Building and Construction Industry Security of Payment Act 1999 - Shire Legal | Miranda | Sutherland Shire

Security of Payments

The Building and Construction Industry Security of Payment Act 1999 (NSW) provides a statutory entitlement for tradespeople who have provided work, goods or services, to make progress claims against the recipient of the work, goods or services, as long as the contract is not with a homeowner.

The Act applies to any construction project in New South Wales, whether private or public sector. Importantly, the Act cannot be contracted out of.

Those who can make a claim under the Act include:

Contractors against principals/developers
Subcontractors against contractors
Suppliers against customers
Plant and equipment hirers against clients
Consultants against clients.

The claim can be for:

construction work you have done
construction materials or plant you have provided
consulting services you have provided
interest on overdue progress payments
your losses and additional expenses due to work being deleted from your contract while you suspended work under the protection of the Act
cash security and retention monies
at the end of a contract, a claim under the Act can be made for the final payment.

The main benefit of the Act is that it enables quick adjudication of disputed progress payments and provides for a fairer payment system for all parties in the industry. It is much quicker and more cost effective than proving the debt before a Court. Commencing legal proceedings to recover a debt is inherently risky as well, particularly if the respondent allows itself to become insolvent and therefore avoid its payment obligations.

The typical progress claim timetable:

The claimant provides the respondent with a "Payment Claim".
The respondent has 10 days to provide the claimant with a Payment Schedule. If not, the respondent becomes liable to pay the full amount claimed. The unpaid portion of the debt becomes a statutory debt, which the claimant is entitled to recover independently of and irrespective of the terms of the construction contract.
If the claimant disputes the reasons for withholding payment (pursuant to the Payment Schedule), or if the respondent fails to pay the amount due by the due date, the claimant can apply to an Authorised Nominating Authority (ANA) for an independent adjudication of the amount to be paid. This must be done within 10 days of receiving the Payment Schedule.
If the respondent fails to pay the amount stated in the Payment Schedule by the due date, the claimant has 20 business days to apply for adjudication.
If the respondent fails to provide a Payment Schedule and pay the full claimed amount by the due date, the claimant must give the respondent notice that the matter would proceed to adjudication within 20 business days of the due date for payment.
Once an application for adjudication has been lodged, the adjudicator is required to provide a written decision on the amount due within 10 business days.

Once a determination has been made in favour of the claimant, the respondent has no alternative but to pay the amount claimed, unless it claims insolvency.

If you have become involved in a disagreement about building contract entitlements, Shire Legal strongly recommends that you seek prompt legal advice to ensure that your rights and entitlements are fully protected.

Contact Shire Legal to arrange a consultation with an experienced solicitor.

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Miranda NSW 2228 Australia

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Phone: 02 9526 3444 Fax: 02 9526 3499 Email: info@shirelegal.com.au