Introduction

In the construction industry, the Building and Construction Industry (Security of Payments) Act 1999 (NSW) (SOPA) plays a critical role in ensuring that payments are made promptly, and disputes are resolved efficiently during construction work. Adjudication under SOPA provides a streamlined, cost-effective alternative to traditional litigation, helping to maintain cash flow and reduce the financial burden on parties involved in construction contract disputes. Recent legislative changes and case laws, particularly the new Section 8(2) of SOPA, have introduced important updates regarding compliance with the Home Building Act 1989 (NSW).

This guide outlines the key steps involved in the adjudication process under the New South Wales SOPA, talks about the process of preparing an adjudication application for payment claims and presents some critical tips for drafting a successful adjudication application.

Step-by-Step Overview of Adjudication Process under Security of Payment Act in NSW

Action	Description & Deadlines (All references are to business days unless noted)
Payment Claim	A claimant serves a valid payment claim on the respondent. It must identify the work, state the amount, and declare that it is made under SOPA. Head contractors must also include a supporting statement.
Payment Schedule	The respondent can only submit a response if they provided a valid payment schedule. The deadline is the latter of 5 days after receiving the application, or 2 days after receiving notice of the adjudicator’s acceptance.
Adjudication Application (Multiple Scenarios)	This step is highly dependent on the respondent’s actions. The claimant must apply within: 10 days of receiving a disputed payment schedule ; or 20 days of the due date for payment if a scheduled amount was not paid ; or if no payment schedule was received, within 10 days after the end of a 5-day notice period that the respondent has to provide a schedule.
Adjudication Response	The adjudicator has 10 business days to determine after receiving the adjudication response, or from the date the response was due. This period can be extended only by agreement among both parties.
Determination Period	If the respondent fails to pay, the claimant can request an Adjudication Certificate from the ANA. This certificate can then be filed in court to be entered as a judgment debt. The appropriate court is determined by the amount claimed: Local Court (not exceeding $100,000), District Court (over $100,000 but not exceeding $1,250,000), or Supreme Court (exceeding $1,250,000). The claimant may also suspend work after providing two days’ written notice.
Payment of Adjudicated Amount	The respondent must pay the adjudicated amount within 5 business days of the determination being served or by the payment due date, whichever is later.
Non-Payment and Enforcement	If the respondent fails to pay, the claimant can request an Adjudication Certificate from the ANA. This certificate can then be filed in court to be entered as a judgment debt. The appropriate court is determined by the amount claimed: Local Court (not exceeding $100,000), District Court (over $100,000 but not exceeding $1,250,000), or Supreme Court (in excess of $1,250,000). The claimant may also suspend work after providing two days’ written notice.

To understand more about SOPA, please read our detailed guide here.

Preparing Adjudication Application for Successful Payment Claim: Things You Must Know

Preparing an effective adjudication application is crucial for successfully resolving disputes under SOPA. Here’s a detailed guide on how to prepare your application:

Understand and Meet Deadlines

Familiarise yourself with the specific deadlines for lodging your application as outlined by the relevant legislation, such as the SOPA. Timing is crucial, and missing a deadline can forfeit your right to adjudication.

Choose an Authorised Nominating Authority (ANA)

Identify an ANA that provides standardised forms or has an automated application process on their website. These forms are designed to help you provide all necessary information required under SOPA.

Complete the Application Form

Download and fill out the form from the ANA’s website. Make sure to accurately and thoroughly provide all the details related to the Payment Claim, the Payment Schedule, and the application itself.

Include Essential Documents

Attach a copy of the Payment Claim and any relevant Payment Schedules to your application. If there is a written contract related to the work, include this as well.

Make Written Submissions

Apart from the standard information, you should make additional written submissions to the Adjudicator. These should argue your case for why the claimed amount should be paid and address any reasons given by the Respondent in the Payment Schedule for reducing the payment.  Clearly explain your entitlement to the claimed amount, which includes knowing how to describe construction works in payment claims and schedules, reference specific parts of the contract as necessary, and confirm that the work for which payment is claimed was indeed performed.

Address Contractual and Legal Arguments

If the Payment Schedule includes complex contractual or legal arguments, or if the Respondent outright denies liability, it’s advisable to consult a specialist building and construction lawyer.  A lawyer specialised in this field can draft compelling arguments and make a persuasive case that aligns with contractual interpretations and legal precedents, increasing your chances of a favourable outcome.

By meticulously preparing your adjudication application and ensuring all submissions are comprehensive and well-supported, you enhance your likelihood of securing a favourable decision. Always consider professional legal advice to navigate complex issues and to present a strong case in the adjudication process.

This is particularly critical in light of the new Section 8(2) of SOPA, which came into effect on 20 August 2024. This amendment means that a contractor does not have a statutory right to a progress payment under SOPA if they are not compliant with the licensing and insurance obligations under the Home Building Act 1989. Consequently, a respondent can use this as a definitive defence to an adjudication application, provided they explicitly state it in their payment schedule.  

Essential Tips for Drafting an Adjudication Application

A well-prepared application serves as the foundation of your argument and determines how effectively your case is communicated to the adjudicator. It should be precise, well-organised, and comprehensive, providing all the necessary details to substantiate your claim. Below, we outline several critical tips to consider when drafting your adjudication application. These tips are aimed at enhancing clarity, ensuring compliance with legal standards, and ultimately positioning your case favourably in the adjudication process.

Detail the Substance of Your Claim

Your application should thoroughly document the basis of your claim. This includes detailed descriptions of the work done, services provided, and any other contractual obligations fulfilled that are under dispute. Attach all relevant documentation like contracts, emails, photographs, invoices, and expert reports.

Keep Submissions Concise

Make sure that written submissions are short and directly address the points at issue. This helps in making your application clear and to the point.

Itemise and Separate Submissions

If the payment claim is itemised, prepare separate written submissions for each item claimed. This structured approach helps in dealing with each item’s specific issues effectively.

Counteract Respondent’s Arguments

Include submissions that specifically address and refute the respondent’s reasons for short payment or any deductions. This is crucial because a respondent cannot introduce a new reason for non-payment in their adjudication response that was not already included in their payment schedule. 

Use Visual Aids

Incorporate plans, specifications, diagrams, and photographs in the application. These can significantly aid the adjudicator’s understanding of the dispute, particularly with complex items.

Address Any Back charges

Clearly and specifically address any deductions for defects, rectifications, or delay damages that you believe the respondent is not entitled to claim, providing reasons for your stance.

Provide a Clear Reconciliation

Offer a detailed reconciliation showing the relationship between contract amounts, payment claims, scheduled payments, and actual payments received. This is often the first task an adjudicator undertakes, and doing it for them can clarify your position and potentially expedite the review process.

Assume Adjudicator’s Knowledge

Do not include submissions about the statutory framework or case law unless it directly impacts the claim. Assume that the adjudicator is already familiar with their legal framework and duties.

Legal and Factual Submissions

Ensure that your submissions are both legally and factually robust. This includes clear legal arguments where applicable and factual evidence to support your claims. It’s important to frame your submissions in a way that aligns with the legal standards the adjudicator will use to assess the case.

Formatting for Electronic Submissions

Most nominating authorities accept electronic submissions. Ensure your documents are properly formatted, clearly labelled, and easy to navigate electronically, which can include hyperlinks in larger documents to sections or evidence for easy reference.

Preemptive Responses

Anticipate potential counterarguments from the respondent and address these in your application proactively. This shows thorough preparation and can mitigate the impact of the respondent’s submissions.

Maintain a Professional Tone

While it’s essential to assertively present your case, maintaining a professional and respectful tone throughout your application is crucial. This reflects well on your credibility and seriousness about the process.

Serve Your Adjudication Application Properly

Make sure to serve the application correctly as per the requirements of SOPA and ensure the respondent receives all the necessary documentation within the stipulated timeframe. Proper service is essential to ensure the legal process is upheld.

When serving, it is highly recommended to use a courier service that provides a signature on delivery, and you should avoid using Registered Post, as recipients may refuse to collect it. 

Seek Professional Help

Consider hiring a professional, such as a construction lawyer, especially in complex cases. They can provide valuable insight into both the legal framework and strategic considerations specific to adjudication processes.

Recent Legal and Legislative Updates in 2025

The landscape of building and construction law in New South Wales has been significantly reshaped by critical legislative amendments and recent judicial decisions. The core message from these changes is a reinforcement of the “pay now, argue later” principle, but with a much higher demand for meticulous compliance from all parties from the outset.

Effective from 20 August 2024, a major legislative amendment has added a new Section 8(2) to the Security of Payment Act. This new section explicitly links a contractor’s right to a progress payment under SOPA to their compliance with the licensing and insurance obligations of the Home Building Act 1989. Specifically, if a residential building contractor performs work without a proper licence or without a valid contract of insurance from the Home Building Compensation Fund for work over $20,000. (Including GST), they do not have a right to recover payment through the Security of Payment Act.

Key Judicial Clarifications

The table below presents a summary of a few key recent court decisions that provide essential guidance, clarifying the nuances of SOPA and the consequences of procedural errors.

Case Name	Court/Year	Core Issue	Court Finding	Key Takeaway
Roberts Co (NSW) Pty Ltd v Sharvain Facades Pty Ltd [2025] NSWSC 606	NSW Court of Appeal, 2025	The courts strongly uphold the pay now, argue later” principle. Challenging a determination through an injunction is a very difficult and high-risk action.	A deeming clause that delays a statutory deadline is void. Service is effective upon retrieval, regardless of time of day.	Do not rely on contractual clauses to modify SOPA timeframes. Adopt a conservative, 24/7 approach to deadlines.
Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305	NSW Court of Appeal, 2024	Validity of a payment schedule with a vague response.	A payment schedule must provide a detailed reason for non-payment for every distinct component of the claim; deferring assessment is insufficient.	Vague payment schedules are a high-risk strategy and can render a respondent liable for the full claimed amount.
DECC Credit Pty Ltd v Australia Wide Lining Pty Ltd [2025] NSWSC 826	NSW Supreme Court, 2025	Grounds for injunction to restrain enforcement of determination.	The courts strongly uphold the pay now, argue later principle. Challenging a determination through an injunction is a very difficult and high-risk action.	The courts strongly uphold the “pay now, argue later” principle. Challenging a determination through an injunction is a very difficult and high-risk action.

Lodge an Adjudication Application to Get What You are Owed. Contact Us Now.

Understanding the adjudication process under SOPA is essential for builders and construction managers to effectively manage and resolve payment disputes. By following the outlined steps, from preparing and submitting an adjudication application to enforcing a determination, construction professionals can ensure they are upholding their rights and obligations under SOPA. If you require further assistance or have specific questions regarding SOPA and how to make a successful payment claim, contact our construction lawyers at PBL Law Group.

Frequently Asked Questions (FAQ)