In a year of further change for security of payment regimes around the country, major amendments to the New South Wales legislation commenced in October 2019. These changes should have positive cashflow implications for contractors as they are now entitled to make payment claims each named month for work performed during that named month, and the due date for subcontractor payment has been shortened to 20 business days. However, by reinstating the obligation to state that a payment claim is made under the NSW Act, New South Wales is now inconsistent with Queensland, which disposed of that requirement in the Qld BIF Act in 2018.
We will wait to see during 2020 the effect of new powers for authorised officers and investigators from State bodies to enforce compliance with the NSW Act and to require a person to produce documents and answer questions. The same goes for directors and managers of corporations, who can now be held liable for offences committed by their corporations.
In Queensland, the implementation of the Qld BIF Act continued, a review of the project bank accounts framework was conducted which will see changes to the Qld BIF Act in 2020 to allow for a new approach to be taken, and a new Bill for further legislative reform was drafted for debate in 2020.
In Western Australia, there were rumblings that the legislation may be overhauled so as to be more consistent with the NSW model, but no substantive reform has emerged yet.
In an otherwise quiet 2019 for Victoria, there were two important court decisions handed down; one which brought Victoria in line with an earlier New South Wales decision on the invalidity of prematurely served payment claims, and the second which found that an earlier suggestion that an amount claimed in a payment claim for previously-deducted liquidated damages is an 'excluded amount' under the Vic Act, was obiter.
In the Australian Capital Territory, the 'pay now, argue later' nature of the legislation was further entrenched by two decisions which found that to enliven the ACT Act it is sufficient to establish that a construction contract exists between the parties and that one party claims work was performed under it. Whether or not the work was actually performed under the construction contract does not affect a party's entitlement to serve a payment claim (and therefore does not affect an adjudicator's jurisdiction to determine the matter).
We hope you find our comprehensive analysis of the key 2019 security of payment developments useful. We would love to hear from you if you have any questions or feedback.