Information for Respondents

The following information is designed for respondents to get a basic grasp of the concepts and relevant requirements associated with being ‘a respondent’ under the Building and Construction Industry Payments Act (QLD). This includes relevant definitions and requirements of a respondent who has been engaged by a claimant in the procedures documented within the relevant security of payment legislation.

The following information is not a substitute for professional legal advice and should not be taken as such. If in doubt about any of this information please consult with your local legal advisor or contact the RICS DRS directly.

On this page:

Who, or what, is a ‘respondent’? What are their responsibilities?

A respondent is a person or entity who is, or may be, liable to make a payment to a claimant under a construction contract.

After receiving a payment claim from a claimant,  the respondent must respond in one of several ways.

A respondent may:

  • Agree with the claim and pay the claimed amount
  • Disagree with the claim, state the amount they contend to be payable, and state the reasons why they believe the full amount is not payable.

Alternatively, the respondent may choose to do nothing, in which case they run the risk of forfeiting their rights in contesting the payment claim in later adjudication and legal proceedings.

Identifying a payment claim.

The payment claim is the mechanism by which a claimant makes a progress claim for works completed or goods supplied under a construction contract.

Generally, a payment claim can be identified through the following means:

  • The claim identifies the construction work or related goods and services to which the progress payment relates.
  • The claim states an amount as payable
  • The claim states that it is made under the Act – typically the claim must have words to the following effect on the document – “This is a payment claim made under the Building and Construction Industry Payments Act QLD 2004” for claims subject to Queensland jurisdiction.

It should be noted that the words on the claim relating to the relevant security of payment legislation may not have to be exactly the same as stated above, but simply alert you to the fact that the claimant is engaging the Building and Construction Industry Payments Act.

It also should be noted that referring to invoices previously served on the respondent (which do not necessarily have to be BCIPA payment claims) which identify the work can, in many cases, be acceptable in ‘identifying the work’ for the sake of a specific BCIPA payment claim.

I have received a payment claim. What do I do now?

As illustrated previously, once a payment claim is submitted to a respondent, a number of responsibilities are placed upon the respondent. The respondent has a number of options when replying to a payment claim. These include:

  • The respondent may agree with the claimed amount and choose to pay the claimed amount. There is no requirement for a payment schedule if this option is chosen.
  • The respondent may dispute the claimed amount and issue a payment schedule which indicates the amount that the respondent deems to be payable. Reasons for withholding payment from the claimant must be included on the schedule. The schedule must also identify the payment claim to which it specifically relates to.

Consequences of not providing a valid payment schedule.

Generally, a respondent becomes liable to pay the claimed amount if they do not provide the claimant with a valid payment schedule. The claimant gains a statutory right to:

  • After providing a Notification of Intent to Apply for Adjudication, the right to apply for adjudication of the payment claim.
  • Suspend work or supply of related goods and services under the contract with statutory immunity.
  • Recover the unpaid portion of the payment claim from the respondent as a debt owning to the claimant in any court of competent jurisdiction.

Furthermore, in most circumstances the respondent can only rely on the information provided in a payment schedule for disputing the reasons for not paying a claimant. Therefore, it is in the respondent’s best interest to provide a valid payment schedule.

Responding to a payment claim with a payment schedule.

The respondent is allowed ten business days from the service of a valid payment claim to provide a payment schedule. If the respondent intends to pay the full amount without dispute, then there is no need to provide a payment schedule, however it is good practice to always respond to payment claims with payment schedules.

Responding to a notice of intent to apply for adjudication with a payment schedule.

If the respondent is served with a Notice of Intent to Apply for Adjudication they are given five business days (which occurs within 20 business days after the due date for payment).

This notice can be identified by a statement which says that the claimant gives the respondent 5 business days to provide a payment schedule or they will proceed to adjudication of the payment dispute (see section 21(2) of the BCIP Act for the full Queensland requirements).

This effectively gives the respondent a second chance to provide a payment schedule. However, in this instance, a respondent is only given 5 business days in which to provide one. This is often referred to as a ‘division 2 payment schedule’.

Relationship between a payment schedule and an adjudication response.

During the adjudication process, the respondent is generally given a right to respond to the issues raised in a claimant’s adjudication application. This is termed an ‘adjudication response’.

However, in most cases, a respondent is only allowed to expand on disputed issues that had previously been articulated in the respondent’s payment schedule. Generally, they are barred from raising new issues. This means that constructing a correct and valid payment schedule is vitally important if the respondent wishes to contest such issues in future proceedings.

If your contract does not have a provision for a specific reference date, the default provision is the last day of the month.

Constructing a valid payment schedule.

The requirements for constructing a payment schedule are set out as follows:

The schedule must fulfil all of these criteria:

  • Identify the payment claim to which it relates.
  • State the amount the respondent proposes to make.
  • If the amount is less than the claimed amount, the respondent must state the reasons why it is less than the claimed amount.

There is no requirement to title of a payment schedule as ‘payment schedule’.

You can find an example payment schedule available for download amongst our forms and tools.

Serving a payment schedule.

The respondent is required to serve the payment schedule on the claimant either by the means stated in the relevant construction contract and the relevant security of payment legislation.

If the payment schedule is in direct response to a payment claim, it must be served within 10 business days of being served with the payment claim.

If the payment schedule is in response to a Notice of Intent to Apply for Adjudication, it must be served within 5 business days of being served with the notice.

It is recommended that a respondent keep evidence of when a schedule was served, by what method, and on whom it served.

What happens after the payment schedule is submitted?

If you have submitted a payment schedule that is less than the claim amount, the claimant may elect to accept the amount scheduled or challenge the amount through the process of adjudication spelled out in the relevant security of payment legislation.

If the claimant chooses to engage the adjudication processes, the respondent should realise that by submitting a payment schedule they are entitled to also submit an adjudication response in response to the claimant’s adjudication application.

For further information on the adjudication process, click here to open the relevant knowledge base article.

Need more help?

Throughout the year, the RICS DRS run regular training courses for potential claimants, respondents and other interested parties.

These give detailed information on how the BCIP Act operates and how it can be utilised effectively. Visit our training schedule for more information by clicking here.

Furthermore, the RICS DRS provides a number of publications which provide more detail on all aspects of the Building and Construction Industry Payments Act. For information on these publications please click here.

Alternatively, you can contact us directly.

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