Practitioners need to be alert to several traps in the Act. First, the definition of “business day” in section 4(1) excludes not only weekends and public holidays but also all days between 22 December in any year and 10 January in the following year (inclusive). This is a 20-day period over summer when many construction sites close. Deadlines falling in that period are effectively extended. Adjudication timeframes (e.g. 15 business days for a payment schedule, 10 business days for an adjudication response) will be significantly impacted if the calculation straddles that period.
Second, section 68 prohibits a corporation in liquidation from making a payment claim or taking any action under Part 3 to enforce a payment claim, including adjudication or recovery proceedings. Any existing adjudication application is automatically withdrawn if the claimant becomes a corporation in liquidation. This is a harsh provision - liquidators cannot use the statutory adjudication process for pre-liquidation work.
Third, the consequences of failing to give a timely payment schedule are severe: the respondent becomes liable to pay the claimed amount on the due date (section 26), cannot make an adjudication response (section 34(3)), and cannot apply for adjudication review (section 39(3)(a)). The respondent also cannot raise in later proceedings any defence under the construction contract (section 27(3)). Even if the claimant obtains judgment in debt recovery, the respondent is barred from cross-claim or defence under the contract.
Fourth, the right to suspend work under section 62 cannot be exercised while an adjudication review application made by the respondent has not been determined (section 62(2)). This means a claimant who wins at adjudication but faces a respondent’s review application must wait until the review is resolved before suspending.
Fifth, the retention money trust obligations under Part 4 do not apply where the party for whom work is carried out is a government party (section 70(1)(a)). Government entities are also exempt from the requirement to set up trust accounts. But private sector principals and head contractors must hold retention money on trust from the retention money trust commencement date until the trust end date (section 71). Failure to pay into a trust account is an offence with a $50,000 fine (section 87). There is no grace period for setting up the account - it must be established within 10 business days after the contract is entered into (or 20 business days if it later becomes subject to Part 4) under section 74(2). However, if the retention money is not money retained from amounts payable but separately paid as security, the account must be established before the money is paid (section 74(3)).
Sixth, a notice-based time bar provision is not automatically void; it only has no effect if declared unfair in a particular case (section 16). The party alleging unfairness bears the onus and the adjudicator, court, arbitrator or expert must consider specific factors, including the irrebuttable presumption that the parties have read and understood the contract and the rebuttable presumption that the required party has the competence of a reasonably competent contractor. The provisions of any related contract must not be taken into account (section 16(7)).
Seventh, when seeking substitution of performance security (section 59), the claimant must provide a draft compliant performance bond with the payment claim. The adjudication application must then be accompanied by an executed compliant performance bond from an authorised issuing institution. The bond must be unconditional, irrevocable, non-expiring, and meet credit rating requirements (section 60). If the bond does not comply, the substitution right is not affected if there are multiple bonds and the others comply (section 60(2)). However, substitution is not available if the retention money is held by a third party (section 61(4)).
Eighth, section 111(2)(d) voids any contract provision "that may be reasonably construed as an attempt to deter a person from taking action under this Act." This is very broad and could catch confidentiality clauses, penalty clauses, or any provision that discourages making a payment claim or adjudication.
Ninth, the adjudicator’s determination can be corrected for clerical mistakes, accidental slips, material arithmetic errors or material mistakes in description (section 38(7)). But otherwise the determination is final subject to review and judicial review for jurisdictional error only. A party cannot appeal on the merits.
Tenth, the Act’s staged commencement means that different provisions apply depending on when the construction contract was entered into. Contracts entered into before 1 August 2022 (for most operative provisions) remain governed by the Construction Contracts (Former Provisions) Act 2004. Practitioners must check the exact commencement date of each provision relevant to their client’s contract.