Victoria

Building and construction payment disputes

The Victorian Building and Construction Industry Security of Payment Act 2002 aims to ensure that a person is entitled to receive, and is able to recover, progress payments if the person undertakes to carry out construction work, or supply related goods and services, under a construction contract.

The Act ensures that a person is entitled to receive a progress payment by granting a statutory entitlement to such a payment regardless of whether the relevant construction contract makes provision for progress payments.

The process of adjudication under the Act begins when the claimant serves a payment claim on the respondent. An application may be deemed invalid if the prescribed timeframes are not met.  

Or to find out more about the adjudication process, go to the website of the Victorian Building Authority or see below.

To access a, copy of the Act

Access the Victorian Process

Download

Let us choose an adjudicator for you

Complete the online form if you want Resolution Institute to nominate an adjudicator for you.

Resolution Institute will assess your matter and appoint a suitably qualified and experienced adjudicator.

Complete the Online Form

If you are unable to lodge online, you can submit your application by:

• Email: to [email protected] (with all supporting documents attached in readable formats e.g. PDF, Excel, etc.)
• By post to PO Box 440, Chatswood NSW 2057
• Or in hard copy to the address below:

Compass Offices (Melbourne)
Tower 4, Level 10, World Trade Centre
18-38 Siddeley St Docklands VIC 3008
Tel: 1800 883 753

Opening hours: 9.00am to 5.00pm, Monday to Friday

About the process

1) Payment claim

The adjudication process starts when a claimant issues a payment claim to the respondent. All legislative criteria must be met, and your payment claim must be served correctly on the respondent.

A payment claim is a tax invoice that must:

  • Be in writing
  • Include the words ‘This is a payment claim under the Building and Construction Industry Security of Payment Act 2002 (VIC)’, or words to the same effect
  • Describe in detail the construction work, related goods or services which are the subject of the claim
  • Be addressed to the respondent
  • State the amount claimed.

How can I serve a payment claim on a respondent?

  • Hand delivery
  • Post to the respondent’s ordinary place of business address
  • Fax to the respondent’s ordinary place of business.

NB  You should keep a copy of evidence of service.

A payment schedule is due to be issued by the respondent:

  • By the date in accordance with the terms of the contract or
  • If the contract does not specify a date, then according to the Act, you are entitled to be paid 10 business days after the payment claim has been issued on the respondent.

Sample payment claim (DOC)

2) Payment schedule

A payment schedule is a response to a payment claim by the respondent. It must (as per the Act):

  • Be in writing
  • Be addressed to the claimant
  • Identify the payment claim to which it relates
  • State the scheduled amount that the respondent proposes to pay (even if that amount is $NIL)
  • Provide detailed reasons for withholding payment if the amount proposed to be paid is less than the claimed amount.

The payment schedule is served:

  • Within the time required by the relevant construction contract or
  • Within 10 business days after the payment claim is served

whichever time expires earlier.

Please note, that the due date for the payment and the due date for the payment schedule may not be the same. It will depend on what is specified within the relevant construction contract.

3) Section 18(2) Notice

A s 18(2) Notice is issued if the respondent does not pay or send a payment schedule in response to the claimant's payment claim. It serves as a claimant’s intention to apply for adjudication if the claimed amount remains unpaid.

The claimant has 10 business days after the due date for payment of the payment claim to issue a s 18(2) Notice.

Once a s 18(2) notice has been issued, a respondent has two business days to provide payment or a payment schedule.

The s 18(2) Notice must:

  • Be made in writing
  • State that no payment schedule was received in response to the payment claim
  • Refer to and include the original payment claim
  • State that it is ‘a Section 18(2) Notice according to the Building and Construction Industry Payments Act 2002 (VIC)’
  • State that you intend to apply for adjudication.

Once the two business days following the service of the s 18(2) Notice on the respondent have expired, the claimant has five business days within which to make an adjudication application to an Authorised Nominating Authority (ANA), such as Resolution Institute. The respondent will not have the right to respond to the adjudication application when this occurs.

Sample s 18-2 notice

4) Adjudication application

An adjudication application must (as per the Act):

  • Be in writing
  • Be addressed to the ANA
  • Be accompanied by the appropriate application fee (if applicable). Please note no application fees are charged by Resolution Institute in its role as an ANA
  • Identify the payment claim and the payment schedule (if any) to which it relates
  • Contain submissions relevant to the claim, such as the history of the relationship between the parties, and all correspondence and documentation that will support your case. The content included in your application is decided by the claimant.
  • Be sent to the respondent at the same time the application is sent to the ANA. Evidence of service of the application to the respondent should be provided to the ANA.

You may apply for adjudication if:

  • You disagree with the amount the respondent offers in the payment schedule, and it is less than 10 business days since you received the payment schedule
  • The respondent offers to pay $Nil in the payment schedule and it is less than 10 business days since you received the payment schedule
  • The respondent fails to pay the whole or part of the amount due and it is less than 10 business days since the due date for payment has passed
  • The respondent fails to issue a payment schedule and it is less than five business days since the two-business day period after the issue of the s 18(2) Notice has passed.

Applications can be submitted by:

Completing the online form

If you are unable to lodge online, you can submit your application by:

  • Email: to [email protected] (with all supporting documents attached in readable formats e.g. PDF, Excel, etc.)
  • By post to Resolution Institute PO BOX 440 Chatswood NSW 2057
  • Or in hard copy to the address below:

Compass Offices (Melbourne)
Tower 4, Level 10, World Trade Centre
18-38 Siddeley St
Docklands VIC 3008
Tel: 1800 883 753

Opening hours:  9am to 5pm, Monday to Friday

5) Adjudication response

If the respondent has issued a payment schedule, they will be given the option to lodge an adjudication response. This appointed adjudicator will advise how the response should be lodged. It should be lodged within:

  • Five business days of receiving a copy of the application; or
  • Two business days of receiving notice of an adjudicator’s acceptance

whichever is later.

An adjudication response (as per the Act):

  • Must be in writing
  • Must identify the adjudication application to which it relates
  • May contain submissions relevant to the response
  • Must be served on the claimant (and copied to the ANA) at the same time it is served on the appointed adjudicator.

A s 18(2) Notice is an intention to apply for adjudication if the claimed amount remains unpaid. This notice gives the respondent two business days within which to provide payment or a payment schedule.

If the respondent has not paid or provided a payment schedule by the expiry of this two-business day period, the claimant has the right to lodge an adjudication application within the next five business days. The respondent does not have the right to make an adjudication response when this occurs.

Sample respondent submission VIC

6) Adjudication decision

The decision is due 10 business days from the date that the adjudicator receives the adjudication response or from the date it would have been due.

The parties are jointly and severally liable for the full amount of the adjudicator’s fees. It is the responsibility of the parties to determine between them who will pay the total amount due so that the determination will be released. The precise allocation between the parties in respect of these amounts is specified in the determination.

After the determination is released, the respondent is required to pay the adjudicated amount (if any) within five business days from its release.

Failure to make this payment entitles the claimant to request (in writing) an Adjudication Certificate from Resolution Institute to file a Judgement Debt in the appropriate court of jurisdiction.

Resolution Institute is not at liberty to advise the respondent or any of its representatives whether an adjudication certificate has been requested or issued.

7) Fees

Application fees

No application fees are charged by Resolution Institute

Adjudicator fees

Quantum (excl GST)

Adjudicator fee (Fixed and incl GST)

Under $7,000

$750

$7,001 to $15,000

$1,100

$15,001 to $25,000

$2,200

$25,001 to $40,000

$3,300

$40,001 to $70,000

$4,400

$70,001 to $99,999

$5,500

Claims over $100,000

*Adjudicators hourly rate applies

 

*On average an adjudicator charges an hourly rate which varies between $245 to $450 per hour (exclusive of GST) depending on the adjudicator allocated.

The relevant fees are payable at the time the parties to an adjudication are notified of a decision by the adjudicator. However, the level of the adjudicator’s fees depends on the quantum of the matter.

Adjudication certificate fees

No fees are charged by Resolution Institute to issue an Adjudication certificate.

If you have any questions please call our dedicated Nomination Services Officer on 1800 651 65.