Getting paid - WA’s Security of Payment Act - payment claims, payment schedules and adjudication
The Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOPA) gives contractors, subcontractors and suppliers a statutory right to progress payments, and a fast process for resolving payment disputes. It applies to most construction contracts entered into on or after 1 August 2022.
The process is quick, and the deadlines are strict. Missing a step can cost a claimant its right to adjudicate, or leave a respondent liable for the full amount claimed.
Key takeaways
Claims can be made monthly, on or after the last day of each month in which work was carried out (the contract may specify an earlier time).
Respondents have 15 business days (or less, if the contract says so) to give a payment schedule. Failing to do so can make them liable for the full claimed amount.
Every reason for withholding payment must be in the payment schedule. New reasons can't be raised later in the adjudication.
Adjudication applications must be made within 20 business days of first becoming entitled to apply (usually when the amount is not paid or part paid).
Determinations are quick and interim. They must be paid, but they don't finally decide the parties' rights under the contract.
A note on "business days"
Almost every SOPA deadline is counted in business days. A business day excludes weekends, public holidays and every day from 22 December to 10 January (inclusive) (s 4). Count carefully, particularly around Christmas and Easter, and don't leave things to the last day.
Step 1: Preparing and giving a payment claim
A payment claim can be made on or after the last day of the month in which work was first carried out (or goods and services first supplied), and on or after the last day of each later month (s 23). The contract can allow claims earlier, but not later. Unless the contract says otherwise, only one claim can be made for each month, but unpaid amounts from earlier claims can be included in a later claim (‘recycling’ of claims is permitted).
There are also outer time limits (s 23):
Progress claims must be made before the later of the date set by the contract (if any) and six months after the work (or supply) the claim relates to was last carried out.
Final claims must be made before the latest of the date set by the contract (if any), 28 days after the end of the last defects liability period, and six months after completion of all the work (or supply of all the goods and services).
If the contract is terminated, a claim can be made on or after the date of termination, within the above time limits.
What must a payment claim include?
A payment claim must (s 24):
be in writing, and in the approved form (if any)
state the amount claimed
describe the items and quantities of work, or goods and services, to which it relates
state that it is made under the Building and Construction Industry (Security of Payment) Act 2021.
An invoice can be a payment claim, and it doesn't need to be signed. But if the statement that the claim is made under SOPA is missing, the claimant may not be able to rely on the Act's processes.
Give it properly
The claim must be given in the manner the contract provides, if it is reasonably practicable to do so. Otherwise, it can be given personally, left at or posted to the respondent's ordinary place of business, or emailed to an address the respondent has specified for documents of that kind (s 113). Keep a record of when it was sent and received.
An emailed document is taken to be given when it is received under the Electronic Transactions Act 2011 (WA), generally when it can be retrieved at the nominated address (reg 23). As the WA Court of Appeal confirmed in Co-Operative Bulk Handling Ltd v Martinus Rail Pty Ltd [2026] WASCA 82, that can be on a weekend.
Step 2: Responding with a payment schedule
A respondent that doesn't intend to pay the full amount should give a payment schedule within 15 business days after the claim is made, or earlier if the contract requires (s 25).
The payment schedule must:
be in writing, and in the approved form (if any)
identify the payment claim
state the amount the respondent proposes to pay, or that it doesn't propose to pay anything
if the amount is less than the claim, explain why, including the reasons for withholding any payment.
Get the schedule right. It defines the dispute. A respondent can't raise reasons in the adjudication that weren't in its payment schedule (s 34(3)). Set-offs, back charges, defects and amounts already paid should all be clearly identified, as the Supreme Court emphasised in Cooper & Oxley Group Pty Ltd v Koitka [2026] WASC 4.
The consequences of not giving a schedule are severe. The respondent becomes liable to pay the full claimed amount on the due date (s 26).
Step 3: The due date for payment
Unless the contract provides an earlier date, a progress payment is due (s 20):
from a principal to a head contractor: 20 business days after the claim is made
to a subcontractor: 25 business days after the claim is made. This also applies to a principal that contracts directly with trade contractors, with no head contractor.
Pay-when-paid clauses have no effect (s 14). Interest runs on late payments at the higher of the contract rate and the court judgment rate (s 21).
Step 4: Your options if you're not paid
If the respondent doesn't pay the claimed or scheduled amount by the due date, the claimant can do one, but not both, of the following (s 27):
sue to recover the unpaid amount as a debt in court, where the respondent can't bring a cross-claim or raise defences arising under the contract, or
apply for adjudication.
The claimant can also suspend work, on at least two business days' written notice stating that it is given under the Act (s 62).
Note that if the payment schedule proposes to pay nothing, the claimant can't sue for the debt, but can apply for adjudication.
Step 5: Applying for adjudication
When can you apply?
A claimant can apply for adjudication if (s 28):
the respondent hasn't paid the claimed or scheduled amount by the due date, or
the payment schedule proposes to pay less than the claim, or nothing.
The application must be made within 20 business days after the claimant first becomes entitled to apply.
If no payment schedule was given: the second chance notice
If the respondent didn't give a payment schedule, the claimant must first give a written notice of intention to apply for adjudication within 20 business days after the due date. The respondent must then be given a second chance to provide a payment schedule within 5 business days of receiving the notice (s 28(2)). The due date isn't extended.
Lodging the application
The application is made to the adjudicator named in the contract (if any - which is not common) or otherwise to an authorised nominating authority (ANA) chosen by the claimant. Contract terms that nominate or restrict the choice of ANA are not binding on the claimant (s 29).
The application must be in writing, in the approved form (if any), identify the payment claim and payment schedule, attach the contract or its relevant terms, and include the ANA's application fee (s 30). A copy must be given to the respondent.
An adjudicator must be appointed within 5 business days. If not, the application is taken to be withdrawn, and the claimant has a further 5 business days to make a fresh application (s 32).
Step 6: The adjudication
Response: if the respondent gave a payment schedule within time, it can lodge an adjudication response within 10 business days after receiving the application, and must give the claimant a copy (s 34). It can't include new reasons for withholding payment.
Determination: the adjudicator must decide within 10 business days after the response is lodged (or was due), or after appointment if no response is allowed. The parties can agree to extend this by up to 20 business days in total (s 37).
Fees: the parties share the adjudicator's fees equally, unless the adjudicator decides otherwise. Fees are capped for claims of $50,000 or less (s 50 and reg 9). Each party bears its own legal costs.
The adjudicator determines the amount payable, the due date and the interest rate (s 38).
Adjudication review
WA allows a review of a determination by a review adjudicator in limited cases (ss 39 and 40, and reg 8):
Claimant: if the adjudicated amount is more than $200,000 less than the claimed amount, or the adjudicator decided it had no jurisdiction and the claim is more than $50,000.
Respondent: if the adjudicated amount is more than $200,000 greater than the scheduled amount. The respondent must have given a payment schedule and an adjudication response on time, and must first pay the undisputed amount to the claimant and the disputed amount into a trust account.
A review application must be made within 5 business days after receiving the determination.
Step 7: Payment and enforcement
The respondent must pay the adjudicated amount within 5 business days after receiving the determination, unless the adjudicator sets a later date (s 52).
If it doesn't pay, the claimant can:
request a certified copy of the determination from the Building Commissioner, which is taken to be a judgment of a court and can be enforced (ss 53 and 54). A certified copy can't be provided while a review application is pending.
suspend work, on two business days' written notice (s 62).
A respondent that applies to set aside the judgment can't raise contractual defences or cross-claims, or challenge the determination itself, and must pay the amount into court as security (s 54).
An interim outcome
An adjudication determination is an interim, "pay now, argue later" outcome. It doesn't affect the parties' rights under the contract (s 55). Either party can still pursue the underlying dispute in court or arbitration, and any amount paid under the determination will be taken into account. There is no appeal from a determination, but the Supreme Court can set aside all or part of one for jurisdictional error (ss 66 and 67).
How we can help
Lang Litigation and Construction Law acts for contractors, subcontractors and principals at every stage of the security of payment process: preparing payment claims and schedules, adjudication applications and responses, adjudication reviews, and enforcement. Because the timeframes are so short, contact us as soon as a payment dispute arises.
This article is general information only and is not legal advice. You should seek specific advice about your circumstances.