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Building Construction Industry Payments Act 2004 QLD Bill Update

In May 2014, the Building and Construction Industry Payments Act 2004 QLD (BCIPA) Bill 2014 (Bill) was introduced to the Queensland Parliament. Changes based on the Bill expected to commence 1 September 2014 did not occur. Subsequently an amendment to the Building and Construction Industry Payments Act 2004 QLD (BCIPA) Bill (Amended Bill) was passed on 11 September 2014 following the delivery of a Parliamentary Committee Report (Report) on 1 September 2014.

Resulting from the 18 recommendations suggested by the Report, a limited number of the recommendations were subsequently incorporated into the Amended BCIPA Bill. The limited adoption of all 18 recommendations despite general support of its principles was due to the consideration that their objectives could be achieved in other ways such as through amending regulations instead of amending the Bill.

Below is a brief summary of several key changes included with the Amended Bill (Building and Construction Industry Payments Act 2004 QLD).

  • For matters relating the registration and appointment of adjudicators, the Queensland Building and Construction Commission (QBCC) replaces the current system with the claimant selecting an authorised nominating authority (ANA) and then the ANA referring the matter to an adjudicator. Despite the Report recommending the Amended Bill to include high-level guiding principles regarding the appointment process of adjudicators, the Government has proposed that a policy approved by the QBCC Board and published on the QBCC’s website by completed instead. Included within the Amended Bill is an allowance for the QBCC Board to make a policy governing the administration of Building and Construction Industry Payments Act (BCIPA).
  • The duration for which a payment claim can be made submitted has been halved from 12 months to six months from the date of the completion of construction work or the supply of related goods and services supplied (unless a longer period is stipulated within the contract).
  • A dual model regime will commence replacing a generalised scheme to allow for extended time frames in order to settle complex payment claims. The Bill defines that a ‘complex payment claim’ is a claim with an amount in excess of $750,000.00 (or a greater amount prescribed by regulation), a latent condition or a time-related cost. However in the Amended Bill reference to the latest and time-related cost is removed resulting in a change to the definition of a ‘complex payment claim’. A ‘complex payment claim’ is now defined pursuant to the Amended Bill as a claim that is assessed solely on monetary value e.g. $750,000 and above as prescribed by regulations excluding GST.
  • Changes have also been applied to the Christmas shut down period. The extension as a result of changes to the definition of business days will now exclude the period between 22 December and 10 January over the industry shut down period.
  • Respondents can now include new reasons for withholding payment in their adjudication responses that were not previously included in the payment schedule. A right of reply for the new reasons is provided to the claimants for up to 15 business days as well as applying via the adjudicator for an additional 15 days if the nature of the new reasoning is complex.
  • Transitional arrangements are included within the Amended BCIPA Bill to deal with construction contracts entered into before commencement. Such transitional arrangements are a combination of the unamended BCIPA and changes to the Bill included by the passing of the Amended Bill. Construction contracts signed before commencement will maintain the existing security of progress payment provisions under BCIPA and progress payments. Under the Amended Bill, the changes to the functions of the ANA’s such as the appointment of adjudicators have being transferred to the registrar will apply to the construction contract. Any application that is submitted before the official commencement of the Amended Bill be handled under the previous BCIPA processes as the Amended Bill is currently awaiting Royal Assent for commencement.

The Amended Bill, Building and Construction Industry Payments Act 2004 QLD (BCIPA) Bill (Amended Bill) upon receiving the Royal Assent will be an important development in the construction industry. It is highly advised that both claimants and respondents familiarise themselves with the new procedures and amendments to understand the implication of such changes. The drafting of new construction contracts should also take into account the changes to BCIPA for both Claimants and Respondents seeking resolution to building and construction payment Disputes.

BCIPA QLD Adjudication Applications will remain the most efficient means of Debt Recovery and Debt Collection for Queensland Building & Construction Contractors.