If you are a contractor, subcontractor, or supplier in Queensland’s building and construction industry, getting paid on time is not just a cash flow issue — it is a survival issue. The Building Industry Fairness (Security of Payment) Act 2017 (BIFA) was enacted to address exactly this problem, providing a statutory framework to ensure that those who perform construction work or supply related goods and services receive timely payment.
At Boss Lawyers, we act for contractors, subcontractors, principals, and developers across Queensland on security of payment disputes. This guide provides a practical overview of how BIFA works and what you need to know to protect your payment rights.
What Is BIFA and Why Does It Matter?
BIFA replaced the former Building and Construction Industry Payments Act 2004 (BCIPA) and introduced significant reforms to how payment disputes are handled in Queensland’s construction industry. The Act applies to construction contracts — whether written or oral — for carrying out construction work or supplying related goods and services in Queensland.
The core purpose of BIFA is straightforward: ensure progress payments flow down the contractual chain. When a head contractor gets paid, subcontractors should get paid. When work is done, invoices should be honoured. BIFA provides the mechanisms to enforce this principle.
Critically, BIFA applies regardless of what your contract says about dispute resolution. Even if your contract contains an arbitration clause, you still have the right to make a payment claim and pursue adjudication under the Act.
Who Can Make a Payment Claim Under BIFA?
Any person who has carried out construction work or supplied related goods and services under a construction contract is entitled to a progress payment. This includes:
- Head contractors claiming against principals or developers
- Subcontractors claiming against head contractors
- Suppliers of construction materials
- Consultants who provide related services (in certain circumstances)
The entitlement to a progress payment arises on and from each reference date under the contract. If the contract does not provide for reference dates, the Act implies them — generally the last business day of each month.
How to Make a Valid Payment Claim
A payment claim must meet specific formal requirements under BIFA. Getting these wrong can be fatal to your claim. A valid payment claim must:
- Be in writing
- Identify the construction work or related goods and services to which the progress payment relates
- State the amount of the progress payment claimed
- State that it is made under BIFA
- Be served on the respondent
The requirement that the claim must state it is made under BIFA is often overlooked. A standard invoice that does not reference the Act will not qualify as a payment claim, even if it otherwise contains all the necessary information.
Practical tip: Include a clear statement on every payment claim: “This is a payment claim made under the Building Industry Fairness (Security of Payment) Act 2017 (Qld).”
Payment Schedules: The Respondent’s Obligation
Once a payment claim is served, the respondent has 15 business days (or the period specified in the contract, if shorter) to provide a payment schedule. The payment schedule must:
- Identify the payment claim to which it relates
- State the amount of the payment the respondent proposes to make (the scheduled amount)
- If the scheduled amount is less than the claimed amount, indicate why and provide reasons for withholding payment
Failure to provide a payment schedule is serious. If no payment schedule is served within the required timeframe, the respondent becomes liable to pay the full claimed amount by the due date. The claimant can then recover this as a debt due in court, or proceed to adjudication.
Adjudication: Rapid Dispute Resolution
Adjudication is the centrepiece of the BIFA regime. It provides a rapid, interim determination of payment disputes — typically resolved within weeks rather than the months or years that litigation can take.
A claimant may apply for adjudication if:
- The respondent has served a payment schedule but the scheduled amount is less than the claimed amount
- The respondent has failed to serve a payment schedule
- The respondent has failed to pay the scheduled amount by the due date
The adjudication application must be made to an Authorised Nominating Authority (ANA), which will appoint an adjudicator. In Queensland, the Queensland Building and Construction Commission (QBCC) is the registrar for adjudication matters.
Key Timeframes
The adjudication process moves quickly:
- Adjudication application: Must be made within 20 business days after the respondent provides a payment schedule (or within 20 business days after the due date, if no schedule was provided)
- Adjudication response: The respondent has 15 business days after receiving a copy of the application to lodge a response (but only if a payment schedule was provided)
- Decision: The adjudicator must decide within 10 business days after the response period ends (extendable by 15 business days with the claimant’s consent)
The adjudicator’s decision is binding on an interim basis. It can be enforced as a judgment debt and does not prevent either party from pursuing their rights under the contract through other means (such as litigation or arbitration) at a later stage.
Trust Account Obligations
One of BIFA’s most significant innovations is the introduction of project trust accounts. These are being progressively rolled out across the Queensland construction industry and are designed to ensure that money earmarked for subcontractors actually reaches them.
Key trust account obligations include:
- Project trust accounts are required for certain government and private sector projects above prescribed thresholds
- The head contractor must establish and maintain a project trust account for each eligible project
- All progress payments received from the principal must be deposited into the trust account
- Payments to subcontractors must be made from the trust account
- The head contractor is the trustee and has fiduciary obligations in relation to trust funds
Breach of trust account obligations can result in serious penalties, including fines and, in some cases, personal liability for company directors.
Common Mistakes That Can Derail Your Claim
In our experience acting for claimants and respondents in security of payment disputes, these are the most common errors we see:
- Not referencing BIFA on the payment claim. This is a fundamental validity requirement.
- Missing the reference date. A payment claim can only be served on or after a reference date. Serving it too early means it is premature and invalid.
- Serving more than one claim per reference date. Under BIFA, only one payment claim can be served in respect of each reference date.
- Late adjudication applications. The 20 business day timeframe is strict. Missing it means losing the right to adjudicate that particular claim.
- Inadequate reasons in the payment schedule. Respondents who provide a payment schedule with vague or insufficient reasons for withholding payment may be barred from raising those reasons in the adjudication.
Enforcement of Adjudication Decisions
An adjudication decision in the claimant’s favour can be enforced as follows:
- The claimant can request an adjudication certificate from the ANA
- The certificate can be filed as a judgment of the court
- Standard debt recovery and enforcement mechanisms then apply
Additionally, if the respondent fails to pay an adjudicated amount, the claimant may be entitled to suspend work under the contract until payment is received. This is a powerful remedy — but it must be exercised carefully and in accordance with the Act’s requirements to avoid a claim for wrongful suspension.
Frequently Asked Questions
What is the time limit for making a payment claim under BIFA?
A payment claim must be served within 6 months after the construction work was last carried out or the related goods and services were last supplied under the contract.
Can I make a payment claim if I don’t have a written contract?
Yes. BIFA applies to construction contracts whether written, oral, or partly written and partly oral. However, proving the terms of an oral contract can be more challenging.
What happens if no payment schedule is provided?
If the respondent fails to provide a payment schedule within the required timeframe, they become liable to pay the full claimed amount. The claimant can either recover the amount as a debt in court or proceed to adjudication.
Is an adjudication decision final?
No. An adjudication decision is interim and binding. Either party can still pursue their full contractual rights through litigation or arbitration. However, the adjudicated amount must be paid in the meantime.
How Boss Lawyers Can Help
Security of payment disputes require precision and speed. The timeframes under BIFA are strict, and procedural errors can be fatal to your claim or defence. Whether you are a contractor preparing a payment claim, a respondent needing to draft a payment schedule, or a party facing adjudication, our building and construction team can assist at every stage of the process.
Contact Boss Lawyers on 1300 267 711 or visit our Brisbane CBD office for an initial consultation.
About the Author
Mark Harley is the Principal of Boss Lawyers, a commercial law firm based in Brisbane CBD. With extensive experience in building and construction disputes, Mark advises contractors, subcontractors, and principals on their rights and obligations under BIFA and related legislation.
Disclaimer: This article provides general information only and does not constitute legal advice. The information is current as at the date of publication. You should obtain specific legal advice about your particular circumstances before acting on any of the matters discussed in this article.
