Jamie Watts and Matthew Hawke- Recent Developments in Security of Payment

1. Recent Developments in
Security of Payment
Presented by Matthew Hawke & Jamie Watts
15 September 2015

2. Recent Developments in Security of Payment
• Report on Security of Payment published by the Society
of Construction Law in February 2014: “East Coast”
regime is effective at obtaining recovery for claimants
entitled to progress payments, but flawed in its operation
in several respects
• Victorian Security of Payment legislation not substantially
amended since 2007
• New South Wales and Queensland legislatures have
both amended their Acts recently

3. New South Wales Developments
• Maximum payment terms apply to all construction
contracts
• A payment claim no longer needs to include any
endorsement that it is made under the Act
• A payment claim made by a head contractor must now
include a supporting statement declaring that all
subcontractors have been paid
• Head contractors must deposit retention monies withheld
from subcontractors into a trust account

4. Queensland Developments
• Separate set of time-scales for “complex” payment
claims (claims greater than $750,000)
• Respondent allowed 15 business days to provide a
payment schedule / 15 business days to provide an
adjudication response
• Respondents to complex payment claims entitled to raise
new reasons for non-payment in their adjudication
responses, even if not raised in the payment schedule
• Claimant will also be afforded an additional right of reply

5. Queensland Developments
• Queensland Building and Construction Commission has
established an adjudication registry (taking place of
nominating authorities)
• More stringent skills and qualifications requirements for
adjudicators, including the requirement of continuing
professional development

6. Queensland Developments
• Further minor changes:
– Time for serving a payment claim after work complete
reduced from 12 to six months
– Final claim must be served within 28 days after the
expiry of the defects liability period
– The period from three business days before
Christmas to ten business days after New Year’s Day
not counted as business days for the purpose of the
Act

7. Western Australian Developments
• No material changes to the Western Australian Act since
its introduction into force on 1 January 2005
• Review underway through Western Australia’s
Department of Commerce

8. South Australian Developments
• South Australia’s Office of the Small Business
Commissioner has taken control of the administration of
the Act
• OSBC has proposed an adjudication panel to replace the
operation of Nominating Authorities in South Australia
• Review underway through OSBC

9. Where to from here?
• Harmonisation of the Security of Payment legislation
throughout Australia is unlikely
• Need to continue to manage increasingly dissimilar
legislation throughout Australia
• For-profit / fee-sharing Nominating Authorities are not
well regarded
• Adjudicators will need to be known to all states’
nomination bodies

10. Recent South Australian Security of Payment Cases
• Tagara Builders Pty Ltd v AP&L Services Pty Ltd [2015] SASC 30
• Linke Developments Pty Ltd v 21st Century Developments Pty Ltd
[2014] SASC 203
• Mykra Pty Ltd v All State Maintenance Pty Ltd [2014] SADC 149
• Built Environs Pty Ltd v Tali Engineering Pty Ltd [2013] SASC 84
• Kennett Pty Ltd v Stephen & John Janssen (unreported) (2013)
• Romaldi Constructions Pty Ltd v Adelaide Interior Linings Pty Ltd
[2013] SADC 39 & [2013] SASCFC 124

11. Summary
• South Australian decisions have largely adopted the
New South Wales approach
• The Court is willing to enquire about the conduct of the
parties and the adjudicator
• It is important to apply the requirement for
“natural justice”
• South Australian Courts may extend the scope of matters
that might be open to review on a writ of certiorari

12. Recent Developments in
Security of Payment
Presented by Matthew Hawke & Jamie Watts
15 September 2015

13. Questions?