Adjudication Process for Payment Claims in Australian Construction

What it is

Adjudication is the statutory dispute-resolution mechanism that sits inside every Australian Security of Payment Act. It is not arbitration. It is not litigation. It is a fast, low-cost, paper-based decision by an independent adjudicator about how much should be paid for construction work right now, while the parties argue final liability later.

Each state has its own Security of Payment Act, and the East Coast model (NSW, Vic, Qld, SA, Tas, ACT) shares the same five-step structure. WA moved closer to that model under the 2021 Act. The Northern Territory has its own version. The shape of the process is the same Australia-wide, but the precise day counts differ by state.

Step one: the payment claim

The claimant serves a payment claim that:

• is in writing
• identifies the work and the relevant contract
• states the claimed amount
• states that it is made under the relevant state Act

Some states require additional inclusions for head contractors, such as a supporting statement that subcontractors have been paid. A claim is normally tied to a reference date set by the contract or, if the contract is silent, the last day of each named month.

Step two: the payment schedule

The respondent has a statutory period to give a payment schedule:

• NSW: 10 business days under section 14
• Victoria: 10 business days under section 15
• Queensland: 15 business days under section 76
• South Australia: 15 business days under section 14
• Western Australia: 15 business days under section 25

A payment schedule must state the scheduled amount and give reasons for any difference between the scheduled and claimed amounts. Reasons matter. An adjudicator cannot consider any reason for withholding that was not included in the payment schedule.

If the respondent misses the deadline it generally becomes liable for the full claimed amount and the claimant can sue for the debt or proceed to adjudication after a second-chance notice.

Step three: the adjudication application

The claimant lodges an adjudication application with an authorised nominating authority. The application must be made within the statutory window, which is typically 10 to 20 business days depending on the state and on whether a payment schedule was served at all. The application must include:

• the payment claim and payment schedule
• the contract
• submissions and any evidence the claimant wishes the adjudicator to consider

The nominating authority refers the application to a registered adjudicator who can accept or decline within a short window.

Step four: the adjudication response

If a payment schedule was served on time, the respondent can lodge an adjudication response. The response is limited. It cannot introduce reasons for withholding that were not in the original payment schedule. This is the single biggest substantive control in the system. It punishes respondents who use the payment schedule as a placeholder and then try to build a real defence later.

Step five: the determination

The adjudicator determines the dispute on the papers within 10 to 15 business days of acceptance, depending on the state. The determination decides:

• the adjudicated amount
• the due date
• the rate of interest payable

Determinations are enforceable as judgment debts on registration with a court. The respondent can pay the adjudicated amount into court to challenge enforcement, but the adjudicator's findings on the merits cannot be reviewed for ordinary error. Only jurisdictional error or denial of natural justice will allow a court to quash a determination.

What this means for TradeLens compliance

Adjudication compliance is about discipline at two points. First, payment schedules must be issued on time and must state every reason for withholding. Second, evidence must be assembled at claim and schedule stages rather than at response stage. Construction managers who treat the payment schedule as a holding document lose the ability to argue substantive defences when adjudication starts.

For multi-state builders, the operating risk is using a single national template. Statutory deadlines and required content differ by state. A SA payment schedule template is not a NSW payment schedule template. Build state-specific workflow into the contract administration system from day one.