Subcontractor Didn’t Pay You: Recover Money as a Subbie

You finished the job. You sent the invoice. The subcontractor who hired you has gone silent, made excuses, or refused to pay. If a subcontractor didn’t pay you in Australia, you have statutory rights designed specifically to protect subbies — and you do not need a lawyer to start the recovery process.

This guide explains your rights under security of payment legislation, how to issue a letter of demand, and the tribunal pathways available across every Australian state and territory.

Your Rights Under Security of Payment Laws

Every Australian state and territory has security of payment legislation designed to protect subcontractors, tradies, and suppliers in the construction industry. These laws give you fast, enforceable rights to claim payment for work completed — even if there is a dispute about quality or variations.

The legislation varies by state, but all share a common purpose: get subbies paid quickly. They allow you to serve a payment claim, and if the head contractor or subcontractor does not respond correctly within strict timeframes, you can enforce the debt through adjudication — a binding process that typically concludes within 15-20 business days.

What Qualifies as a Construction Contract

Security of payment laws apply to construction work and related goods and services. This includes:

• Building, demolition, or renovation work
• Electrical, plumbing, carpentry, concreting, painting, tiling
• Supply of materials to a construction site
• Hire of plant or equipment for construction purposes
• Design, surveying, or project management services related to construction

If your work fits this definition, you have statutory payment rights — regardless of what the contract says.

Step 1: Send a Letter of Demand

Before you escalate to adjudication or tribunal, send a letter of demand. This is a formal written notice requiring payment within a specified period (typically 7-14 days). A letter of demand:

• Shows you are serious about recovering the debt
• Creates a paper trail for any future legal action
• Often prompts immediate payment without further steps
• Is required before you can file in most tribunals

Your letter of demand should include:

• A clear statement of the amount owed
• A description of the work completed or goods supplied
• Reference to the invoice number and date
• A payment deadline (7-14 days is standard)
• A statement that you will take further action if payment is not received
• Reference to the applicable security of payment legislation (if relevant)

ClaimDone prepares and sends a professionally formatted letter of demand for $97. You complete a 5-minute intake form, upload your invoice and supporting evidence, and the Proprietary AI Engine drafts a letter citing the applicable Australian law. The letter is delivered automatically via email and registered post.

Step 2: Serve a Payment Claim Under Security of Payment Laws

If the letter of demand does not result in payment, serve a payment claim under your state’s security of payment legislation. This is a formal statutory notice that triggers strict timeframes and consequences.

How to Serve a Payment Claim

A valid payment claim must:

• Be in writing
• Identify the construction work or goods supplied
• State the amount claimed (including GST if applicable)
• Be served within the timeframe allowed under your contract or the Act (typically within 12 months of completing the work)
• Include a statement identifying it as a payment claim under the relevant Act

You serve the payment claim on the party who engaged you — the subcontractor, head contractor, or principal. Service can be by email, post, or hand delivery, depending on what your contract allows.

What Happens Next

Once you serve a payment claim, the respondent has a limited time to serve a payment schedule — a written response stating how much (if anything) they intend to pay and why. The timeframe is typically 10 business days in most states or 14 days in Western Australia and the Northern Territory.

If they do not serve a payment schedule within the deadline, they lose the right to dispute the claim. You can then:

• Sue for the claimed amount as a debt in court, or
• Apply for adjudication to obtain a binding determination

If they serve a payment schedule but offer less than the claimed amount, you can apply for adjudication — a fast, binding dispute resolution process managed by an authorised nominating authority in your state.

Step 3: Apply for Adjudication

Adjudication is the enforcement mechanism built into security of payment laws. It is designed to be fast, low-cost, and final (subject to limited review). The process works like this:

1. You apply for adjudication — typically within 10-20 business days of receiving the payment schedule (or the deadline passing without one)
2. An adjudicator is appointed — usually within 5 business days
3. Both parties submit written submissions — you present your claim, the respondent presents their defence
4. The adjudicator makes a determination — typically within 10-15 business days
5. The determination is binding — the respondent must pay the adjudicated amount, even if they intend to dispute it later in court or tribunal

Adjudication costs vary by state but typically range from $1,500-$3,500 in total (split between application fees and the adjudicator’s fee). The successful party can often recover these costs.

Enforcing an Adjudication Determination

If the respondent does not pay the adjudicated amount, you can file the determination as a judgment in the relevant court and enforce it like any other court judgment — through garnishee orders, writs, or bankruptcy proceedings.

Step 4: Tribunal Application (If Adjudication Is Not Suitable)

If your claim does not fall neatly within security of payment legislation — for example, if the work was completed more than 12 months ago, or if the contract was not strictly a construction contract — you can still recover the debt through your state’s civil tribunal.

Each state has a small claims tribunal with jurisdiction over unpaid invoices. Tribunal applications are designed for self-represented parties. You do not need a lawyer. The process is:

1. File an application — complete the tribunal’s form, pay the filing fee (typically $50-$300 depending on the claim amount)
2. Serve the application — deliver a copy to the respondent
3. Attend a directions hearing — the tribunal may hold a preliminary hearing to clarify the issues
4. Attend the final hearing — present your evidence, the respondent presents theirs, the tribunal makes a decision
5. Receive a binding order — if you win, the tribunal issues an enforceable order for payment

ClaimDone prepares tribunal applications for $197. You upload your evidence, complete a short intake form, and the Proprietary AI Engine generates a complete application pack with supporting documents, witness statements, and legal submissions.

What Evidence You Need

Whether you are sending a letter of demand, serving a payment claim, or filing a tribunal application, you need to prove:

• The work was completed — photos, signed dockets, completion certificates
• The amount is correct — invoices, quotes, timesheets, purchase receipts
• The respondent agreed to pay — signed contracts, purchase orders, email confirmations, text messages

The stronger your evidence, the faster you get paid. If you do not have a signed contract, you can still succeed — emails, text messages, and conduct (like partial payments) can prove an agreement existed.

Common Defences (And How to Counter Them)

Subcontractors who refuse to pay often raise the same defences:

“The work was defective.” Counter: Provide photos, independent reports, or evidence that any defects were minor or have been rectified. Under security of payment laws, payment cannot be withheld for minor defects — the respondent must pay and pursue a separate claim for rectification costs.

“We never agreed to that price.” Counter: Produce the quote, email confirmation, or text message where the price was discussed. If there was a variation, show evidence that it was requested or approved.

“You didn’t finish the job.” Counter: Provide photos, signed completion certificates, or evidence that the respondent took possession of the work. If the job was partially complete, claim for the value of work done to date.

“We’re waiting for payment from the head contractor.” Counter: This is not a defence. Your contract is with the subcontractor, not the head contractor. Their cash flow problems do not relieve them of the obligation to pay you.

How Claim Done Helps Subbies Recover Unpaid Invoices

Claim Done is built for tradies, subbies, and small business owners who need legal-style documents fast — without paying lawyer fees.

Letter of Demand — $79 Upload your invoice and evidence. The Proprietary AI Engine drafts a letter citing the applicable security of payment legislation and delivers it automatically via email and registered post. Most disputes settle at this stage.

Tribunal Application — $197 If the letter does not work, Claim Done prepares a complete tribunal application pack — application form, witness statement, legal submissions, and evidence bundle — ready to file in your state’s tribunal.

Deed of Settlement — $97 If the respondent agrees to pay in instalments, Claim Done prepares a binding settlement agreement protecting your rights if they default.

All services are flat-fee, no subscription, Australia-wide, and delivered within 60 minutes.

When to Get a Lawyer

For most unpaid subcontractor invoices under $25,000, you do not need a lawyer. The letter of demand, payment claim, and tribunal processes are designed for self-represented parties.

You should consider a lawyer if:

• The claim is over $100,000
• The respondent has filed for bankruptcy or liquidation
• There is a complex contractual dispute involving multiple parties
• The respondent has engaged a lawyer and you feel out of your depth

For everything else, Claim Done gives you the documents you need to recover the debt yourself.

Recover Your Money Fast

If a subcontractor didn’t pay you in Australia, start with a letter of demand. If that does not work, serve a payment claim or file a tribunal application. Most subbies recover the full amount without ever stepping into a courtroom.

Upload your invoice to ClaimDone’s letter of demand service for unpaid invoices, answer a few questions, and get a professionally drafted demand letter in under an hour — for $97, no lawyer required.

Frequently Asked Questions

Can I use security of payment laws if I don't have a written contract?

Yes. Security of payment laws apply to all construction contracts, whether written, oral, or implied by conduct. Evidence like emails, text messages, invoices, and partial payments can prove a contract existed.

How long do I have to serve a payment claim in Australia?

The timeframe varies by state, but generally you must serve a payment claim within 12 months of completing the work or supplying the goods. Check your state’s security of payment legislation for the exact deadline.

What happens if the subcontractor ignores my letter of demand?

If they do not respond or pay within the deadline, you can escalate to a payment claim under security of payment laws, or file a tribunal application to recover the debt through a binding court order.

Can I claim interest on the unpaid invoice?

Yes. You can claim interest under penalty interest legislation in most states or as specified in your contract. Tribunals and adjudicators routinely award interest on unpaid invoices from the due date until payment.

Do I need a lawyer to apply for adjudication?

No. Adjudication is designed for self-represented parties. You submit written evidence and submissions, and the adjudicator makes a binding determination. Most subbies handle adjudication themselves or use a document service like Claim Done to prepare the application.