If you are a contractor, subcontractor, or principal in Queensland’s construction industry, the Security of Payment regime is one of the most powerful — and most misunderstood — legal tools available to you. Get it right and you can recover payment in weeks. Get it wrong and you lose rights that cannot be recovered.
This guide covers everything Queensland construction industry participants need to know about the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) — including how adjudication works, what remedies are available, and the key lessons from recent Queensland Supreme Court decisions.
What Is the Security of Payment Act in Queensland?
Queensland’s security of payment regime is governed by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act), which replaced the Building and Construction Industry Payments Act 2004 (Qld). The BIF Act creates a fast-track mechanism for resolving payment disputes in the construction industry without the cost and delay of court proceedings.
At its core, the regime gives anyone who performs construction work — or supplies related goods and services — the right to make a payment claim and, if that claim is disputed or ignored, the right to have the dispute resolved by an independent adjudicator within tight statutory timeframes.
The regime is deliberately creditor-friendly. Its purpose is to maintain cash flow in the construction industry by ensuring that those who do the work get paid — quickly — rather than waiting months for disputes to wind through the court system.
Who Does the BIF Act Cover?
The BIF Act applies to construction contracts entered into in connection with construction work carried out in Queensland or related goods and services supplied in Queensland. A “construction contract” is broadly defined and covers:
- Building and civil engineering contracts
- Installation contracts (mechanical, electrical, plumbing, HVAC)
- Fit-out and refurbishment contracts
- Contracts for the supply of plant and materials to be incorporated into construction work
- Contracts for surveying, engineering, architectural, and project management services connected to construction work
The regime applies to all tiers of the contracting chain — head contractors, subcontractors, and sub-subcontractors all have access to the payment claim mechanism.
However, some contracts are excluded. Residential construction contracts where the owner resides (or intends to reside) in the building are excluded from the adjudication provisions under Part 3 of the BIF Act, though payment claims may still be made under Part 2.
How Does a Payment Claim Work?
Under the BIF Act, a payment claim is a formal written document served on the person who owes payment under a construction contract. To be a valid payment claim, the document must:
- Identify the construction work or related goods and services to which the claim relates
- State the amount of the payment claimed
- Request payment of the claimed amount
- Be endorsed with a statement that it is made under the BIF Act (this requirement distinguishes a BIF Act claim from an ordinary invoice)
Once a payment claim is served, the respondent has a limited time — typically 15 business days — to provide a payment schedule (also known as a payment response). The payment schedule must:
- Identify the payment claim to which it responds
- State the amount the respondent proposes to pay (the “scheduled amount”)
- If the scheduled amount is less than the claimed amount, explain why with sufficient detail
Failing to serve a payment schedule on time has severe consequences. A respondent who fails to provide a payment schedule by the due date becomes liable to pay the full claimed amount and loses the right to contest the claim in adjudication — or anywhere else without leave of a court. This is one of the regime’s sharpest teeth.
The Adjudication Process: A Step-by-Step Guide
If a respondent provides a payment schedule and the claimant is unhappy with the scheduled amount, the claimant may apply for adjudication. Here is how the process works:
Step 1: Choose an Authorised Nominating Authority (ANA)
Adjudication applications must be lodged with an Authorised Nominating Authority (ANA) — an entity authorised by the Queensland Building and Construction Commission (QBCC) to receive applications and appoint adjudicators. Queensland has several ANAs, including the QBCC itself, Master Builders Queensland, and the Housing Industry Association.
Step 2: Lodge the Adjudication Application
The adjudication application must be lodged within strict timeframes after the payment schedule is received (or after the payment schedule due date passes without one being served). The application must include:
- A copy of the payment claim
- A copy of the payment schedule (if one was served)
- The contract (or relevant parts)
- The claimant’s submissions, with all supporting documentation
Step 3: The Adjudicator Is Appointed
The ANA appoints an adjudicator who must be on the QBCC’s register of adjudicators. The adjudicator is required to accept or reject the appointment within 4 business days.
Step 4: Respondent’s Adjudication Response
Once the adjudicator accepts the appointment, the respondent has 5 business days to lodge an adjudication response — or longer if the adjudicator grants an extension. Critically, the respondent cannot raise new reasons for withholding payment that were not in the payment schedule. This is another significant trap for respondents who fail to prepare thorough payment schedules.
Step 5: The Adjudication Decision
The adjudicator must make a decision within 10 business days of receiving the adjudication response (or within the agreed extended period). The decision must include:
- The adjudicated amount (which may be nil)
- The date on which the adjudicated amount becomes payable
- The rate of interest payable on any amount
- The adjudicator’s reasons for the decision
Once the adjudication decision is made, the respondent must pay the adjudicated amount by the due date. If the respondent fails to pay, the claimant can obtain a debt certificate and register it as a judgment debt in the District Court — all without needing to commence separate court proceedings.
Challenging an Adjudication Decision: Tomkins v Starline and the Remittal Issue
One of the most significant Queensland security of payment decisions in recent years is Tomkins Commercial & Industrial Builders Pty Ltd v Starline Interiors Pty Ltd [2026] QSC 21, handed down by the Queensland Supreme Court in early 2026.
The key question in Tomkins was whether the Supreme Court, having found jurisdictional error in an adjudication decision, could remit the matter back to the adjudicator — even where the statutory time limit for making the decision had expired.
Previously, there was genuine uncertainty about this. The adjudication time limits under the BIF Act had consistently been treated as jurisdictional — meaning an adjudicator who makes a decision outside the time limit has no jurisdiction to do so and the decision is void. But what happens when the Court sets aside a decision for jurisdictional error? Does the expiry of the decision-making window mean the matter simply dies?
The Supreme Court held that remittal remains available. Section 101(3)(b) of the BIF Act — which permits the Court to make “appropriate orders” — is broad enough to allow remittal notwithstanding that the statutory decision timeframe has passed. Importantly, the Court “reset” the statutory clock, directing that the time for making the new decision run from the date of the remittal order rather than from the original application date.
The practical takeaway from Tomkins is significant: succeeding in the Supreme Court on jurisdictional grounds does not necessarily end the dispute. A respondent who successfully challenges an adjudication decision may find the matter remitted — and face a second adjudication on the same claim. This changes the litigation calculus for respondents considering judicial review applications under the BIF Act.
Grounds for Challenging an Adjudication Decision
Adjudication decisions can only be challenged in the Supreme Court on jurisdictional grounds. The adjudicator must have acted without, or in excess of, jurisdiction. Common grounds include:
- The payment claim was not a valid payment claim (e.g., failed to identify the work, not endorsed under the Act)
- The adjudication application was filed out of time
- The adjudicator considered material not permitted under the Act (such as new reasons raised by a respondent that were not in the payment schedule)
- The adjudicator made a decision after the statutory time limit had expired (though Tomkins now means this does not end the matter — remittal is possible)
- A denial of procedural fairness in the conduct of the adjudication
Importantly, merits review is not available. A party who disagrees with the adjudicator’s factual findings — for example, on whether the work was defective, or whether a variation was instructed — cannot appeal on those grounds. The adjudication decision is final on the merits, even if wrong. The only recourse on the merits is to commence separate court proceedings after the adjudication has been paid.
Retention Money Trust Accounts
One of the most important features of the BIF Act — and one that is frequently misunderstood — is the retention money trust account obligation.
Under Part 4A of the BIF Act, principals and head contractors who hold retention money from subcontractors are required to hold that money in a dedicated trust account maintained with an approved financial institution. The retention money cannot be mixed with general funds and cannot be used for any purpose other than payment to the subcontractor or as security against defects — as provided for in the contract.
This obligation applies to contracts above certain thresholds and must be complied with from the date the first retention amount is withheld. The QBCC has strong powers to investigate and enforce compliance, and failure to maintain a retention trust account is a serious offence.
For subcontractors who have had retention money withheld, the trust account obligation provides a significant protection — particularly in the event of the head contractor’s insolvency. Money held on trust is not available to the liquidator as general assets of the insolvent estate.
Project Bank Accounts
For certain Queensland government-funded construction projects, the BIF Act also requires the use of Project Bank Accounts (PBAs). PBAs are separate trust accounts through which payments flow from the principal to head contractors and then to subcontractors. The PBA framework is designed to ensure that subcontractors are paid correctly and on time, and that subcontractor funds cannot be misused by head contractors.
PBAs apply to State Government contracts above $1 million. The requirements include the establishment of a general trust account, a disputed funds trust account, and a retention money trust account. Non-compliance with PBA obligations can result in significant financial penalties.
Common Traps and How to Avoid Them
Over many years of acting in construction payment disputes, our team at Boss Lawyers has seen the same mistakes made repeatedly. Here are the most common traps — and how to avoid them.
Trap 1: Not Endorsing Payment Claims Under the BIF Act
A payment claim that does not include a statement that it is made under the BIF Act is not a valid BIF Act payment claim, regardless of how much detail it contains. Without this endorsement, the claimant cannot access the adjudication regime. Always ensure your claims are properly endorsed.
Trap 2: Failing to Respond to a Payment Claim on Time
A respondent who does not serve a payment schedule within the required timeframe loses the right to contest the claim entirely. The claimant can apply to court to recover the unpaid amount as a debt, and the respondent has no defence other than paying up. If you receive a document that might be a BIF Act payment claim — even if you are not sure — treat it as one and seek legal advice immediately.
Trap 3: Inadequate Payment Schedules
Even if a payment schedule is served on time, it must contain sufficient reasons for withholding payment. Those reasons are locked in — they cannot be supplemented or replaced in the adjudication response. A payment schedule that merely says “disputed” or “subject to defects” without specifics gives the respondent little to work with in adjudication. Get legal advice before serving a payment schedule on a significant disputed claim.
Trap 4: Leaving Adjudication Too Late
The timeframes under the BIF Act are strict and jurisdictional. Missing a deadline — for the adjudication application, for the adjudication response, or for serving the payment claim — can result in losing access to the regime entirely. The time limits are calculated in business days and can be shorter than they appear. Always calculate your deadlines carefully and seek legal advice before they expire.
Trap 5: Thinking Adjudication Is the End
As Tomkins confirms, a successful challenge to an adjudication on jurisdictional grounds does not necessarily end the dispute — it may simply reset it. More broadly, an adjudication decision is a provisional resolution of the payment dispute, not a final determination of the parties’ rights under the contract. The “pay now, argue later” nature of the regime means that the merits of the underlying dispute — defects, variations, delay damages — can still be resolved through litigation or arbitration after the adjudicated amount is paid.
FAQs: Security of Payment in Queensland
Q: Can I make a BIF Act payment claim even if I do not have a written contract?
Yes. The BIF Act applies to both written and oral construction contracts. However, without a written contract, establishing the terms of the agreement — including the contract price, payment terms, and scope of work — can be more difficult in adjudication. A verbal agreement combined with supporting documents (emails, quotes, invoices, site instructions) can still support a valid payment claim.
Q: How long does adjudication take?
The adjudication process is designed to be quick. From lodgement of the application to the adjudicator’s decision typically takes 3 to 6 weeks, compared to months or years for court proceedings. This speed is one of the key advantages of the regime for claimants.
Q: Can I claim interest under the BIF Act?
Yes. The adjudicator may award interest on unpaid amounts. The rate and basis for interest will depend on the contract terms and the circumstances of the non-payment.
Q: What happens if the respondent still does not pay after the adjudication decision?
If the respondent fails to pay the adjudicated amount by the due date, the claimant can obtain an adjudication certificate from the ANA and file it with the District Court as a judgment debt. The respondent cannot apply to have the judgment set aside based on the merits of the underlying dispute — the only grounds are that the adjudicated amount has already been paid, or that the adjudication certificate is not valid on its face. This makes adjudication a powerful collection tool.
Q: Does a respondent need to bring a cross-claim or can they set off damages against the adjudicated amount?
No. The BIF Act operates on a “pay now, argue later” basis. A respondent cannot resist payment of the adjudicated amount by claiming a set-off or cross-claim for defects or delay damages. Those claims must be pursued separately through court proceedings or arbitration. However, in those separate proceedings, the respondent may recover any amounts overpaid under the adjudication.
Q: What is the difference between the BIF Act and the QBCC complaints process?
The BIF Act adjudication regime and the QBCC complaints process are separate. Adjudication under the BIF Act is a fast-track payment dispute mechanism for recovering unpaid amounts. The QBCC complaints process addresses building defects, licence issues, and disputes about building work quality. Both may be relevant to a construction dispute, but they operate independently and have different procedures, timeframes, and remedies.
How Boss Lawyers Can Help
Boss Lawyers regularly acts for contractors, subcontractors, principals, and project owners in Queensland construction payment disputes. Whether you need to pursue a payment claim, respond to an adjudication application, challenge an adjudication decision in the Supreme Court, or navigate the retention money trust account obligations, our team has the experience to guide you through the process.
We also act in the broader range of building and construction disputes — from contract disputes and defects claims to commercial litigation in the Queensland courts. If your construction dispute involves insolvency issues — for example, where the head contractor or subcontractor has entered administration or liquidation — our insolvency lawyers work seamlessly with our construction team to protect your position.
Call us on 1300 267 711 or use our contact form to speak with a Brisbane construction lawyer today.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
