Responding to a payment claim under the SOP Act

If you receive a payment claim under the SOP Act, you may respond to a payment claim in one of two ways:

• If you agree with the payment claim, pay the amount claimed in full, on or before the due date.
• If you do not agree to pay the full amount by the due date, give the claimant a payment schedule within 10 business days (or sooner, if the contract sets a shorter deadline) setting out what you are willing to pay and why it is different from the amount claimed.

If you fail to do either of those things, the claimant may apply for adjudication or apply to a court to enforce payment. The claimant may also suspend work or the supply of goods and services under the contract until payment is made.

A ‘pay when paid’ provision in a construction contract has no effect. You cannot delay paying a payment claim because you are waiting to be paid by someone else under another contract.

Making a payment schedule

A payment schedule is a reply to a payment claim when you do not agree to pay the amount claimed by the due date. It states how much you will pay the claimant and why.

Required information

The payment schedule must:

• identify the payment claim to which the payment schedule relates
• identify the amount (if any) that the respondent proposes to pay ('the scheduled amount')
• provide any reason why the scheduled amount is less than the claimed amount, including any reason why the respondent may be withholding payment

10 business day deadline

You have 10 business days after being served with the payment claim to serve the payment schedule on the claimant, unless the contract allows less time.

The 10 business day deadline refers to when the payment schedule must be ‘served’. How it is served determines when it is served. It may be served in any of the following ways:

• the manner of service provided by the contract, if reasonably practicable
• delivering it to the claimant – it is served when it is delivered to the claimant
• leaving it at the claimant‘s ordinary place of business – it is served when it is left at that address with a person who appears to be employed by the business
• sending it by post, addressed to the claimant, to the claimant’s ordinary place of business – it is served 7 business days after the day it is posted, or if delivered earlier (for example, by registered post) it is served on that earlier day
• in any other manner instructed by the claimant as an acceptable manner for service.

If you miss the deadline, you become liable to pay the full amount claimed. The claimant can apply to a court to enforce payment or apply for adjudication.

Failure to pay or provide a payment schedule

If you do not provide a payment schedule and don’t pay on time, the claimant can go to court to enforce payment as a debt or apply for adjudication. The claimant may also suspend work or the supply of goods and services under the contract until payment of a payment claim is made. For more information on the actions a claimant can take, see Options if a respondent doesn’t pay the amount claimed or respond.

If you fail to provide a payment schedule in response to a payment claim, the claimant must give you written notice of their intention to apply for adjudication before applying for adjudication. You then have 5 business days to provide a payment schedule. The adjudication may still proceed whether you do or do not provide a payment schedule within the 5 business days.

If the claimant applies for adjudication, a respondent who has not provided a payment schedule may not submit an adjudication response.

Resource material