Not issuing Payment Schedules in QLD for 'invalid' Payment Claims?

Principles, Builders and Subcontractors not issuing Payment Schedules when given a Payment Claim for construction work carried out in Queensland should reconsider discarding or ignoring Payment Claims without giving one, based on these practical reasons - in addition to the requirement to do so under the Building Industry Fairness (Security of Payment) Act 2017 (QLD) ('Act').

Technically, if a Payment Claim is invalid because the Claimant does not have jurisdiction to make a Claim, a Respondent isn't liable to issue a Payment Schedule in accordance with the Act because the Act is not enlivened, or otherwise "in force" in the circumstances.

However, here are five very good reasons to issue a Payment Schedule anyway:

1) Do you really want to have that argument with the Regulator anyway?

The Queensland Building and Construction Commission ('QBCC') is tasked with the responsibility of investigating and (if necessary) taking disciplinary action against those failing to give a Payment Schedule under section 76 of the Act. Those regularly coming to the attention of the Regulator run the risk of becoming a household name down at Montague Road, which is never a good thing unless your reputation is based on positive interactions. We are all human, after all.

2) Give a Payment Schedule to avoid Adjudication in the first place!

Payment Schedules should be given to deter the other party from taking an Adjudication. Where valid and justified reasons for non-payment of an amount in a Payment Claim are clearly telegraphed to the Claimant in the Payment Schedule, the Respondent lowers its risk of finding itself amidst a costly and time consuming Adjudication matter.

3) Even if you do issue a Payment Schedule, and you still end up in an Adjudication, you are less likely to be allocated an Adjudicator that isn't well qualified to decide the issues in dispute.

The Adjudication Registry follows a Grading and Referral Policy, which allows them to consider the issues in dispute between the parties and refer the dispute to an Adjudicator with experience in the areas relevant to those issues. If you fail to give a Payment Schedule, and subsequently in an Adjudication Response seek to put forward complex legal submissions regarding a jurisdictional issue, you run the risk of having a Junior Adjudicator, or an Adjudicator with no legal qualifications decide your matter.

4) You will likely end up paying a good portion of the Adjudicator's fees, even if you "win" the Adjudication on a technical legal basis (even though you didn't give a Payment Schedule).

Adjudicator's can take into account the Parties' conduct in deciding who pays what portion of their fees, so issuing a Payment Schedule clearly stating the reasons for non-payment (including jurisdictional issues) just makes sense.

5) Avoid burning your relationships.

Profitable building companies thrive on well established relationships, and repeat trusted business. If you simply fail to pay in silence, and don't bring a cap in hand dialogue to the Claimant to address the reason at the time, it's likely that the trust between the Parties will be damaged.

Issue a Payment Schedule, but I implore you to go further - don't be a keyboard warrior and shoot a shot across the bow without picking up the phone to have the conversation. In most cases, reasonable people understand reasonable logic, and there's usually a happy middle ground to be reached with a mutual respect.