What happens after the adjudicator makes a decision?

Tuesday, 15 April 2008

The Act says that -
a) The adjudicator must make a decision [s26]
b) The respondent is required to pay any adjudicated amount on or before 5 business days after the date on which the adjudicator's decision is served on the respondent (or as decided) [s29]
c) The parties are jointly and severally liable for the adjudication fees [s34,35]
d) The claimant and respondent are each liable to contribute to the adjudication fees in equal proportions, or in proportions that the adjudicator decides. [s34,35]
e) The adjudicator may refuse to communicate the decision until the fees are paid [s35.5]

What does this mean in practice -

The parties will not know their proportion of the fees until the decision is released.  Most respondents show little interest in paying for or releasing a decision.  It is usually the applicant who wants to know the outcome of its claim.  As a result it is usual for the applicant to pay 100% of the adjudication fees and have the adjudicator's decision released.

The decision must be "served" on the respondent in order to trigger the due date for payment under s29.2.a.  There is no such requirement if the adjudicator nominates a later payment date.  There is nothing in the Act as to who "serves" the decision.  Is it the adjudicator, or the applicant?

Often the respondent will not collect, read or act on the adjudicator's decision.

There is no requirement for the applicant to invoice or otherwise demand payment of the adjudicated amount from the respondent.

However, it is the applicant who wants to get paid.

Once the applicant has the decision, it is very much in its interests to serve notice on the respondent of the total amount due, including the respondent's proportion of the adjudication fees and interest on late payments, together with a copy of the decision and  stating the date on which the total adjudicated amount is due.

It may also be wise, to comply with its tax obligations, to submit a new tax invoice for the total sum (excluding interest on overdue amounts), or otherwise deal with the GST adjustment as required by the tax legislation.  

The applicant wants to make it as easy as possible for the respondent to comply with its obligation to make a payment.

What if the respondent still won't pay?

The applicant must wait for the due date for payment to pass.  It can then apply to the Authorised Nominating Authority for an Adjudication Certificate.  The certificate will nominate the full amount to be paid by the respondent.

The applicant can now take the Adjudication Certificate, together with an affidavit to the Court, to be filed as a judgement for debt, that is have the debt enforced.

Unless the applicant is very experienced with court processes, this is the time to engage a lawyer experienced with the adjudication recovery process.  It is possible to extract payment very quickly and efficiently, but there are any number of claims that have been seriously delayed or frustrated at this stage by poor advice from inexperienced lawyers.