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This is a Bill, not an Act. For current law, see the Acts databases.
Building and Construction Industry
Security of Payment Amendment
Bill 2010
No , 2010
A Bill for
An Act to amend the Building and Construction Industry Security of Payment
Act 1999 to make further provision for securing the payment of progress payments
under contracts for construction work.
Building and Construction Industry Security of Payment Amendment
Clause 1 Bill 2010
The Legislature of New South Wales enacts: 1
1 Name of Act 2
This Act is the Building and Construction Industry Security of Payment 3
Amendment Act 2010. 4
2 Commencement 5
This Act commences on a day or days to be appointed by proclamation. 6
Page 2
Building and Construction Industry Security of Payment Amendment
Bill 2010
Amendment of Building and Construction Industry Security of Payment Act Schedule 1
1999 No 46
Schedule 1 Amendment of Building and 1
Construction Industry Security of 2
Payment Act 1999 No 46 3
[1] Part 3, Division 2A 4
Insert after Division 2 of Part 3: 5
Division 2A Claimant's rights against principal 6
contractor 7
26A Principal contractor can be required to retain money owed to 8
respondent 9
(1) A claimant who has made an adjudication application for a 10
payment claim can require a principal contractor for the claim to 11
retain sufficient money to cover the claim out of money that is or 12
becomes payable by the principal contractor to the respondent. 13
(2) Such a requirement is made by serving on the principal contractor 14
a request (a payment withholding request) in the form approved 15
by the Director-General of the Department of Services, 16
Technology and Administration. 17
(3) A principal contractor for a claim is a person by whom money is 18
or becomes payable to the respondent for work carried out or 19
materials supplied by the respondent to the person as part of or 20
incidental to the work or materials that the respondent engaged 21
the claimant to carry out or supply. 22
(4) A person who is served with a payment withholding request 23
must, within 10 business days after receiving the request, notify 24
the claimant concerned if the person is not (or is no longer) a 25
principal contractor for the claim. 26
Maximum penalty: 5 penalty units. 27
Note. A person may no longer be a principal contractor as a result of 28
money owed to the respondent having been paid by the person before 29
the payment withholding request was served. 30
26B Obligation of principal contractor to retain money owed to 31
respondent 32
(1) A principal contractor who has been served with a payment 33
withholding request must retain, out of money owed to the 34
respondent, the amount of money to which the payment claim 35
relates (or the amount owed by the principal contractor to the 36
respondent if that amount is less than the amount to which the 37
payment claim relates). 38
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Building and Construction Industry Security of Payment Amendment
Bill 2010
Schedule 1 Amendment of Building and Construction Industry Security of Payment Act
1999 No 46
(2) The amount is only required to be retained out of money that is 1
or becomes payable by the principal contractor to the respondent 2
for work carried out or materials supplied by the respondent to 3
the principal contractor as part of or incidental to the work or 4
materials that the respondent engaged the claimant to carry out or 5
supply. 6
(3) The obligation to retain money under this section remains in 7
force only until whichever of the following happens first: 8
(a) the adjudication application for the payment claim is 9
withdrawn, 10
(b) the respondent pays to the claimant the amount claimed to 11
be due under the payment claim, 12
(c) the claimant serves a notice of claim on the principal 13
contractor for the purposes of section 6 of the Contractors 14
Debts Act 1997 in respect of the payment claim, 15
(d) a period of 20 business days elapses after a copy of the 16
adjudicator's determination of the adjudication application 17
is served on the principal contractor. 18
(4) A part payment of the amount claimed to be due under the 19
payment claim removes the obligation under this section to retain 20
money to the extent of the payment. 21
(5) When the claimant's adjudication application is determined, the 22
claimant must serve a copy of the adjudicator's determination on 23
the principal contractor within 5 business days after the 24
adjudicator's determination is served on the claimant. 25
Maximum penalty: 5 penalty units. 26
26C Contravention of requirement by principal contractor 27
(1) If a principal contractor discharges the principal contractor's 28
obligation to pay money owed under a contract to the respondent 29
in contravention of a requirement under this Division to retain the 30
money, the principal contractor becomes jointly and severally 31
liable with the respondent in respect of the debt owed by the 32
respondent to the claimant (but only to the extent of the amount 33
of money to which the contravention relates). 34
(2) The principal contractor can recover as a debt from the 35
respondent any amount that the claimant recovers from the 36
principal contractor pursuant to a right of action conferred by this 37
section. 38
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Building and Construction Industry Security of Payment Amendment
Bill 2010
Amendment of Building and Construction Industry Security of Payment Act Schedule 1
1999 No 46
26D Protections for principal contractor 1
(1) An obligation under this Division to retain money owed by a 2
principal contractor to the respondent operates (while the 3
obligation continues) as a defence against recovery of the money 4
by the respondent from the principal contractor. 5
(2) Any period for which a principal contractor retains money 6
pursuant to an obligation under this Division is not to be taken 7
into account for the purposes of reckoning any period for which 8
money owed by the principal contractor to the respondent has 9
been unpaid. 10
(3) A claimant who has served a payment withholding request on a 11
principal contractor in connection with an adjudication 12
application must, if the adjudication application is withdrawn, 13
give the principal contractor written notice of the withdrawal of 14
the application within 5 business days after it is withdrawn. 15
Maximum penalty: 10 penalty units. 16
(4) The principal contractor is entitled to rely in good faith on a 17
statement in writing by the respondent in the form of a statutory 18
declaration that: 19
(a) a specified amount claimed to be due under an 20
adjudication application has been paid, or 21
(b) an adjudication application has been withdrawn. 22
26E Respondent to provide information about principal contractor 23
(1) An adjudicator may, in connection with an adjudication 24
application and at the request of the claimant, direct the 25
respondent to provide information to the claimant as to the 26
identity and contact details of any person who is a principal 27
contractor in relation to the claim. 28
(2) A respondent must comply with a direction of an adjudicator 29
under this section. 30
Maximum penalty: 10 penalty units. 31
(3) A respondent must not, in purported compliance with a direction 32
of an adjudicator under this section, provide information that the 33
respondent knows is false or misleading in a material particular. 34
Maximum penalty: 10 penalty units. 35
26F Other rights of claimant not affected 36
This Division (including any action taken by a claimant under 37
this Division) does not limit or otherwise affect the taking of any 38
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Building and Construction Industry Security of Payment Amendment
Bill 2010
Schedule 1 Amendment of Building and Construction Industry Security of Payment Act
1999 No 46
other action by a claimant to enforce a payment claim or 1
adjudication determination. 2
[2] Section 34A 3
Insert after section 34: 4
34A Nature of proceedings for offences 5
Proceedings for an offence under this Act may be dealt with 6
summarily before the Local Court. 7
[3] Schedule 2 Savings and transitional provisions 8
Insert at the end of clause 1 (1): 9
Building and Construction Industry Security of Payment 10
Amendment Act 2010 11
[4] Schedule 2, Part 4 12
Insert at the end of Schedule 2: 13
Part 4 Provisions consequent on enactment of 14
Building and Construction Industry 15
Security of Payment Amendment Act 2010 16
4 Application of amendments 17
An amendment made to this Act by the Building and 18
Construction Industry Security of Payment Amendment Act 2010 19
extends to matters arising before the commencement of the 20
amendment (including an adjudication application made before 21
that commencement and pending on that commencement). 22
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