Received a Payment Schedule? What are your options.
Once a Payment Claim has been served by a Claimant on the Respondent under the Building and Construction Security of Payment Act 2002 (Vic) (“SOP Act”), what is the next step? The answer to this question will turn on the particular circumstances of the case.
In this article, we will focus on the circumstance where the Respondent has replied to the Payment Claim with a Payment Schedule.
In other words, we will focus on this scenario:
"The Claimant has submitted a Payment Claim under the SOP Act and in reply, the Respondent has provided a Payment Schedule to the Claimant."
From here, the Claimant may either elect to accept the amount proposed to be paid by the Respondent (“Scheduled Amount”), or the Claimant may not accept the Scheduled Amount.
Option 1: The Claimant accepts the Scheduled Amount
Where the Claimant is satisfied with the Scheduled Amount, payment of the same is to be made by the Respondent on or before the due date for the progress payment to which the Payment Claim relates.
If payment is made, no further action is required on the part of the Claimant.
However, if payment of the Scheduled Amount is not made by the Respondent on or before the due date, the Claimant may:
recover the unpaid portion of the Scheduled Amount from the Respondent, as a debt due to the Claimant, in any court of competent jurisdiction; or
make an Adjudication Application in relation to the Payment Claim.
In addition to the above, or alternatively, the Claimant may suspend the carrying out of the construction work under the construction contract or the supplying of related goods and services under the construction contract, but only after at least 3 business days have passed since the Claimant caused a notice of intention to do so to be given to the Respondent.
For more information on suspending the work using the provisions of the SOP Act, please click here for an article we have previously prepared on point.
Option 2: The Scheduled Amount is less than the Claimed Amount in the Payment Claim and you do not accept the reasons why.
If the Scheduled Amount indicated in the Payment Schedule is less than the Claimed Amount indicated in the Payment Claim, the Claimant may apply for adjudication of the Payment Claim.
Such an Adjudication Application must be made within 10 business days after the Claimant receives the Payment Schedule.
Accordingly, the Claimant must promptly make a decision as to whether it accepts or does not accept the Scheduled Amount proposed by the Respondent to be paid in the Payment Schedule.
For the purposes of this article, we will not explore the Adjudication Application procedure, save to say the Respondent has an opportunity to give a reply by way of an Adjudication Response.
If you wish to discuss your options following receipt of a Payment Schedule, or how to prepare a Payment Schedule in response to a Payment Claim, please do not hesitate to contact Perry Thomas Lawyers on 03 8375 9638.