Introduction
In the construction industry, getting paid on time can make or break a business. But what happens if payment doesn’t come through? How long do you actually have to chase your money?
There are two important deadlines to keep in mind. The first is the timeframe under the relevant security of payment act in your state (SOPA), which set strict limits on when you can serve a valid payment claim. The second is the general limitation period under the limitation act in your state for breach of contract of non-payment, which gives you a longer window to commence court proceedings.
Comparison Table
| State/Territory | Security of Payment Acts | Limitation Act |
|---|---|---|
| NSW | 12 months from last work/supply, or the later date stated in the contract [1] | 6 years from due date for payment [2] |
| VIC | 3 months from reference date or the later date stated in the contract [3] | 6 years from due date for payment [4] |
| QLD | 6 months from last work/supply, or the later date stated in the contract [5] | 6 years from due date for payment [6] |
| WA | 6 months from last work/supply, or the later date stated in the contract [7] | 6 years from due date for payment [8] |
| TAS | 12 months from last work/supply, or the later date stated in the contract [9] | 6 years from due date for payment [10] |
| ACT | 12 months from last work/supply, or the later date stated in the contract [11] | 6 years from due date for payment [12] |
Section 1 – SOPA timeframes
SOPA across Australia set strict deadlines for when a payment claim can be served. Missing these deadlines usually means you lose the ability to rely on SOPA adjudication altogether.
For example, in NSW, if a subcontractor finishes work on 1 May 2025, they have until 1 May 2026 to issue a payment claim under the NSW SOPA, unless their contract provides a later date. If they wait until June 2026, they can no longer use the SOPA and will need to pursue the debt under contract law through court proceedings instead. (see Section 2 below).
Another example would be an electrician in WA completes their work on 1 July 2025. They must serve their payment claim within 6 months so by 1 January 2026 unless their contract provides a later date.
Tip: Always diarise these deadlines as missing them can cut off your fastest and most cost-effective recovery option.
Important note: Each state’s legislation has different rules on what counts as a valid “payment claim” and sets different deadlines for final claims, such as those for retention money. Always consult with CTI Lawyers or your legal advisors to ensure your claim meets the statutory definition and is served within the correct timeframe, whether it is a progress payment or a final payment.
Section 2 – Limitation periods for breach of contract of non-payment
If you have missed the SOPA timeframe, you may still be able to recover your debt through a breach of contract claim for non-payment under the contract law. Each state has limitation periods that set the final date to commence proceedings. These periods are generally 6 years, but in some states, contracts made as a deed carry a longer period of up to 12 years. (see Footnote below) The clock usually starts running from the date the payment became due but was not paid.
For example, in QLD, if an electrician issues an invoice on 10 September 2025 to their customer with a contractual due date of 20 business days, the payment would then fall due on 8 October 2025. If the payment is not made, the electrician generally has until 8 October 2031 to commence court proceedings for breach of contract.
Another example would be a subcontractor in the ACT who issues an invoice on 20 October 2025 with a contractual due date of 10 business days, making payment due on 3 November 2025. If no payment is received, they generally have until 3 November 2031 to bring proceedings in court.
Important note: Limitation periods are strict. If you miss the deadline, you may lose your right to recover the debt altogether.
Section 3 – Why both matter
SOPA provide a quick and cost-effective way to recover payment. Adjudication is designed to keep money flowing in the construction industry under a “pay now, argue later” model. It is usually determined within a few days, and the process is relatively simple. You can file an adjudication application with an authorised nominating authority, attaching supporting documents such as the contract and payment claim (and payment schedule if applicable).
The process is relatively low in cost, strict on deadlines, and interim in nature, meaning the parties can still take the matter to court later if they wish, but in the meantime the claimant has the benefit of being paid with the notion that disputes are ‘parked for now’, but the reality is after you are successful, these disputes are often parked forever due to the cost and inconvenience of prosecuting a dispute.
Court proceedings are slow and expensive. A contractor must prepare and file formal pleadings, submit evidence, and prove the existence of the contract and the breach before a judge. This requires significantly more time and legal costs. Court proceedings can take many months or even years before reaching a final judgment, but that judgment is enforceable and provides a final resolution of the dispute.
For example, if a contractor misses the SOPA deadline but still has time left under the limitation period, they can still commence court proceedings to recover the debt. However, compared to adjudication, the process will take longer, involve higher costs, and carry greater risks.
In short, adjudication is about speed and cash flow, while court proceedings are about final resolution at a higher cost and over a longer period of time.
Final Thoughts
Knowing these deadlines can save your business thousands of dollars. The best approach is to use the SOPA process first, as it is quick and powerful, and to keep the general limitation periods in mind as a safety net if the SOPA timeframe has passed.
The key is not to delay. Act promptly, diarise your deadlines, and get advice early if payment is overdue.
CTI Lawyers can guide you through both SOPA adjudication and court proceedings to make sure your rights are properly protected.
Footnotes
[1] Building and Construction Industry Security of Payment Act 1999 (NSW) s 13(4)
[2] Limitation Act 1969 (NSW) s 14(1)(a) (but see s 16 for contracts by deed (12 years))
[3] Building and Construction Industry Security of Payment Act 2002 (Vic) s 14(4) for progress payments (but see s 14(5) for final payments)
[4] Limitation of Actions Act 1958 (Vic) s 5(1)(a)
[5] Building Industry Fairness (Security of Payment) Act 2017 (Qld) s 75(2) (but see s 75(3) for final payments)
[6] Limitation of Actions Act 1974 (Qld) s 10(1)(a) (also see s 10(3) for contracts by deed (6 years))
[7] Building and Construction Industry (Security of Payment) Act 2021 (WA) s 23(4) for progress payments (but see s 23(5) for final payments)
[8] Limitation Act 2005 (WA) s 13(1) (but see s 18 for contracts by deed (12 years))
[9] Building and Construction Industry Security of Payment Act 2009 (Tas) s 17(6)
[10] Limitation Act 1974 (Tas) s 4(1)(a)
[11] Building and Construction Industry (Security of Payment) Act 2009 (ACT) s 15(5)
[12] Limitation Act 1985 (ACT) s 11(1) (but see s 13 for contracts by deed (12 years))
Advice & Support
For advice regarding contract disputes and statutory duty of cate matters, we encourage you to connect CTI Lawyers to get specific guidance and expert assistance on this matter. They are highly knowledgeable in these areas and will be able to provide you with the necessary support.
As specialised construction lawyers, CTI Lawyers helps navigate the complex minefields of payment recovery, contracting, legislative requirements and more. We assist with all construction contract and dispute related matters, from contract review and drafting to debt recovery through adjudication and court. CTI Lawyers also frequently assists clients with defending claims brought against them in tribunals or the Local, District and Supreme Courts.
This summary is a guide only and is not legal advice. If you require assistance or further clarification, contact CTI Lawyers on 02 9021 9699 or submit your enquiry here.