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A single version of the Security of Payment Act is a mirage of wonders lingering on the horizon. Could it finally actually happen?

Well it seems so.

Just before Christmas last year, Senator Michaelia Cash released a statement advising that John Murray AM had been appointed to review Security of Payment laws in all states in light of the problematic inconsistencies between the various versions of the Act. These have been identified and discussed in previous inquiries, including the most recent Senate Economic Reference Committee’s inquiry that ran throughout 2015. Murray is to deliver a report to the federal government by the end of this year.

The release also notes that any alternate model of the Act is to also consider the Queensland version that existed before 2014 - that is, before the Queensland government completely screwed it up. That is great news, as this version echoes the ‘original’ NSW version before the NSW government also damaged that Act with its changes in 2015. This means the starting point of a potential federal Act is the most accessible, straight-forward, common-sense version of the Act which had served the industry very well for over a decade.

One of the possible recommendations of this inquiry may well be that Australia should adopt a single version of the Act for all states - in other words, establish federal legislation.

A single Act for the whole country, rather than the current eight different versions, is the way to go for the following reasons:

  1. The essential intention and adjudication based approach is the same everywhere, but each state has made small changes for no apparent reason. If the intention and purpose of the Act is the same everywhere, then the Act should be the same everywhere.
  2. The courts already take the position that precedents from one state can be held as judicial authority in another. This position is often taken whilst noting that the Acts in other states are very similar. If the Courts are satisfied that the Acts similar enough for interstate case law to ‘travel’ then why not simply have one law everywhere?
  3. The differences in the various forms of the Act serve no real purpose and only create confusion. The various states introduced tinkering-type changes that either serve no purpose or create only difficulty for the parties within the process.

Consider the following:

Every state has a different default due date for payment after a payment claim is served. In NSW, it is 30 business days for claims between head contractors and subcontractors, and 15 business days for claims between head contractors and principals. That is, unless it is connected to an exempt residential construction contract, in which case it is 10 business days. In Queensland, the A.C.T, Victoria and Tasmania, it is 10 business days no matter who you are. In South Australia, it is 15 business days, and in WA and the Territory, it is 28 days.

How about the default time period allowed, after last work, in which a payment claim can be made? In Queensland and South Australia it is six months from last work. In NSW, ACT, and Tassie, it is 12 months. In WA and the Northern Territory it is basically any time after you’ve carried out the work. In Victoria it is three months from when you last carried out work if the claim is a final claim. If it is not a final claim, then it is three months from the last reference date – which, under the Victorian Act, has several definitions.

And what about the time period allowed after receipt of the claim, in which to serve a payment schedule?

In NSW, ACT, Victoria, and Tassie, it is 10 business days. In South Australia, it is 15 business days. In Queensland, it is 10 business days for replying to a standard payment claim and 15 business days for complex payment claims. That is, unless the complex claim is served over 90 days after the reference date, in which case the schedule is due within 30 business days. In WA and NT, a payment schedule is called a notice of dispute and is due within 14 calendar days.

And as for adjudication, in NSW, ACT, and Tasmania you can lodge the adjudication application with an authorised nominating authority [ANA] who will have an adjudicator nominated to the application. In Queensland, you have to lodge it with the QBCC. In Victoria, you can lodge it with an ANA of your choice unless the contract contains a dispute resolution clause, in which a choice of at least three ANAs are offered. Where ANAs are involved, the parties do not contact or deal with the adjudicator directly. South Australia is looking to run the process through the Office of the Small Business Commissioner while WA and NT have a ‘prescribed appointer’ process that results in the parties dealing almost exclusively and directly with the adjudicator.

These differences serve no purpose at all in practice and have not made any one version of the Act any better than another. None of the inquiries noted any great benefit from these differences; only problems.

There are around 2,000 adjudication applications made each year in Australia. Do we really need eight different versions of the Act to deal with them?

I’ll be awaiting the outcome of this review and hope that sanity prevails.

 
  • No we don't need eight versions
    Bring in Federal over site and bring it quick to many are suffering

  • Security of Payment should be about ensuring the contractual chain is paid in full and on time. The terms of reference with this review are rubbish .

    This has been hijacked by adjudication and issues surrounding adjudication.

    We should be moving to keep the contractual chain out of adjudication and paid – that is the intention of security of payment .

    The senate inquiry recommended the use of secured trusts to protect the 350,000 small businesses trying to get paid. The thinking is that it is not fair for subcontractors to commit labour, materials and machinery to a construction project – to improve a property – to increase the revenue of a builder and not be paid . Instead we are focusing on the differences in adjudication methods in different states .

    The ABCC amendment is called Security of Psyment ,- SUBCONTRACTORS ALLIANCE

  • The dispute industry has become an industry within an industry. If proper Security of Payment measures were implemented to secure the significant revenue of subcontractors we would see an end to Phoenix trading and to the dispute industry to a large degree. Unfortunately we have the beneficiaries of the dispute industry running this review and the interests of subcontractors pushed to one side.

    Everybody is feeding off the bones of innocent small business. What damage do you think that is actually doing to our productivity and economy – not to mention the lives of everyday Australians.

    It isn't about adjudication it is about keeping subcontractors out of adjudication. What is occurring here indicates to us that Ministet Cash knows nothing of what's required or doesn't care. Reports that one peak industry group donated $70k to the federal liberals and one big Melbourne builder a further $192 k prior to the ABCC indicates how you get what you want from Cash.

    In addition another Melbourne builder and developer tipped in a couple of hundred thousand to keep 1 Nation and the voice of the people on side and secured their senate vote straight away.

    There is no Security of Payment just self interest and the defrauding of innocent people

    SUBCONTRACTORS ALLIANCE

  • No amount of inquiries or special appointments or panel discussions about tweaking the security of payments legislation, or learned articles by lawyers and professors about ADF and adjudication, will make the slightest difference. This has been going on for 20 years and it has been a colossal failure. How much failure does it take for it to be recognised as fundamentally flawed, and nothing more than a feeding frenzy for lawyers and others who have achieved nothing except perpetuating and legitimising oppression and robbery of the people who do the actual productive work in the building industry? The building industry is a pyramid scheme run by criminal corporations and funded by subcontractors who have been reduced to the level of 21st century serfdom. And we look to governments who have proven themselves to be ineffectual to do something about it? You gotta be kidding.

  • Security of payment legislation? There's no security and there's no payment. Surely it is time to come up with a more accurate title?

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