Every day in Australia individuals and businesses enter into contracts, whether oral or written, for building and construction work. Many of these contracts result in disputes about payment.
These payment disputes put business owners and businesses under financial and emotional pressure that distracts the disputing parties from focusing on their core business.
Rather than having to institute time consuming and costly court proceedings to resolve a payment dispute, the Construction Contracts Act 2004 (CCA) provides a quick and effective process whereby a payment dispute can be determined by rapid adjudication.
What is adjudication?
Adjudication is the process by which an independent qualified professional reviews the evidence and legal argument put forward by parties and makes a legally binding decision which determines the rights and obligations of the disputing parties.
What types of disputes can be adjudicated under the CCA?
The CCA covers most building work in Western Australia including, civil engineering, earthworks, renovation, repair, demolition work, electrical work, supplying building materials, hiring plant and equipment, landscaping, maintenance and professional services such as architectural design and surveying. The CCA does not apply to mining works.
How to make a payment claim
A payment claim for building or construction work done or for the supply of goods and/or services must be made in accordance with the written contract (if any). Where there is no written contract but there is an oral contract in place, a payment claim must satisfy certain requirements.
Where a payment claim is disputed, rejected or not paid in full or on time, a payment dispute has arisen, and you can use the process under the CCA to resolve the payment dispute.
What happens next?
If a finding is made by the adjudicator that payment must be made by one of the disputing parties, this determination is a legally enforceable debt. Under section 43 of the CCA the successful party may apply to a court for leave to have that determination enforced as a judgment.
This means that the rapid adjudication process can be an effective way to obtain payment for building or construction work without having to go through court proceedings.
How to prevent payment disputes in the first place
Try to avoid payment disputes from arising by maintaining strong documentation at every stage of your building or construction project, systematically collecting debts owed to you and taking decisive action to recover debts that remain overdue.
Contact our litigation and dispute resolution team on (08) 9228 2881 or reception@equitaslawyers.com.au if you need to make or reply to a payment claim or recover an outstanding debt.
