The most common question that we are asked is:

“What should we put on our invoice for the security of payment act?”

As we all know only too well the building and construction industry is notoriously bad for payment disputes and non-payment.

And without a shadow of a doubt the best way to deal with such a dispute is through adjudication under the building and construction industry security of payment act legislation.

So what should you put on your invoice so that you can rely on the security of payment act legislation when you need to?

Firstly, let’s do away with the idea that putting a certain sentence on your invoice about the security of payment act is a magic wand or an insurance policy that guarantees past payment or payment at all. While as it plays its part there other critical components to what makes for a successful payment claim. Let’s look at them one by one.

No. 1 – Properly Describe The Respondent

You must correctly name the entity that you have contracted with, be that entity, an individual, a company, or a trust. And you must include their ABN number and or their ACN number.

ABN Lookup and, ASIC Search are good tools for verifying the accuracy of an entity’s name and ABN and ACN numbers.

And, crucially, the best time to get this item sorted is at the time of issuing your quotation. Don’t be shy, ask your prospective client for the name and ABN number etc that you should address your quotation to. Then do your own checks to make sure sure everything checks out.

In the case of an individual your quotation (and subsequently all of your payment claims etc) should look like this:

John Peter Smith ABN 12 123 123 123 trading as Smith’s Building

In the case of a company your quotation (and subsequently all of your payment claims etc) should look like this:

Smiths Building Pty Ltd ACN 123 123 123

In the case of a trust your quotation (and subsequently all of your payment claims etc) should look like this:

Brown Family Pty Ltd (ACN 123 123 123) as the trustee for the Brown Family Trust ABN 12 123 123 123 trading as Brown’s Building & Construction

If you don’t correctly describe the respondent on your progress claim (and quotation and contract etc) nothing else matters because your payment claim is defective and invalid

No. 2 – Properly Describe The Work That You Are Claiming For

You must clearly and comprehensively describe the work that you are claiming for.

No. 3 – You Must Show How You Have Calculated The Amount Of Your Claim

As is the case above your claim must me itemised and quantified and it must also show the individual costs and rates etc for each item.

No. 4 – What To Put On Your Invoice To Make It A Payment Claim Under The Security Of Payment Act Legislation

The correct endorsement to invoke the Security Of Payment Act legislation varies from state to state so call us on 1300 732 687 and we can help you determine the correct endorsement for your payment claim.

No. 5 – When To Serve A Payment Claim

The time of service for monthly payment claims varies from state to state so call us on 1300 732 687 and we can help you determine the correct day of the month for serving your payment claim.

No. 6 – Your Payment Claim Must Be Properly Served

When you are conducting your searches early on in the process make a note of the ‘Principal Place Of Business’ of the individual or the company.

You can the serve the payment claim by express post and track it. It is crucial that you have evidence of service.

Alternatively if your client has a proprietary email address such as John@smithsbuilding.com.au you can email the progress claim as long as you can request a ‘delivery receipt’ and or a ‘read receipt’ using Microsoft Outlook etc…

Service by email to non-proprietary email accounts such as gmail or iCloud etc is not necessarily acceptable service.

I am pleased to advise the Federal Government has responded positively to industry requests and has announced a review into all security of payment laws in the building and construction industry including Security Of Payments Act NSW.

We hope this review will be the catalyst for federal legislation to harmonise the many state and territory varieties.

I attach the Minister for Employment, Senator Michaelia Cash, media release as well as the terms of reference for the Review.

The Reviewer is John Murray AM. John’s appointment has been welcomed by most in the industry for his vast legal and practical knowledge of security of payment legislation and the practicalities of adjudication.

His terms of reference are particularly pleasing. They are wide ranging and allow him to travel into some of the most difficult and complex areas challenging industry participants in both the resolution of payment disputes and participating in the structures designed to expedite dispute resolution.

A starting point for his consideration of State and Territory legislation is the Queensland Act PRIOR to the introduction of the 2014 amendments.

John is known for his independence, impartiality and innate fairness when dealing with all sectors of the industry. These are attributes which will serve his Review most well.

Entitlement To Payment Under The Security Of Payments Act NSW

Matters to be Determined

1. Whether the Act applies.
2. Whether the Claimant is entitled under the Act to full payment of the Payment Claim that is the subject of this Adjudication Application.
3. What is the due date for payment?
4. What rate of interest is the Respondent liable to pay, if any?
5. Who is liable to pay the Adjudicators Fees

Jurisdiction

1. The Claimant submits that the Adjudicator has jurisdiction to determine this matter under the Building & Construction Industry Security of Payment Act 1999 for the following reasons;
2. Pursuant to Section’s 4 and 7 of the Act there is a Construction Contract within the meaning of the Act between the Claimant and the Respondent.
3. Pursuant to Section 7 of the Act the works which are the subject of this Adjudication Application have been carried out in New South Wales.
4. Pursuant to Section 5/6 of the Act, the nature of the works carried out / supplied are “construction works” or “related goods & services”
5. Pursuant to Section 8 of the Act there is a valid Reference Date
6. Pursuant to Section 13 of the Act the Payment Claim was served within 12 months of last carrying out / providing “construction works” or “related goods & services”. The Payment Claim properly identifies the “construction works” or “related goods & services”. The Payment Claim indicates the “claimed amount”. The Payment Claim states that it is “made” under the Act. Pursuant to Section 9 of the Act the Payment Claim sets out how the amount claimed has been calculated. The Claimant is / isn’t a Head Contractor and a Supporting Statement is / isn’t attached.
7. Pursuant to Section 11 of the Act the due date for payment, XX/XX/XXXX, has passed.
8. Pursuant to Section 17/2 of the Act a notice has been prepared and served on the Respondent by the Claimant in accordance with the Act.
9. Pursuant to Section 14 of the Act a valid Payment Schedule was served on the Claimant by the Respondent.
10. Pursuant to Section 17 of the Act the Adjudication Application has been lodged by the Claimant with an Authorised Nominating Authority within the time allowed under the Act and an exact copy of the Adjudication Application dated XX/XX/XXXX, has been served by the Claimant on the Respondent in accordance with the Act.

Contract

Formation

1. Details of formation of arrangement / agreement / contract

1. The Claimant provided the Respondent with a quotation for the Contract works as per the Respondent’s request. – the Offer
2. The Respondent accepted the Claimant’s quotation – the Acceptance.
3. The Respondent instructed the Claimant to commence work on the Project, the Claimant commenced work on the Project – the parties demonstrated their Intention to be Bound by the Contract.

Consideration

1. The Claimant submits that all works / services included in the Payment Claim have been carried out / supplied / delivered / installed pursuant to the Contract, as per the Respondent’s instructions.
2. Furthermore, the Claimant, at the Respondent’s request, carried out variation works.
3. Please find attached [photos/emails or other evidence] of the Contract works and the variation works which were carried out pursuant to the Contract and in accordance with the Respondent’s instructions, these are behind Tab X.

Reference Date

1. As the Construction Contract does not make an express provision for a date when a progress claim can be made, pursuant to Section 8(1)(a) and Section 8(2)(b) of the Act the default of the Act applies; the Reference date is therefore the Last Day of the Named Month.
2. Pursuant to Section 8 of the Act the date for progress claims as per the Construction Contract is {insert date]
3. The Reference date is XXXX.

General Submissions

1. This Payment Claim is made pursuant to s8(1) of the Act which states: ‘a person who has undertaken to carry out construction work or to supply related goods and services under a construction contract is entitled to a progress payment’.
2. The Claimant submits that this adjudication application together with all supporting evidence demonstrates that all of the works / services that are the subject of the Payment Claim are 100% complete and defect free and have been charged at the agreed price / rates as per the Contract which is in accordance with industry / market rates. Therefore the Claimant is entitled to a progress payment.

Rate Of Interest Payable

1. The Claimant submits that in the absence of any express provision within the Contract in respect of interest rates applicable to late payments means that the default of the Act applies. Therefore as per s11 (2) (a) of the Act, the rate will be that prescribed under s 101 of the Civil Procedure Act (NSW) 2005.