It is a part of everyday life that individuals, companies and businesses will enter into contracts to carry out construction and building works, or to supply related goods and services. Occasionally, a dispute may arise in relation to payment of such goods and services.

What is it and how does it work?

The Building and Construction Industry Security of Payment Act 2002 (Vic) (‘the Act’) is designed to streamline procedures within the construction and building industry by ensuring that any person who carries out work under a contract receives payment. The process is an efficient and cost-effective one, without the need for time-consuming and costly litigation. It gives statutory rights for on-going payment for any person who carries out work under a construction industry contract.

Who is covered by the Act?

The Act is aimed at protecting the rights of contractors, consultants, manufacturers and suppliers working within the construction industry to receive and recover progress payments for carrying out work and supplying goods and services. The Act operates in conjunction with any rights to receive progress payment under a contract. The exception to this is construction contracts for carrying out domestic building work, which are covered in the Domestic Building Contracts Act 1995 (Vic).

What types of work are covered by the Act?

The following construction work and supply of related goods and services is covered under the Act:

Building work
Civil engineering
Demolition
Electrical
Hire of plant or equipment
Landscaping
Maintenance
Architectural design
Surveying
Soil testing
Supply of building materials

How is a payment claim issued under the Act?

To make a payment claim under the Act, a claimant serves a payment claim on the party who is liable to pay for the construction work or related goods or services under the construction contract liable (‘the respondent’).

A payment claim must satisfy the following requirements:

It must be served by or on behalf of a claimant
It must contain the words “This is a payment claim made under the Building and Constructions Industry Security of Payment Act 2002 Victoria”
It must identify the construction work performed (which must be covered by the Act) and identify the respondent, and
It must stipulate the exact amount that is being claimed.

The respondent has 10 business days to respond to the claimant’s payment claim. This is done through a payment schedule. If the respondent does not respond within the required timeframe, or provides a payment scheduled within the 10 business days but the claimant does not accept the schedule, the claimant has the right to apply for adjudication.

Adjudication

Adjudication under the Act involves the determination of a payment claim dispute by a third party adjudicator, who is typically not a judge or lawyer. An adjudicator may seek further submissions from a party and will also give parties an opportunity to comment on submissions. The adjudicator will then review the evidence and the documentation that each party has submitted, and will then make a binding decision.

Is the Adjudicator’s decision final?

If the process has been carried out correctly as per the Act, there will be no grounds to challenge an adjudicator’s decision in court. However, if a party is able to demonstrate that natural justice or procedural fairness was denied or there was a jurisdictional error, a Court may set aside an adjudication determination. It is a good idea to speak with a lawyer to help ascertain whether you have reasonable prospects for success before challenging an Adjudicator’s decision.

How can Sharrock Pitman Legal help?

If you need to prepare a payment claim or draft a response to a payment claim, or if you require guidance on how to go through the process yourself, we can help you understand the requirements under the Act and can advise you on the process and your options. Please feel free to contact our Litigation team on 1300 205 506 or by email at litigation@sharrockpitman.com.au.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

For further information contact

Caroline Callegari

Caroline Callegari is an Associate Principal and leads our Disputes & Litigation team. She has an advisory and advocacy practice in the following areas: Commercial Litigation, corporate and personal disputes, debt recovery and, insolvency and bankruptcy matters. Caroline can be contacted on (03) 8561 3324.

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Directors liability for breach of contract

It is a part of everyday life that individuals, companies and businesses will enter into contracts to carry out construction and building works, or to supply related goods and services. Occasionally, a dispute may arise in relation to payment of such goods and services.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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Building and Construction Industry Security of Payment Act (Vic)

It is a part of everyday life that individuals, companies and businesses will enter into contracts to carry out construction and building works, or to supply related goods and services. Occasionally, a dispute may arise in relation to payment of such goods and services.

What is it and how does it work?

Who is covered by the Act?

What types of work are covered by the Act?

How is a payment claim issued under the Act?

Adjudication

Is the Adjudicator’s decision final?