What is a Payment Claim? What Components Need to be Included to be Valid?
What is a Payment Claim?
A Payment Claim, as defined by s.14 of the Victorian Building and Construction Industry Security of Payment Act 2002 (‘SOP Act’), is a formal request for a progress payment made by a claimant who is entitled to such payment under a construction contract. This claim is a crucial step in the process, and several key components must be carefully addressed to ensure its validity.
Components of a Valid Payment Claim
According to Section 14 of the Act, a Payment Claim must include the following elements:
- Form and Information: The claim must be in the relevant prescribed form (if any) and contain any prescribed information (if any).
- Identification of Work: The claim must clearly identify the construction work or related goods and services to which the progress payment relates.
- Claimed Amount: It must indicate the amount of the progress payment that the claimant claims to be due, known as the “claimed amount.”
- Statement of Origin: The claim must state that it is made under the Building and Construction Industry Security of Payment Act 2002 Victoria.
Initiating a Claim
To kickstart a claim under the Act, the Payment Claim must be served on the party liable to make the payment. Strict adherence to the specified time frames in the Act is crucial for the success of an adjudication application.
Who is a Claimant?
A claimant is any party that has carried out construction work or supplied related goods and services, claiming entitlement to a payment under a construction contract. This includes subcontractors, suppliers, architects, engineers, and others involved in the construction process.
Identifying the Respondent
Properly identifying the respondent is critical for the validity of the Payment Claim. Incorrect names or ACN/ABN details may lead to complications in enforcing adjudication determinations.
Entitlement to Make a Payment Claim
Various parties, including contractors, subcontractors, suppliers, and consultants, are entitled to make a Payment Claim under the Act. The Act even covers construction work without a written contract, emphasizing its broad applicability.
What Work is Covered?
Construction work and related goods and services encompass a wide range of activities, from building work and civil engineering to professional services like architectural design and surveying.
Exclusions from the Act
While the Act has broad coverage, certain exclusions exist, such as contracts related to construction work carried out outside Victoria and claims for damages for breach of contract. These exclusions are crucial to understanding the limitations of the Act.
Claimed Amount
The claimed amount may include any amount that the respondent is liable to pay the claimant under section 29(4) but must not include any excluded amount. An adjudicator cannot determine an amount greater than the claimed amount. It’s essential to accurately quantify and describe the claimed amount in the Payment Claim.
Serving a Payment Claim
Proper service of the Payment Claim is vital. Methods include courier with a signed receipt, express mail with tracking, platinum post with a signature, fax (with evidence of transmittal), email (with delivery and read receipts), in-person delivery with a receipt, or any method specified in the construction contract.
Timeframes for Serving Payment Claim:
A payment claim for progress payment may be served within the contract-specified period or 3 months after the reference date, whichever is later. For final, single, or one-off payments, the claim must be served within the contract-specified period or 3 months after the reference date.
Limitations on Further Claims:
Once a payment claim for a final, single, or one-off payment has been served, no further payment claim can be served unless the claimed amount was not paid by the due date.
Restriction on Multiple Claims:
A claimant cannot serve more than one payment claim per reference date under the construction contract. However, a claimant can include unpaid amounts from previous claims.
