Christmas blackout periods under the BIF Act (Qld) – Your ‘out of office’ guide to Christmas payment claims

As the Christmas period fast approaches, it is important to remember your contractual deadlines and the impending effects the colloquial “Christmas blackout period” has on the timeframes within which the building and construction industry participants must apply the provisions of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).

For this Christmas/New Year period, the Christmas blackout period under the BIF Act will run from Wednesday, 22 December 2021 through until Monday, 10 January 2022, inclusive.

What this means is that, for any actions to be taken under the BIF Act, whether that be an adjudication application, adjudication response or an application for judgment, the dates of and between 22 December 2021 and 10 January 2022, are not a “business day” for the purposes of the BIF Act.

The BIF Act Christmas blackout period may also impact your rights and remedies under your construction contracts, with some contracts defining business day as to “have the same meaning as under the BIF Act”. In those circumstances, the blackout period may apply in the submission of extensions of time, variations or claims under the contract. Where the definition of business day is not limited to the meaning under the BIF Act, the submission of, or response to, a claim for an extension of time or a variation, may fall within the blackout period.

Accordingly, industry participants are strongly encouraged to consider any significant deadlines which fall in or around this period, including due dates for payment, the delivery of payment claims and payment schedules, and the submission of notices for claims and responses to same to ensure that a Christmas delivery does not result in New Year spoils.

‘Business Days’ under the BIF Act

The term ‘business days’ is used to impose a number of significant timeframes in the BIF Act, such as:

  • the time for responding to a payment claim (s 76);
  • due date for payment (s 73); and
  • the time for applying for (and responding to) adjudication (s 79).

Schedule 2 of the BIF Act provides that a business day does not include any of the following days:

  • Saturday or Sunday;
  • a public holiday, special holiday or bank holiday (in the relevant place for service); and
  • any day occurring within any of the following periods –
    • 22 to 24 December;
    • 27 to 31 December; and
    • 2 to 10 January.

Accordingly, all days between 22 December 2021 and 10 January 2022 (inclusive) are ‘non-business days’ under the BIF Act.

What this means, for example, is that if you issue a payment claim on Tuesday, 21 December 2021:

  • under the BIF Act, the respondent will still have 15 ‘business days’ to provide you with a payment schedule (on the assumption that the relevant contract does not provide for a shorter period);
  • with the Christmas blackout period running from 22 December 2021 through until 10 January 2022, the respondent will have until Tuesday, 1 February 2022 to provide you with a payment schedule under the BIF Act (taking into account the Australia Day public holiday on 26 January 2022).

Christmas blackout period may also apply to the due date for payment

A progress payment under a construction contract becomes payable on the day that is 10 business days after the payment claim, or on the day on which the payment becomes payable under the contract pursuant to section 73 of the BIF Act.

If the contract is silent, or the relevant payment provision under the contract is void under the BIF Act or the Queensland Building and Construction Commission Act 1991 (Qld), then the default payment terms for a progress claim under the BIF Act is 10 business days.

In those circumstances, the Christmas blackout period will again apply. For example, if a payment claim is issued on Tuesday, 21 December 2021, then the payment claim will not fall payable under the BIF Act until 24 January 2022.

Commencement of Project Trust Account Measures during the Blackout Period

In an earlier update, we discussed the confirmed commencement dates for “Project Trust Accounts” (PTAs) (formerly project bank accounts), which are the trust accounts that all payments from the principal to the head contractor must be paid into, with subcontractors being the primary beneficiary for the monies held.

On 1 January 2022, within the Christmas blackout period, the next phase of the PTA scheme will commence, with PTA requirements being extended to the private sector and local government building contracts valued at $10 million or more. With this commencement date fast approaching, we strongly encourage industry participants to become familiar with the impending changes, before the blackout period commences.

Key Takeaway

This update is a friendly reminder to not be complacent as Christmas draws near, particularly in light of the PTAs commencing on the dawn of 2022. Failure to comply with the BIF Act within the legislated timeframes can have serious consequences, including judgment and fines.

Key contacts:

Stephen Pyman – Director

 

 

Emma Ward – Senior Associate

 

 

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