The Queensland Government has passed important changes to the transitional arrangements in the Building and Construction Industry Payments Amendment Act 2014 (Amendment Act).

EXECUTIVE SUMMARY

The changes address concerns previously raised about the creation of a dual system for contracts entered into prior to the Amendment Act and those entered into afterwards. Under the new transitional arrangements the different timeframes and procedures for existing or new contracts will be quickly eliminated.

The Amendment Act is due to commence on a date set by Proclamation (which has not yet occurred).

Given the changes to broaden the application of the new definition of 'business day', which excludes any day occurring between 22 December until 10 January, it is likely the Amendment Act will commence before 22 December 2014 so the new shutdown period applies over the 2014 / 15 Christmas break.

The Amendment Act was passed on 11 September 2014 and introduced changes in relation to the recovery of progress payments and the adjudication process under the Building and Construction Industry Payments Act 2004 (Qld) (BCIP Act) as discussed in our previous alert available here.

ACT WILL APPLY TO ALL CONSTRUCTION CONTRACTS

On 26 November 2014, new transitional arrangements were introduced1 (Further Changes) so that the amended BCIP Act procedures will apply to all new payment claims, regardless of whether they relate to contracts created before or after the commencement of the Amendment Act. Limited transitional arrangements will apply for existing contracts in relation to payment claims already made and the time in which claimants can lodge a payment claim under the BCIP Act.

Previously, the amendments only applied to contracts entered into after the commencement of the Amendment Act (except for changes relating to Authorised Nominating Authorities (ANAs)).

KEY CHANGES

The key changes are outlined below.

EVENT

CHANGE
Application of new definition of 'business day' Applies to all payment claims (and any subsequent adjudication), regardless of whether the contract existed at the date of commencement.
Adjudication Application made to an ANA but not yet referred to an adjudicator The ANA must refer the application to an adjudicator registered with the Adjudication Registry (operating under the Queensland Building and Construction Commission).
Payment claim served on a respondent before commencement of the Amendment Act

A 'transitional version' of the unamended Act will apply.

The payment claims process under the unamended Act will continue to have effect but will include changes in relation to the:

  1. transfer of functions from ANAs to the Adjudication Registry, including appointment of adjudicators;
  2. process for lodging adjudication applications with the Adjudication Registry;
  3. new section 35B (withdrawal of an adjudication application);
  4. new section 100(4) (treatment of decisions affected by jurisdictional error); and
  5. new definition of business day.
Serving new payment claims under the BCIP Act for existing contracts The new procedures in the Amendment Act apply to all payment claims made after its commencement, regardless of when the contract was entered into.
Time for lodging new payment claims for existing contracts

Two transitional provisions apply for the first six months after the commencement of the Amendment Act.

  1. The new six month maximum period for serving the payment claim under section 17A(2)(b) or (3)(c) will be extended to twelve months.

This means that a claimant who has an existing valid payment claim at the commencement of the Amendment Act, but more than six months have passed after the work was carried out, will not be disadvantaged.

  1. If a claimant's right to a payment claim has expired at the commencement of the Amendment Act it will be not be revived by the application of the new provision in section 17A(3)(b), which enables a claimant to make a final payment claim 28 days after the expiry of the end of the last defects liability period (if any) under the contract.

1Clauses 15A and 15B of the Health Legislation Amendment Act 2014 introduced new transitional arrangements to the Building and Construction Industry Payments Amendment Act 2014.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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