Security of Payment Act changes commencing this month

Amendments to the Building and Construction Industry Security of Payment Act 1999 and the associated regulations commence 21 October 2019. Those already using the Act, as well as those in the construction industry who would like to improve cash flow, should familiarise themselves with the operation of the Act and the impact of the changes.

Key changes include:

• the requirement for a payment claim to state that it is made under the Act has been reinstated. Previous reforms removed the need to include this statement however now it is back;
• “reference dates” have now been removed as a precondition to the right to receive payment;
• the time for payment to subcontractors has been reduced from 30 business days to 20 business days;
• there are now provisions that expressly deal with withdrawal of adjudication applications;
• the Supreme Court has the ability to set aside part of an adjudicator’s determination that may be affected by jurisdictional error and confirm the balance of the determination or to set aside the determination in full.

The changes are a further attempt to streamline the legislation and improve its use as a tool to improve cash flow in the industry. They will apply to construction contracts entered into after the commencement date of 21 October 2019.