Resolving disputes

Victoria

Building and construction payment disputes

The object of the Victorian Building and Construction Industry Security of Payment Act 2002 is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services.

This 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 this Act begins when the Claimant serves a payment claim on the Respondent. Timeframes are very strict under the Act and if the Claimant fails to meet these timeframes, they risk the application being deemed invalid.

Resolution Institute has provided a flowchart to assist both parties through the adjudication process to ensure that there is a good understanding of the timeframes under the legislation which are dependent on the actions taken by either party. Parties should also be familiar with the methods of serving documents.

Complete the online form to use the Resolution Institute nomination service to appoint an adjudicator for you.

Complete the online form

If you wish to lodge an application physically, you can do so at the following address:

Compass Offices
Level 10, Tower 4, World Trade Centre, 611 Flinders Street
Melbourne VIC 3005


About the process

For details on each process please click on the links below:

  1. Payment Claim
  2. Payment Schedule
  3. 18(2) Notice
  4. Adjudication Application
  5. Adjudication Response
  6. Adjudication Decision
  7. Fees

1) Payment Claim

The Adjudication process starts when a Claimant issues a payment claim on the Respondent. It is important that all the criteria in the legislation for this document are met and your payment claim is 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 claimed amount

Ways that a claimant can serve a payment claim on a respondent include:

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

It is important that evidence of service is kept, such as fax transmission reports.

The payment schedule is due 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 VIC (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, depending on what is specified within the relevant construction contract.


3) Section 18(2) Notice

If the Respondent does not provide a payment schedule within the time required under section 15(4) and does not pay the whole of the amount claimed in the payment claim by the due date for payment worked out under section 12, the Claimant may apply for adjudication under section 18(1)(b). To do so, the Claimant must send a notice complying with section 18(2).

The 18(2) Notice is a notification by the Claimant to the Respondent of the intention to apply for adjudication of the payment claim. The 18(2) Notice must be given to the Respondent within 10 business days after the due date for payment.

The Respondent must be given 2 business days after receiving the 18(2) Notice in which to provide a payment schedule. In the case of an application under section 18(1)(b), the application must be made within 5 business days after the end of the 2 business day period that the Respondent has in which to provide a payment schedule

The 18(2) Notice should:

  • Be made in writing by the Claimant to the Respondent.
  • Refer to the original payment claim (and include a copy if possible).
  • State that no payment schedule was received in response to the payment claim.
  • State that it is ‘a notice given under section 18(2) of the Building and Construction Industry Payments Act 2002 (VIC)’.
  • State that it is the Claimant’s intention to apply for adjudication.
  • State that the Respondent has two business days after receiving the 18(2) Notice in which to provide a payment schedule.

Once the two business days following the service of the 18(2) Notice on the Respondent have expired, and whether or not the Respondent provides a payment schedule in response to the 18(2) Notice, the Claimant has five business days within which to make an Adjudication Application to an Authorised Nominating Authority (ANA), such as Resolution Institute. If the Respondent does not provide a payment schedule under section 15 or in response to the 18(2) Notice, section 21(2A) prohibits the Respondent from providing an adjudication response responding to the adjudication application.

Sample 18-2 notice (DOC)


4) Adjudication Application

An Adjudication Application must (as per the Act):

  • Be in writing and:
  • Be addressed to the ANA
  • Must 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 to be decided by the Claimant.
  • Be sent to the Respondent at the same time that the Application is sent to the ANA. Evidence of service of the Application to the Respondent should be provided to the ANA, for example a copy of fax transmission report.

Evidence of service of the Application to the Respondent should be provided to the ANA, for example a copy of fax transmission report.

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 past
  • The Respondent fails to issue a payment schedule and it is less than 5 business days since the end of the two business days of the 18(2) notice.

For enquiries, please ring 1800 651 650

To submit an application, please send to:

Email to:
nominations@resolution.institute

fax to:
+61 2 9251 3733 or

mail or hand-deliver to:
Compass Office
Level 10, Tower 4, World Trade Centre,
611 Flinders Street,
MELBOURNE VIC, 3005

Sample claimant submission VIC (DOC)

Resolution Institute VIC BCISP Application Form (DOC)


5) Adjudication Response

If the Respondent has issued a payment schedule they will be given the option to lodge an adjudication response. This should be lodged with the ANA handling the application within five business days of receiving a copy of the application or two business days of receiving notice of an adjudicators acceptance, which ever is later.

An Adjudication Response must (as per the Act):

  • Be in writing and
  • Identify the adjudication application to which it relates
  • May contain such submissions relevant to the response as the respondent chooses to include.

A copy of the adjudication response must be served on the claimant at the same time it is served on the ANA.

The 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 the two business day period, the claimant has the right to lodge an adjudication application within five business days. Under these circumstances the Respondent does not have the right to make an adjudication response.

For inquiries, please ring 1800 651 650

To submit an application, please send to:

Email to:
nominations@resolution.institute

fax to:
+61 2 9251 3733 or

mail to:
Resolution Institute
Level 1
13-15 Bridge Street
SYDNEY NSW 2000

hand-deliver to:
Compass Office
Level 10, Tower 4, World Trade Centre,
611 Flinders Street,
MELBOURNE VIC, 3005

Please do not attend this office in person during this period, as it is open only for the receipt of mail.

Sample respondent submission VIC (DOC)


6) Adjudication Decision

The decision is due 10 business days from the date that the adjudicator sends his acceptance to both parties. The parties are jointly and severally liable for the full amount of the adjudicators fees . It is the responsibility of the parties to determine between themselves 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 release the Respondent is required to pay the adjudicated amount (if any) within 5 business days from the release of the determination to the parties 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 or not an adjudication certificate has been requested or issued.


7) Fees

Application Fees

  • Nil

Adjudicator Fees

Claims under $100,000

  • Claims up to $7,000 = fixed fee of $750 (incl. GST)
  • Claims between $7,001 and $15,000 = fixed fee of $1,100 (incl. GST)
  • Claims between $15,001 and $25,000 = fixed fee of $2,200 (incl. GST)
  • Claims between $25,001 and $40,000 = fixed fee of $3,300 (incl. GST)
  • Claims between $40,001 and $70,000 = fixed fee of $4,400 (incl. GST)
  • Claims between $70,001 and $99,999 = fixed fee of $5,500 (incl GST)

Claims over $100,000

  • Claims of $100,000 and above = Varying hourly rate between $245 and $450 per hour (exclusive of GST)
The relevant fees are payable at the time the parties to an adjudication are notified that a determination, or in the event a determination cannot be made, a decision by the adjudicator is available to be released upon payment of the fees.
The fees stated above are inclusive of the Authorised Nominating Authority Fee per s 43C of the Building and Construction Industry Security of Payment Act 2002 (VIC).
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Adjudication Certificate Fees

  • Claims under $100,000 = $220 (incl GST)
  • Claims of $100,000 and above = $550 (incl. GST)

Payment Methods Accepted

Resolution Institute accepts the following payment methods:
  • Electronic Funds Transfer (EFT)
  • Visa
  • MasterCard
  • Cheque