Developer vs Contractor Disputes: Progress Claims, Variations and Getting Paid

Commercial construction disputes are usually about two things: a progress claim the developer has “assessed” down to a fraction of what was claimed, and a pile of variations the superintendent will not certify. Whether you are the contractor chasing the money or the developer holding it, here is how these fights actually get resolved.

Know your contract

Most commercial jobs run on AS 4000, AS 2124, AS 4902 (design and construct) or a bespoke version. These contracts set out:

• When progress claims can be made (usually monthly) and what must be included.
• The superintendent’s role in certifying claims and directing variations.
• Time bars on variation and delay claims. Miss a notice deadline and the entitlement is often lost.
• Dispute resolution steps: notice of dispute, conference, then arbitration or litigation.

Read the variation clause and the time bar clause before you do anything else. A contractor who has not given notice within the period the contract requires has a much weaker hand, and a developer who relies on that time bar has a strong one.

Contractor: the progress claim route

1. Serve every progress claim as a Security of Payment claim. Reference the Act for your state (New South Wales 1999, Victoria 2002, Queensland BIF Act 2017, Western Australia 2021, South Australia/Tasmania/Australian Capital Territory 2009). This forces a payment schedule within 10 to 15 business days.
2. Include variations in the claim where the Act allows. Watch Victoria’s excluded amounts rules for variations that have not been agreed.
3. If the schedule is short, adjudicate. A determination usually arrives within a few weeks and can be filed as a judgment. The developer must pay first and argue later.
4. Consider suspension. If an adjudicated amount goes unpaid, most Acts allow you to suspend work on notice without breaching the contract.

Developer: how to respond properly

• Always serve a payment schedule on time. Missing it means the full claim becomes payable and you lose the right to raise reasons for withholding. This is the most expensive mistake a developer can make.
• Give reasons for every deduction. Defective work, unapproved variations, liquidated damages, set-off for back-charges. If it is not in the schedule, you cannot raise it at adjudication.
• Do not rely on “pay when paid”. Those clauses are void under every SOP Act.

The variation fight

Variations are where the money disappears. Whether you are claiming or resisting them, the winning approach is documentary:

• Was the variation directed in writing by the superintendent or principal? Site instructions, RFIs and emails count. Verbal directions rarely do.
• Was notice given within the time bar? Contracts often require notice within 5 to 10 business days of the event.
• Is the pricing supported? Labour records, supplier invoices, subcontractor quotes, and the contract’s schedule of rates.
• Was the work actually a change, or was it already within scope? Design and construct contracts push a lot of “variations” back onto the contractor.

Letter of demand first

Before an adjudication or court, send a letter of demand that sets out the claim, the contract provisions relied on, the SOP Act position and the consequences of non-payment. On commercial jobs this letter often goes straight to the developer’s finance team or lawyer, and a well-drafted one frequently produces a settlement offer. It also fixes the date from which interest and costs run.

When a statutory demand is the right tool (and when it is not)

If the developer or head contractor is a company and the debt is undisputed (for example, an adjudication determination or a certified progress claim they simply have not paid), a statutory demand under section 459E of the Corporations Act 2001 is a powerful next step. The company has 21 days to pay or apply to set it aside, or it is presumed insolvent and can be wound up. The minimum debt is $4,000.

Warning: do not issue a statutory demand for a debt that is genuinely disputed. Under section 459H the court will set it aside, and you will likely be ordered to pay the other side’s costs. Statutory demands are for undisputed debts and for turning an adjudication certificate or judgment into pressure that a company cannot ignore. Get the debt certified or adjudicated first, then issue the demand.

A practical sequence

1. Progress claim under the SOP Act, with variations documented.
2. Letter of demand when the schedule comes in short or no schedule arrives.
3. Adjudication if unpaid.
4. Statutory demand on the company once you hold a determination or judgment.
5. Winding up application if they still do not pay. Very few companies let it get that far.

Get the paperwork right, for $49

Claim Done drafts your Letter of Demand for $49, referencing your contract, the Security of Payment Act for your state and the variations in dispute. When you hold an undisputed debt against a company, Claim Done drafts your Statutory Demand for $97 in the prescribed Form 509H with the supporting affidavit requirements set out, for you to check, sign and serve yourself.

Start my Letter of Demand – $49  |  Start my Statutory Demand – $97