What happens if I do not respond to a payment claim?

Under the NSW Security of Payment Act, if you do not serve a payment schedule within time, you become liable to pay the claimed amount on the due date. The claimant can then sue for it as a debt, and you are generally prevented from raising defences arising under the contract in those proceedings. Diarise every payment claim the day it arrives.

Can an adjudicator's determination be challenged?

Only in limited circumstances. The Supreme Court can set aside a determination for jurisdictional error or denial of procedural fairness, but it will not simply review whether the adjudicator got the merits right. The final contractual rights of the parties can still be litigated later, and an amount paid under a determination may be adjusted in that process.

Building & Construction Dispute Lawyers

Q: How long do owners have to claim for residential building defects?

Under the Home Building Act 1989 (NSW), proceedings for breach of the statutory warranties must generally be commenced within six years for a major defect and two years for other defects, measured from completion of the work. Other statutory or contractual claims may have different time limits.

In this practice area

Payment claims, adjudication, defects, variations, delay and termination disputes for builders, developers, contractors, subcontractors and owners.

What construction disputes involve

Construction projects bring together principals, head contractors, subcontractors, consultants, suppliers and financiers, each with their own contract and their own cash flow pressure. Disputes typically concern unpaid progress claims, variations, extensions of time and delay costs, liquidated damages, defective work, calls on bank guarantees and retention, and termination or takeover of the works.

Residential and strata projects add a further layer, with statutory warranties and duties that allow owners, and subsequent owners, to pursue builders and developers for defects.

The legal framework

The Building and Construction Industry Security of Payment Act 1999 (NSW) gives a person who carries out construction work or supplies related goods and services a statutory right to progress payments. A respondent who receives a payment claim must serve a payment schedule within the time required by the contract or 10 business days, whichever is earlier, stating the amount it proposes to pay and its reasons for withholding any amount. If no schedule is served, the claimant can recover the claimed amount as a debt. Disputed claims can be referred to adjudication, which runs on short statutory timeframes. The court's power to review an adjudicator's determination is limited, generally to jurisdictional error.

For residential building work, the Home Building Act 1989 (NSW) implies statutory warranties into contracts. Proceedings for breach must generally be commenced within six years for a major defect and two years for other defects, measured from completion. NSW building legislation also imposes a statutory duty of care on persons who carry out construction work to avoid economic loss caused by defects. Contractual claims for defects, delay and payment run alongside these statutory regimes. Larger disputes are heard in the Technology and Construction List of the NSW Supreme Court, while many home building disputes go to NCAT.

How these matters typically run

Security of payment matters move fast. A payment schedule served a day late, or reasons omitted from it, can decide the outcome. Adjudication responses are also due within tight windows, so the respondent's position must be prepared before the application arrives.

Final disputes about defects, variations and delay take longer and depend on expert evidence from building consultants, quantity surveyors and programming experts. Many construction contracts require notices, negotiation, expert determination or arbitration before litigation, and strict compliance with notice provisions can determine whether a claim survives.

How we act

We act for builders, developers, head contractors, subcontractors and owners. We prepare and respond to payment claims and adjudications, bring and resist challenges to determinations, and run defects and final account disputes through negotiation, expert determination, NCAT and the courts.

Building & Construction Disputes