The past year has shown that Security of Payment (
SOP) is still a pertinent area of interest across the country. We provide a summary of the key developments below, as well as a comprehensive analysis that is available to download.
New South Wales
Following major amendments to the New South Wales SOP Act in 2019, the new Regulation commenced on 1 September 2020. This repealed and replaced the 2008 Regulation and introduced a further four key changes to the SOP process. These changes should further reinforce the positive cashflow implications that resulted from the changes introduced in 2019. While NSW is still waiting to see how many of these changes will be tested in the courts, the key SOP decisions in 2020 demonstrated an emerging trend for entitlements to payment to be preserved wherever possible under the NSW Act.
Northern Territory and South Australia
It was a modest year for decisions arising out of the SOP process in both the NT and SA. Some significant changes to the NT Act came into effect on 3 February 2020. These changes improved the efficacy of the adjudication process and made it easier for payment disputes to be resolved quickly. However, despite the release of an amending SA Bill for consultation in December 2019 and substantial industry input on the draft, another year has passed without amendment to the SA SOP Act.
Queensland
Further changes to the Building Industry Fairness (Security of Payment) Act 2017 were introduced on 1 October 2020. These changes were to the statutory adjudication process and have created a more claimant-friendly SOP process by providing further protection for claimants. This is expected to continue the increasing number of adjudication applications made in QLD.
Victoria
The key decisions in 2020 demonstrated a willingness of the courts to continue to uphold the breadth of the unique excluded amounts regime. This regime operates to restrain both principals and contractors from agitating claims for time-related compensation, amongst other things.
Western Australia
A new bill was introduced to repeal and replace the existing security of payment regime. The proposed changes include voiding 'unfair' time bars, as well as adjusting the adjudication process to bring it in line with and adopt features of the 'East coast model'. The existing Act will continue to apply until the new bill is passed.
We hope you find our comprehensive analysis of these key developments useful. Please contact our team if you have any questions or feedback.
