What is a Reference Date?
The Security Of Payment Act legislation says this about reference dates: “(1) On and from each reference date under a construction contract, a person:
(a) who has undertaken to carry out construction work under the contract, or
(b) who has undertaken to supply related goods and services under the contract,
is entitled to a progress payment.”
In other words: A claimant cant make claims under the Security Of Payment Act whenever they want to or at any time they complete some work. A claimant can only make a claim either on or after a reference date.
So the question is when does a reference date occur?
The Security Of Payment Act makes two provisions for a reference date to occur.
The first is:
“(a) a date determined by or in accordance with the terms of the contract as the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract,”
This is generally referred to in a contract as the “date or time for making a claim” and is usually somewhere around the 201th – 25th of each month
The second of the two provisions that the Security Of Payment Act makes for a reference date to occur is known as the “default of the Act”:
“(b) if the contract makes no express provision with respect to the matter-the last day of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month.”
In other words if you carried out work at anytime in the month of May then you can claim for that work on or after 31 May.
But remember, you must wait until the reference date to claim:
“(5) A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.”
But if you have done some work in a previous month that has been paid for yet you can include that in the current claim.
“(6) However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim.”
Some contracts can attempt to limit the amount and or availability of reference dates
A contract may say for example that a final claim can only be served on a certain date and it must be within a certain period. But this would be considered a clause that attempts to modify the way the Security of Payment Act operates and would be considered as “contracting out of the Act” which is outlawed by the Act: “(1) The provisions of this Act have effect despite any provision to the contrary in any contract. (2) A provision of any agreement (whether in writing or not): (a) under which the operation of this Act is, or is purported to be, excluded, modified or restricted (or that has the effect of excluding, modifying or restricting the operation of this Act), or (b) that may reasonably be construed as an attempt to deter a person from taking action under this Act,”
The Act states that a claimant can serve a payment claim for building & construction works (in NSW at least) for a period up to 12 months after work was last carried out: “A payment claim may be served only within: (a) the period determined by or in accordance with the terms of the construction contract, or (b) the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied), whichever is the later.”