No Payment Schedule Recieved?

The Payment Chain: Security of Payment in Queensland — Part 2

By Damon Laffin, Director

What This Article Covers

When a respondent fails to serve a payment schedule after receiving a valid payment claim, specific and significant consequences follow under Queensland's Building Industry Fairness (Security of Payment) Act 2017 (Act). This article explains what crystallises, what options the claimant has, and the strict deadlines that must be met to preserve those options.

This is Part 2 of The Payment Chain series. Part 1 covered what makes a payment claim valid under section 68 of the Act.

What the Respondent Was Required to Do

Under section 76 of the Act, a respondent who receives a payment claim must serve a payment schedule within whichever of the following periods ends first: the period specified in the construction contract, or 15 business days after the payment claim was served.

Under section 69 of the Act, a payment schedule must identify the payment claim it responds to, state the amount the respondent proposes to pay (which can be zero), and — if that amount is less than the amount claimed — state why, including the reasons for withholding payment.

Silence is not a valid response. A failure to give a payment schedule is an offence under section 76(1) of the Act (maximum penalty: 100 penalty units) and grounds for disciplinary action under the Queensland Building and Construction Commission Act 1991 (Qld).

What Crystallises When No Schedule Arrives

Under section 77 of the Act, if the respondent does not serve a payment schedule as required, they become liable to pay the full amount claimed on the due date for the progress payment.

This is a statutory liability for the full claimed amount. The respondent cannot, at this point, raise defences based on the contract, assert that the work was defective, or put forward reasons for withholding payment that they failed to include in a payment schedule.

Your Three Options Under Section 78

Under section 78 of the Act, where the respondent has not paid the amount owed by the due date, the claimant may:

Recover the debt in Court: The unpaid amount may be recovered as a statutory debt in a court of competent jurisdiction. Because liability has crystallised under section 77, the respondent is significantly constrained in what defences they can raise. Summary judgment is a realistic option in many cases. This path suits claimants who need a court judgment to support enforcement steps such as a statutory demand or winding up application.

Apply for adjudication: The claimant may apply for adjudication of the payment claim under Part 4 of the Act. Where the respondent failed to serve a payment schedule, they are also prevented from lodging an adjudication response. The adjudicator can only consider the payment claim and the claimant's submissions.

Suspend work: In addition to either of the above, the claimant may give written notice of intention to suspend carrying out construction work or supplying related goods and services under the contract. Under sections 78(3) and (4) of the Act, the notice must state it is made under the Act, and at least two business days must pass before suspension commences. Suspension in these circumstances is not repudiation and cannot be used by the respondent as grounds for terminating the contract.

The Deadlines That Cannot Be Missed

Under section 79(2) of the Act, the following adjudication deadlines apply:

Where the respondent failed to give a payment schedule and failed to pay the full claimed amount, the adjudication application must be made within 30 business days after the later of:

• the due date for the progress payment; or
• the last day the respondent could have given the payment schedule under section 76.

Where the respondent served a payment schedule but failed to pay the scheduled amount by the due date, the application must be made within 20 business days after the due date for payment.

Where the respondent served a payment schedule proposing less than the claimed amount, the application must be made within 30 business days after the payment schedule was received.

These deadlines are calculated in business days. Queensland public holidays must be excluded. Missing the deadline by a single day closes off the adjudication pathway entirely.

What the Respondent Cannot Do

A respondent who failed to serve a payment schedule cannot lodge an adjudication response. The Act does not permit the adjudicator to consider submissions from a respondent in that position.

In Court proceedings, the respondent faces a statutory debt crystallised under section 77. The merits of the underlying dispute, defective work, legitimate set-offs, contractual entitlements, are not available defences to the statutory debt, though they may be raised in separate proceedings.

What to Do When No Payment Schedule Arrives

If the deadline for a payment schedule passes without one being served:

Identify the due date for the progress payment under the contract. Under section 73 of the Act, if the contract does not specify a due date, payment is due 10 business days after the payment claim was given to the respondent.

Calculate the last day the respondent could have served a payment schedule and the due date for payment. The 30 business day window runs from the later of those two dates.

Decide which pathway suits your circumstances court proceedings or adjudication.

If you intend to suspend work, give written notice under section 78(3) of the Act and wait the required two business days before suspending.

Do not wait to see whether payment arrives informally. The deadline runs regardless of ongoing negotiations or promises to pay.

Next in the Series

Part 3 covers retention money and project trust accounts, when trust account obligations are triggered, what the Act protects, and what to do when retention is withheld without justification.

Act Before the Deadline Closes

If a payment schedule has not arrived, the clock is already running. Odyssey Legal acts for builders, subcontractors, and suppliers across Queensland in security of payment disputes, adjudication proceedings, and BIF Act enforcement.

Phone: (07) 5370 8759

Email: info@odysseylegal.com.au

Online: odysseylegal.com.au/contact

Frequently Asked Questions

What if the respondent serves a payment schedule after the deadline? A late payment schedule has no effect under the BIF Act. The consequences of section 77 have already crystallised. The claimant's options under section 78 remain available.

Can the respondent raise a defence about the quality of the work? Not in the context of the statutory debt under section 77. Those arguments may be available in separate court proceedings, but they cannot be used to resist enforcement of the crystallised debt or to participate in adjudication where no payment schedule was served.

Does suspending work affect my right to adjudicate? No. Suspension under section 78(3) is a separate right that can be exercised alongside an adjudication application or court proceedings.

What if I miss the 30 business day deadline for adjudication? The BIF Act adjudication pathway is closed. The underlying contractual debt may still be recoverable through ordinary court proceedings, but the speed and cost advantages of the statutory regime are lost.

How is the due date for payment calculated if the contract is silent? Under section 73 of the BIF Act, payment is due 10 business days after the payment claim was given to the respondent.