Does your business enter into Construct Contracts?
The Construction Contracts Act 2004 (WA) (“the Act”) applies to construction contracts as set out in section 7 of the Act. “Construction Work” is defined in section 4(2) and includes:
1. civil works (including railways, lines or cables for electricity or a pipeline for gas, oil or other material);
2. constructing buildings or structures (and fitting or installing anything into these structures);
3. repairs, restorations, extensions, maintenance; and
4. preparatory works or anything necessary for the completion of other construction works.
What do you do if there is a payment dispute?
Section 26 (1) of the Act states that to apply to have a payment dispute adjudicated under the Act a party to the contract must prepare a written application for adjudication and serve it on each other party to the contract within 28 days after the dispute arising or within the time period as provided by section 37 (2) (b) of the Construction Contracts Act.
The parties must serve the written application for adjudication on either;
(a) A registered adjudicator which the parties have agreed to appoint;
(b) An agreed prescribed appointer, as prescribed by section 28 of the Act, must, within 5 days after being served appoint a registered adjudicator; or
(c) A prescribed appointer chosen by the party.
How do you agree on an adjudicator?
If the parties do not agree on either a registered adjudicator or a prescribed appointer then the party applying to have the payment dispute adjudicated may choose a prescribed appointer from those as prescribed by section 3 of the Construction Contracts Regulations 2004.
List of prescribed appointers;
1. The Australian Institute of Building
2. Electrical and Communications Association of Western Australia (Union of Employers)
3. The Institute of Arbitrators and Mediators Australia
4. Master Builders Association of Western Australia (Union of Employers)
5. RICS Dispute Resolution Services
This list is taken from the Government Building Commission website which is;
The website provides more detail about the prescribed appointers, their expertise and the fees involved in using each appointer.
It is up to you whether you decide to have the appointer specified in the Terms and Conditions. Having a prescribed appointer would possibly cut down the potential for disagreements between yourself and the other party in regard to choosing a registered adjudicator as well stopping another party being able to choose prescribed appointer without your consent. You do not have to have the Master Builders Association of Western Australia as your prescribed appointer; you can choose anyone from the list above.
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