A Payment Schedule is issued by a building client after they have received a Payment Claim, if they dispute part or all of the claimed amount.

A Payment Schedule must:

  • Be in writing;
  • Identify the Payment Claim to which it relates; and
  • State an amount of the Payment Claim (if any) which is not disputed and which it proposes to pay (which is referred to as the “scheduled amount” and can be $0).

Where the scheduled amount is less than the claimed amount the Payment Schedule must also include:

  • An indication of how the scheduled amount has been calculated;
  • An explanation of why the scheduled amount is less than the claimed amount; and
  • If the payer is withholding payment; the reasons why payment is being withheld.

When must the Payment Schedule be issued/received?

If the client-payer wishes to issue a Payment Schedule they must do so within 20 working days of the Payment Claim being issued, unless the building contract expressly provides for a different timeframe.

What happens if no Payment Schedule is issued or payment is not made?

If, within the required timeframe, a client does not pay, or doesn’t issue a Payment Schedule, or issues a Payment Schedule disputing a partial amount, but does not pay the undisputed amount, you are entitled to suspend work under the Construction Contracts Act (even if there is no right to suspend works under the building contract). You are also entitled to seek an Adjudication under the Act, or commence Court proceedings to recover the full debt. The client is not allowed to raise any defence to the non-payment, so it is a very powerful tool for getting paid.

Can a Payment Schedule be disputed?

Yes. If you disagree with a Payment Schedule you can initiate the dispute process outlined in your building contract, or Adjudication under the Construction Contracts Act.

For our full article on Payment Schedules click here
Alan Knowsley
Construction Lawyer
Wellington, New Zealand




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