Payment schedules – incomplete reasons risk rejection

Security of payment legislation requires strict compliance with procedural requirements when responding to payment claims.

A recent Supreme Court of Queensland decision, Baguley Build Pty Ltd v Olcon Concrete & Construction Pty Ltd & Anor [2025] QSC 126 (Baguley), confirms that respondents who fail to set out complete reasons for withholding payment in their payment schedule may be prevented from raising those reasons later in adjudication, with limited scope for judicial review.

Introduction

The decision highlights the narrow avenues available for challenging adjudication determinations under security of payment legislation and reinforces the “front-loaded” approach the legislation requires from respondents.

Once a payment schedule is served, any attempt to supplement or expand upon the reasons originally given in an adjudication is likely to be treated as introducing “new reasons”, which adjudicators are obliged to disregard.

Factual background

In Baguley, the claimant issued a payment claim for $137,075.40.  The respondent delivered a payment schedule for $nil, stating only that its “reasons for withholding payment have not changed” from earlier claims, without restating or clearly identifying those reasons in the schedule itself.

When the matter proceeded to adjudication, the respondent attempted to expand on its reasons.  The adjudicator determined that these expanded submissions constituted “new reasons” not set out in the original payment schedule and therefore did not consider them.

The respondent sought to have the adjudication decision set aside, arguing that the adjudicators rejection of the “new reasons” amounted to a jurisdictional error. The Court disagreed, finding the adjudicator was entitled to disregard reasons not properly included in the original payment schedule.

Practical takeaways

This decision reinforces the need for payment schedules to:

• Be comprehensive: if you intend to dispute a payment claim, ensure your payment schedule includes all grounds for withholding payment, supported by sufficient detail.
• Avoid relying on cross-references: referring back to earlier claims or correspondence without expressly incorporating the reasons for withholding payment expressed in those documents risks those reasons being excluded at adjudication. If you need to refer to a separate document, ensure that document is clearly identified and attached to the payment schedule.
• Judicial review is not a safety net: Courts will rarely intervene in adjudication decisions unless there is a clear jurisdictional error.

The decision reinforces the message that under security of payment legislation, payment schedules are not a placeholder, they are the respondent’s one opportunity to put their full case forward.  A failure to include specific reasons in the payment schedule may mean those reasons cannot be raised later in adjudication, and the courts are unlikely to intervene.

Thank you to Niamh Rooney, Solicitor, for her valuable research and assistance with this article.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.