If your business has completed construction work but a client has withheld payment, you may be able to recover the debt through a BIFA adjudication application. The adjudication process under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) provides a fast way to resolve payment disputes and protect cash flow in the construction industry.
However, strict timeframes and technical requirements apply. Obtaining legal advice before lodging an adjudication application helps ensure your claim meets the Act’s requirements and is properly prepared.
This guide outlines how adjudication applications work in Queensland, when they can be used, and when legal advice may assist in protecting your position.
Building Industry Fairness Act (BIFA)
The Building Industry Fairness (Security of Payment) Act 2017 (BIFA) establishes the statutory framework for building and construction industry payments in Queensland. This legislation prioritises industry cash flow by ensuring those who perform work receive timely payment. The QBCC oversees this system, which aims to achieve several core outcomes:
- Maintaining liquidity across the contracting chain;
- Providing an efficient alternative to traditional court proceedings; and
- Protecting parties from the impact of protracted payment delays.
A key feature of the legislation is the “pay now, argue later” principle, meaning adjudication provides an interim decision to keep projects moving while parties retain the ability to pursue further legal action if necessary.
Payment Claims and Payment Schedules in QLD
Before an adjudication application can be made, a valid payment claim must usually be issued.
A payment claim must:
- Identify the construction work or related goods and services
- State the amount claimed
- Be issued under the contract or in accordance with BIFA requirements
After receiving a payment claim, the respondent must provide a payment schedule within the required timeframe (typically 15 business days, unless the contract specifies a shorter period).
The payment schedule must state:
- The amount the respondent proposes to pay (if any)
- The reasons for withholding payment
If a respondent fails to provide a payment schedule within time, they may become liable for the full amount of the claim and lose certain rights to dispute the claim later.
The validity of payment claims and schedules can be critical in later adjudication proceedings, therefore, obtaining legal advice early to ensure everything is technically sound, can help ensure the correct process is followed.
When Can You Lodge an Adjudication Application?
If a payment dispute remains unresolved after a payment claim and payment schedule, the claimant may apply for adjudication under BIFA.
Common situations where businesses consider an adjudication application include:
- Payment claims that have been rejected or reduced
- Payment schedules that dispute the amount claimed
- Failure by the respondent to provide a payment schedule
- Ongoing delays in receiving payment for completed work
Adjudication is commonly used by:
- Builders
- Subcontractors
- Contractors
- Suppliers providing construction-related goods or services
Because the process is highly technical and time-sensitive, businesses often seek legal advice when preparing adjudication applications to ensure compliance with the Act. Preparing detailed evidence immediately upon receiving a payment schedule ensures the adjudicator has the necessary facts to assess the claim.
The BIFA Adjudication Application Process
Once an adjudication application is lodged with the Adjudication Registrar, the following steps typically occur:
- Appointment of an adjudicator: An independent adjudicator is appointed to determine the dispute.
- Adjudication response: The respondent is given a limited timeframe to lodge a formal response.
- Review of submissions: The adjudicator reviews the payment claim, payment schedule, submissions, and relevant contract documents.
- Adjudication decision: A decision is usually issued within 10–15 business days after the adjudicator accepts the application.
Because adjudication responses must be prepared within extremely tight statutory timeframes, respondents often need to act immediately once an adjudication application is received. Preparing a comprehensive response can require reviewing contract documents, payment claims, payment schedules, project correspondence, and supporting evidence in a very short period.
For this reason, businesses often need to engage construction lawyers with sufficient experience and resources to prepare a detailed response within the available timeframe. Failure to properly address the issues raised in the application may significantly affect the outcome of the adjudication.
Enforcing Adjudication Decisions in Court
Once an adjudication decision is made, the respondent is generally required to pay the adjudicated amount within five business days. If payment is not made within this timeframe, the successful party may request an adjudication certificate.
This certificate can then be registered in the appropriate Queensland court, where it is treated as a court judgment. Once registered, the claimant may pursue standard enforcement options to recover the debt.
Enforcing a building adjudication decision in QLD provides claimants access to standard court enforcement procedures, including:
- Enforcement warrants for the seizure of property or redirection of debts;
- Statutory demands to initiate insolvency processes against corporate debtors; and
- Bankruptcy proceedings against individuals.
Legal advice is recommended to navigate the enforcement process and identify the most appropriate recovery strategy.
Adjudication vs Court Proceedings
While adjudication provides a fast and practical method for recovering payment, it does not necessarily resolve every aspect of a construction dispute. Even after a decision is registered, the process remains subject to judicial oversight via a Supreme Court jurisdictional review construction process. This is not a merit-based appeal; the court does not re-examine the evidence or substitute its own decision for that of the adjudicator. Instead, judges scrutinise the legality of the adjudicator’s decision-making process to ensure it complies with the strict boundaries of the BIFA.
Key differences include:
- Adjudication
- Fast decision (often within weeks)
- Focused on payment disputes
- Interim determination under the Act
- Court proceedings
- Longer and more detailed process
- Allows broader claims such as breach of contract
- Provides a final determination of legal rights
In some cases, parties may pursue litigation after adjudication if a final resolution of the dispute is required. In this case, legal advice is necessary and an in–depth consideration of costs before taking this approach should be made.
Speak With A Construction Dispute Lawyer
If your business is involved in a building payment dispute or considering an adjudication application, obtaining legal advice early can be critical. The strict statutory deadlines, technical documentation requirements, and short response periods mean that prompt legal guidance can make a significant difference to the outcome.
The construction dispute lawyers at Greenhalgh Pickard assist businesses across the Sunshine Coast and Queensland with payment claims, adjudication applications, adjudication responses, and enforcement of adjudication decisions.
Contact our team to discuss your situation and obtain guidance on the most appropriate steps for resolving your building payment dispute.
Disclaimer: This article provides general information only and does not constitute legal advice. It does not take into account your personal circumstances and should not be relied on as a substitute for professional legal advice. Litigation involves significant risks, costs, and strict procedural requirements. For advice about your specific situation, please contact Greenhalgh Pickard on (07) 5444 1022.
