Legal Update – Changes to Queensland Progress Payments Legislation

17 SEPTEMBER 2014

On 11 September 2014, the Queensland State Parliament passed amending legislation in relation to the widely anticipated changes to the Building and Construction Industry Payments Act 2004 (Qld) (“the Act”).  The changes will not take effect until formal approval has been granted by the Governor-General, but this can be expected before the end of the year.

Key changes introduced by the new laws include:

1. Claimant no longer chooses Authorised Nominating Authority for the appointment of an Adjudicator.  The Queensland Building and Construction Commission (QBCC) will assume responsibility for registering and appointing Adjudicators.  This will replace the current system in which the claimant chooses an Authorised Nominating Authority who refers the matter to an Adjudicator whom they deem appropriate;

2. Extended Timeframes for Complex Matters. There is to be a dual model regime which classifies claims as either “standard” or “complex”. So-called “complex payment claims” are payment claims for more than $750,000 (or higher where prescribed by the regulations);

3. Reduced Timeframes for Payment Claims. The time for when payment claims can be made is to be reduced from 12 months to 6 months from the time the relevant construction work was last carried out or the related goods and services were last supplied (subject to any longer period of time provided for in the contract); and

4. Increased Protection for Respondents. Respondents will now be permitted to include in their adjudication response (the formal response to the claimant’s adjudication application) new reasons for withholding payment that were not included in the payment schedule for complex payment claims.  This will replace the current system which precludes respondents from raising new arguments in this way at a later time. Claimants are given a right of reply to the new reasons, being up to 15 business days and subject to an extension of time in certain circumstances of up to an additional 15 business days. Provision has also been made in the new laws for longer time periods for Respondents to serve payment schedules in certain circumstances.

For applicable contracts entered into before the commencement of the new laws, some of the main processes set out in the Act for seeking progress payments will continue to apply (for example, payment claims and payment schedules). However, those contracts will be subject to the new laws regarding the process for appointment of Adjudicators by the QBCC.

The changes to the laws in this area are significant and we encourage principals and contractors alike to familiarise themselves with the changes and the effect of them on their current and anticipated future arrangements.

We would be pleased to advise you further in relation to the new laws and will provide an update to this article once the new laws commence.

Contact Partner: Michael Coe
Direct Telephone : 07 3210 5709
Mobile Telephone : 0408 983 876
michael.coe@kinneallymiley.com.au

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