This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
Key Takeaways
- A payment schedule is a mandatory formal response to a payment claim under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) — it must be served within 15 business days of the payment claim (or less if your contract requires).
- If you fail to serve a payment schedule on time, you become liable to pay the full claimed amount as a debt — and you lose the right to dispute it in adjudication proceedings.
- A payment schedule must state what amount you will pay and explain the reasons for any amount withheld — a bare refusal is legally insufficient and carries the same risk as no schedule at all.
- The schedule locks in your defence: you generally cannot raise new reasons in adjudication that were not included in your original payment schedule (s88 BIF Act).
- A well-drafted payment schedule is not just defensive — it is your primary opportunity to frame the dispute in your favour before adjudication begins.
When a subcontractor, contractor, or supplier serves a payment claim under the BIF Act, the respondent — typically the principal, head contractor, or developer — must take one of two paths: pay the claimed amount, or serve a payment schedule disputing it.
The payment schedule is one of the most consequential documents in Queensland construction law. Get it wrong — or fail to serve it at all — and the consequences can be severe: liability for the full claimed amount as a judgment debt, loss of adjudication rights, and a procedural disadvantage that is nearly impossible to reverse. Get it right, and you have a structured, disciplined platform from which to contest an inflated or unfounded payment claim.
This guide explains what a payment schedule is, when it must be served, what it must contain, common mistakes to avoid, and how it feeds into adjudication and enforcement under the BIF Act.
What Is a Payment Schedule?
A payment schedule is a written document served by a respondent in response to a payment claim. It is governed by Division 2 of Part 3 of the BIF Act.
A valid payment schedule must:
- Identify the payment claim to which it relates;
- State the scheduled amount — the amount the respondent proposes to pay;
- If the scheduled amount is less than the claimed amount, state the respondent’s reasons for withholding the difference.
The scheduled amount can be anything from the full claimed amount to zero. A nil schedule — disputing the entire payment claim — is permitted, but the reasons must be clear and substantiated.
When Must a Payment Schedule Be Served?
The BIF Act imposes a strict deadline. Under section 68, a respondent must serve a payment schedule within 15 business days of receiving the payment claim — unless the relevant construction contract specifies a shorter period, in which case the shorter period applies.
This is a hard deadline. There is no discretion, no extension, and no forgiveness for administrative error. Courts and adjudicators apply the deadline strictly — and for good reason. The BIF Act is designed to ensure rapid cash flow through the construction chain. Permitting late payment schedules would defeat the purpose of the legislation.
What Counts as “Receipt” of a Payment Claim?
Receipt is determined by the delivery method specified in the contract and the BIF Act. Common delivery methods include:
- Email: Receipt is typically deemed when the email enters the recipient’s mail server — not when it is opened. If your contract specifies email delivery, the clock starts on receipt, not reading.
- Post: Under s172 of the BIF Act, postal delivery is deemed on the second business day after posting (for Queensland addresses).
- Personal service: Receipt is immediate.
- Electronic delivery through a platform (e.g., Procore, Aconex): Check your contract — many construction contracts now specify that upload to a project management platform constitutes service.
If you are uncertain when the 15-business-day clock started, get legal advice immediately. Waiting to resolve the uncertainty is the worst possible approach.
What Happens If You Do Not Serve a Payment Schedule?
The consequences of failing to serve a payment schedule within the required period are severe and largely unrecoverable.
1. Liability for the Full Claimed Amount
Under section 69 of the BIF Act, if a respondent does not pay the full claimed amount by the due date AND has not served a payment schedule, the claimant can either:
- Apply for adjudication of the payment claim; or
- Recover the full claimed amount as a debt in a court proceeding — without going through adjudication at all.
The court enforcement option is powerful. It allows the claimant to obtain judgment for the full claimed amount without the respondent having any opportunity to dispute the merits of the claim. In a section 69 proceeding, the respondent’s only defences are extremely narrow (essentially limited to procedural defects in the payment claim itself).
2. Loss of Adjudication Rights
If the claimant proceeds to adjudication (rather than taking the section 69 debt recovery route), the respondent who failed to serve a payment schedule cannot lodge an adjudication response under section 79 of the BIF Act. The adjudicator proceeds on the basis of the payment claim alone. The outcome is almost invariably an award in the claimant’s favour for the full claimed amount.
3. Rapid Enforcement
Once an adjudicator’s decision or section 69 judgment is obtained, the claimant can enforce it as a judgment of the relevant court — including by registering caveats over property, issuing execution writs, and applying for charging orders. The BIF Act’s enforcement pathway is fast and effective, precisely because it is designed to defeat delays.
What Must a Payment Schedule Contain?
Beyond the minimum statutory requirements, a well-drafted payment schedule should address the following elements:
1. Identification of the Payment Claim
Clearly identify the payment claim by reference to the claim number, date, and the contract under which it was served. This is procedurally important — an adjudicator must be able to confirm which claim the schedule responds to.
2. The Scheduled Amount
State the amount you propose to pay. This is the scheduled amount. It can be:
- The full claimed amount (if you accept the claim in full);
- A partial amount (if you accept part and dispute the rest); or
- Nil (if you dispute the entire claim).
Note: stating a scheduled amount does not obligate you to pay it immediately — the payment schedule is a procedural step, not an admission or agreement to pay. The dispute about the correct amount is resolved in adjudication or court proceedings.
3. Reasons for Withholding
This is the most critical element. For every dollar you propose to withhold, you must explain why. Common reasons include:
- Work not performed: Specific items claimed were not completed or not completed to the required standard;
- Variations not approved: The claim includes variations that were not validly directed or approved under the contract;
- Defective work: Identified defects reduce the value of the claimed work — quantify and reference contract requirements;
- Liquidated damages: The respondent is entitled to deduct liquidated damages for delay — reference the delay event and the rate specified in the contract;
- Back-charges: Costs the respondent has incurred due to the claimant’s default (e.g., rectification work, overtime, third-party costs);
- Prior overpayments: Amounts already paid that exceed the true value of work completed to date;
- Contractual set-off rights: Any other amounts owed by the claimant to the respondent under the contract.
Each ground should be supported by reference to the contract provision it relies on, and — where possible — quantified in dollar terms. An adjudicator will scrutinise the quality of your reasons. Vague assertions (“work was defective”) without substantiation will carry little weight.
4. The Lock-In Effect: s88 of the BIF Act
One of the most important — and least understood — aspects of the payment schedule is its lock-in effect in adjudication.
Under section 88 of the BIF Act, a respondent who proceeds to adjudication can only raise reasons for withholding payment that were stated in the payment schedule. You cannot introduce new reasons in your adjudication response that were not already in your schedule.
This rule has two critical implications:
- If you discover a ground for withholding after you serve your payment schedule but before adjudication, you generally cannot use it — unless you can establish that the ground was impliedly included in the schedule or could not reasonably have been discovered earlier.
- Courts have enforced this rule strictly. In Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 (applying the equivalent NSW provision), the Court of Appeal confirmed that the payment schedule acts as a binding pleading of the respondent’s defence.
The practical consequence: your payment schedule must be comprehensive. Every ground you may want to rely on in adjudication must be included, even if you have limited time to fully articulate it at the schedule stage. You can develop and elaborate in the adjudication response — but you cannot introduce entirely new grounds.
Common Mistakes Respondents Make
- Missing the deadline. The most catastrophic error. Once the 15-business-day window closes, the consequences are automatic and largely irreversible.
- Bare refusal without reasons. Serving a schedule that states “nil — all amounts disputed” without any explanation of the basis for withholding. Adjudicators and courts treat this as an inadequate schedule, which risks the same outcome as no schedule at all.
- Incomplete identification of grounds. Serving a schedule that addresses some disputed items but inadvertently omits others. The s88 lock-in means those omitted grounds are lost for adjudication purposes.
- Quantifying the wrong amounts. Understating or overstating withheld amounts in the schedule creates problems in adjudication — particularly where liquidated damages or back-charges are involved.
- Ignoring contract timeframes. Some construction contracts specify payment schedule timeframes shorter than 15 business days (commonly 5–10 business days). Always check your specific contract first.
- Treating the schedule as preliminary. Respondents who treat the payment schedule as a rough first pass — intending to “fix it up” in the adjudication response — are exposed to serious risk. The schedule must be as thorough as the time constraints allow.
The Payment Schedule in the Broader BIF Act Process
The payment schedule is Step 2 in the BIF Act payment dispute process. Here is how it fits:
- Step 1: Claimant serves a payment claim (identifying the contract, work performed, and amount claimed);
- Step 2: Respondent serves payment schedule within 15 business days (or shorter contract period);
- Step 3: If the scheduled amount is less than the claimed amount, the claimant may apply for adjudication (within 10 business days after the later of payment becoming due or the payment schedule being served);
- Step 4: The claimant lodges an adjudication application with a registered authorised nominating authority (ANA);
- Step 5: The respondent serves an adjudication response (within 5 business days of receiving the adjudication application — or 2 business days where no payment schedule was served, if adjudication was permitted);
- Step 6: Adjudicator makes a determination (within 10 business days after receiving the adjudication response);
- Step 7: If the respondent does not comply with the adjudicator’s decision, the claimant can suspend work and enforce as a judgment.
The payment schedule at Step 2 is the foundation of the respondent’s entire position in this process. Every step that follows — adjudication response, enforcement proceedings, court review — is built on what the schedule contains (or fails to contain).
How Boss Lawyers Can Help
Preparing or responding to a payment claim under the BIF Act requires specialist knowledge of the Act, your contract, and the adjudication process. Our construction lawyers Brisbane at Boss Lawyers regularly advise principals, head contractors, and subcontractors on payment disputes, adjudication strategy, and BIF Act compliance.
If you have received a payment claim and need to serve a payment schedule — or if you have received a payment schedule and are considering adjudication — contact our commercial litigation lawyers Brisbane for urgent advice. Payment claim deadlines are not forgiving.
Call Mark Harley on 1300 267 711.
Frequently Asked Questions
What is a payment schedule under the BIF Act in Queensland?
A payment schedule is a formal written response to a payment claim served under the Building Industry Fairness (Security of Payment) Act 2017 (Qld). It must be served within 15 business days of receiving the payment claim (or a shorter period if the contract specifies one). The schedule must state how much of the claimed amount the respondent will pay, and for any amount withheld or disputed, it must explain why.
What happens if you don’t serve a payment schedule on time?
If you fail to serve a payment schedule within the required timeframe, you become liable to pay the full claimed amount as a debt due under section 69 of the BIF Act. The claimant can then either enforce that debt as a judgment without adjudication, or proceed to adjudication. You also lose the right to contest the amount claimed in adjudication proceedings. The consequences of missing the deadline are serious and essentially unrecoverable.
Can a payment schedule dispute the claimant’s entitlement entirely?
Yes, a payment schedule can schedule a nil amount — meaning you dispute the entire payment claim. But the schedule must state the reasons for withholding each portion of the claimed amount. A bare refusal without reasons will not satisfy the Act’s requirements and risks being treated as no payment schedule at all.
Can a payment schedule raise set-off or cross-claims?
A payment schedule can identify amounts that the respondent claims are owed to them (such as liquidated damages, defect costs, or back-charges) as reasons for withholding payment. However, the BIF Act adjudicator can only determine what is payable under the Act — they cannot determine rights and liabilities that go beyond the payment claim. If set-off and cross-claim rights exceed the payment claim amount, they may need to be pursued in separate court proceedings.
How long should a payment schedule be?
There is no prescribed length, but the payment schedule must contain sufficient detail to allow the claimant to understand what is disputed and why. A schedule that is vague, conclusory, or fails to identify the basis for withholding will be inadequate. For a complex payment claim, a detailed schedule with specific reference to contract provisions, delay events, and defect evidence will perform far better in adjudication than a brief summary document.
This article was prepared by Mark Harley, Principal Solicitor at Boss Lawyers (17+ years’ experience in commercial litigation and construction law disputes). It is general information only and does not constitute legal advice. For advice specific to your circumstances, contact Boss Lawyers on 1300 267 711 or via bosslawyers.com.au.
