The Art of Serving Notices
Hi, there. Anthony from Contractors Debt Recovery back again with another instalment. Now what we want to talk about today is serving under the Security of Payment Act that follow up notice that follows a claim. As you would or should know by now when you serve a claim and the respondent does not send you a payment schedule within 10 business days, you have to serve another notice before you can go to adjudication. In New South Wales that’s called Section 17.2 Notice. In Victoria, it’s 18.2 Notice. In Queensland I think it’s Section 21.2 notice and so on around the other states depending on what section of the act is the equivalent. Now one of the biggest mistakes in the whole process is contractors do not send that notice at the appropriate time. They send it early. They send the payment claim, wait 10 business days, no payment schedule comes from the respondent and they send that notice immediately on the 11th business day.
And on many occasions that is too early but of course you don’t know that until you got to adjudication under Security of Payment. The adjudication looks at all the documents and throws the whole thing up, say the process wasn’t followed. I don’t have jurisdiction. Now let’s just clearly understand when you should or when you can serve these notices. So we’ve got here month 1, month 2, month 3 and month 4 approximately. Let’s say you serve a payment claim. You reference that under your contract is claims is going to be served on the 25th of the month for common list. Let’s adopt that. So I’ll serve my claim on the 25th and I need a payment schedule within 10 business days from the respondent which will take me to approximately the 8th. Approximately 8th of the following month that gap there being there 10 business days, more or less.
Now let’s say by the 8th you don’t get a payment schedule. Well what the acts around the country say is that a follow-up notice can only be served after the due dates of payment. I abbreviate that to DD4P. It can only be served after the due date of payment not after 10 business days, after the due date of payment. So the big issue for you to consider is under this contract when is payment due. Now many contract says claims in by the 25th, payment 30 days end of month which means that payment at the 25th here will be due at the end of month 2 there. There’s a due date for payment.
Now if that is the case then you can only serve the notice after the 30th of that month. So let’s say this is, let’s say March, April, May, June. So you serve your claim on the 25th of March. The due date for payment is the 30th of April. Let say you don’t get a payment schedule. You then have to sit on your hands and wait till the due date of payment passes 30th of April. And here then you can serve your notice. And in most jurisdiction you have a window of 20 business days after the due days of payment in which to serve that notice. You can serve it on the first day available or anytime within that 20 business day period. What you must know is your due date of payment.
Now in most jurisdictions if there’s no agreed of due dates of payments then the due dates of payment is 10 business days after the claim is received which means that the date upon which the payment schedule is due is also the due date of payment. That means in that scenario, sure you can send that notice immediately after the next business day after the due date of payment because the 10 business days in which the schedule is due is also the 10 business days in which payment is due. Now that may apply but often in the contract you’ll have 45 days in a month, 30 days after the payment claim is served. So if you served on the 25th your claim and your terms at 30 day then it’s due on the 25th of April.
So you need to wait till the 26th of April or thereabout before you can serve that next notice. You have to wait till the after the due dates for payment. Now very common mistake contractors wait 10 days and regardless of the due date of payment the next day they just serve that notice and go on their merry way and the whole then the whole thing gets thrown out. So the purpose of this talk is just to make you aware that you have to wait till the due date of payment and then serve those notices only after the due date.
So I hope I’ve made that clear with that scribbly diagram but it’s a very very important part of using the Security of Payment Act around Australia. If you got any questions, give us a call on the number at the bottom of the screen or otherwise we will see you next time. Cheers.