No "payment dispute" without a "payment claim".
Justice Judith Kelly of the Northern Territory Supreme Court has held that, to be a valid payment claim under the Construction Contracts (Security of Payments) Act 2004 (NT), a claim for payment must comply with the requirements of the contract. A contractor made a claim for payment under a construction contract which did not comply with the contract, and the principal disputed that the amount was owing.
The contractor made an application for adjudication which was dismissed by the adjudicator under s 33(1)(a) on the ground the application was out of time. He ruled that the claim for payment was a “payment claim” under the Act although it did not comply with the contractual requirements for making a claim for payment, and that time for making an application ran from the time the principal disputed the amount claimed, thereby creating a “payment dispute” under s 8.
On a review under s 48, the contractor argued that there could be no “payment dispute” under s 8 unless there was a valid “payment claim” in accordance with the contract. The principal argued that time ran from the time the amount claimed was clearly disputed, whether or not the claim complied with the contract. Kelly J agreed with the contractor, applying K & J Burns Electrical Pty Ltd v GRD Group (NT) Pty Ltd (2011) 29 NTLR 1.
The upshot is that the contractor has a second chance of making a payment claim that complies with the contract. The claim would not be a repeat claim since the first one was invalid.