Building and Construction Industry Security of Payment Act

The industry has continually experienced frustration and sometimes anger at only being paid a portion of rightful entitlement or worse still not being paid at all. When confronted with this scenario the only way forward was to agree to a lesser amount or be faced with the prospect of an even more frustrating contractual or legal challenge that consumes time and money at an alarming rate with little hope of a satisfactory outcome.

This Act introduces a process where if a payment dispute arises the Claimant can make an adjudication application and receive an Adjudicator’s determination in a fast and efficient manner. If the Claimant’s case and submission is commendable and success follows the Respondent must pay the adjudicated amount to the Claimant. It then becomes the Respondent’s decision whether to pursue other contractual or legal challenges through alternate processes. This in effect places the Respondent in the same position as the Claimant in the above-mentioned scenario. The roles have reversed.

Cash flow forms the financial basis of the building and construction industry, in time this Act will change the payment culture of the building and construction industry resulting in cash being distributed in a far more equitable manner.

The Act applies to all construction contracts in New South Wales entered into on or after the 26th March 2000. The Act applies to all construction work including goods and services related to the construction contract. If required the Act can also provide a far more streamlined path through the court system.

The Act does not override contract conditions other than providing an independent adjudication process for disputed payment claims, bans "paid when paid" clauses and permits the suspension of work for non-payment.

The four main players in the Act are as follows:

• Claimant - the party making the payment claim.

• Respondent - the party receiving the payment claim.

• Authorised Nominating Authority (ANA) - a body appointed by the Minister.

• Adjudicator - a "natural person" not a party to the Contract appointed by an ANA.

The five main documents involved in the Act are as follows:

• Payment Claim - is a tax invoice, progress claim, final claim, etc and is provided by the Claimant. (Claimant)

• Payment Schedule - is a response to the payment claim and is provided by the Respondent. (Respondent)

• Adjudication Application - is an application made to an ANA by the Claimant. (Download PDF or Download Word)

• Adjudication Response - is a response to the adjudication application and is made by the Respondent. (Download PDF or Download Word)

• Adjudication Certificate - an adjudication certificate is a document produced by the ANA at the written request of the Claimant.

If after the adjudication process is complete and if the Claimant is successful and if the Respondent has failed to pay the adjudicated amount then the Claimant can request that the ANA provide the Claimant with an adjudication certificate.

The adjudication certificate is for the purposes of debt recovery through the court processes, this document has the ability to fast track the court process.

If assistance or further information is required please contact us on 1300 722 624