate and Enforcement

After a decision, you can obtain an adjudication certificate and register it as a judgment debt in court.

Strict Time Limits and Why They Matter

BIFA imposes tight deadlines at every step. Missing any timeframe can result in losing your right to claim payments. Timely action ensures legal protection of your entitlements.

Case law such as Galaxy Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd t/a CCA Winslow & Ors [2020] QSC 51 helps interpret tricky aspects of service and timing.

Common Mistakes When Making a Payment Claim

How to Avoid Costly Errors

• Failing to properly identify the work done.

• Serving claims outside permitted timeframes.

• Not issuing the correct notices before starting legal action.

Why Engage Odyssey Legal for Your Payment Claim?

At Odyssey Legal, we are seasoned experts in building and construction disputes. We ensure that your payment claims are accurate, timely, and enforceable. With our proactive approach, we help protect your cash flow and business reputation.

Navigating the intricacies of making payment claims under BIFA doesn’t have to be overwhelming. With the right legal guidance, you can confidently pursue your payments and safeguard your financial interests.

 Schedule Your Free Consultation

Ready to secure what you’re owed? Contact Odyssey Legal for a free consultation with our building and construction experts. We'll assess your situation and guide you through the process with clarity and confidence.

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Frequently Asked Questions About BIFA Payment Claims

1. What are the payment terms under BIFA?
Payment must be made within 15 business days of a claim or as stated in the contract.

3. How do you serve a payment claim under BIFA?
You can serve it personally, by post, or electronically, depending on the agreed method.

4. What happens after a payment claim is served?
The respondent must provide a payment schedule or risk facing debt recovery actions.

5. What is a BIFA adjudication?
A streamlined dispute resolution process where an independent adjudicator decides the outcome.

6. What should I do if no payment schedule is received?
You can apply for adjudication or file court proceedings (as long as notice is issued) to recover the unpaid amount.

7. Who is eligible to make a BIFA payment claim?
Any party performing construction work or supplying related goods and services under a construction contract.