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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Building and Construction Industry
Security of Payment Bill 1999
Contents
Page
Part 1 Preliminary
1 Name of Act 2
2 Commencement 2
3 Object 2
4 Definitions 3
5 Definition of "construction work" 4
6 Definition of "related goods and services" 6
7 Application of Act 6
Part 2 Rights to progress payments
8 Rights to progress payments 8
9 Amount of progress payment 8
10 Valuation of construction work and related goods and
services 9
11 Due date for payment 10
12 Effect of "pay when paid" provisions 10
b99-071-p04.818
Building and Construction Industry Security of Payment Bill 1999
Contents
Page
Part 3 Procedure for recovering progress payments
Division 1 Payment claims and payment schedules
13 Payment claims 11
14 Payment schedules 11
15 Consequences of not paying claimant where no payment
schedule 12
16 Consequences of not paying claimant in accordance with
payment schedule 12
Division 2 Adjudication of disputes
17 Adjudication applications 13
18 Eligibility criteria for adjudicators 14
19 Appointment of adjudicator 15
20 Adjudication responses 15
21 Adjudication procedures 15
22 Adjudicator's determination 16
23 Respondent's obligations following adjudicator's
determination 17
24 Designated trust accounts 18
25 Consequences of not complying with adjudicator's
determination 19
26 Claimant may make new application if previous application
refused or not determined 20
Division 3 Claimant's right to suspend construction
work
27 Claimant may suspend work 20
Division 4 General
28 Nominating authorities 21
29 Adjudicator's fees 21
Contents page 2
Building and Construction Industry Security of Payment Bill 1999
Contents
Page
30 Exclusion of liability for adjudicator's acts and omissions 22
31 Service of notices 22
32 Effect of Part on civil proceedings 23
Part 4 Miscellaneous
33 Act binds Crown 24
34 No contracting out 24
35 Regulations 24
36 Amendment of Commercial Arbitration Act 1984 No 160 24
37 Savings and transitional provisions 24
38 Review of Act 25
Schedules
1 Amendment of Commercial Arbitration Act 1984 26
2 Savings and transitional provisions 27
Contents page 3
I certify that this PUBLIC BILL, which originated in the LEGISLATIVE ASSEMBLY, has
finally passed the LEGISLATIVE COUNCIL and the LEGISLATIVE ASSEMBLY of NEW
SOUTH WALES.
Clerk of the Legislative Assembly.
Legislative Assembly,
Sydney, , 1999
New South Wales
Building and Construction Industry
Security of Payment Bill 1999
Act No , 1999
An Act with respect to payments for construction work carried out, and related
goods and services supplied, under construction contracts; and for other purposes.
I have examined this Bill, and find it to correspond in all respects with the Bill as
finally passed by both Houses.
Chairman of Committees of the Legislative Assembly.
b99-071-p04.818
Clause 1 Building and Construction Industry Security of Payment Bill 1999
Part 1 Preliminary
The Legislature of New South Wales enacts:
Part 1 Preliminary
1 Name of Act
This Act is the Building and Construction Industry Security of
Payment Act 1999.
2 Commencement
This Act commences on a day or days to be appointed by
proclamation.
3 Object
(1) The object of this Act is to ensure that any person who carries out
construction work (or who supplies related goods and services) under
a construction contract is entitled to receive, and is able to recover,
specified progress payments in relation to the carrying out of such
work and the supplying of such goods and services.
(2) The means by which this Act ensures that a person is entitled to
receive a progress payment is by granting a statutory entitlement to
such a payment in circumstances where the relevant construction
contract fails to do so.
(3) The means by which this Act ensures that a person is able to recover
a progress payment is by establishing a procedure that involves:
(a) the making of a payment claim by the person claiming
payment, and
(b) the provision of a payment schedule by the person by whom the
payment is payable, and
(c) the referral of any disputed claim to an adjudicator for
determination, and
(d) the setting aside of money as security for payment of the
progress payment so determined.
(4) It is intended:
(a) that this Act does not limit any other entitlement that a person
may have under a construction contract, or any other remedy
that a person may have for recovering any such other
entitlement, and
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Building and Construction Industry Security of Payment Bill 1999 Clause 3
Preliminary Part 1
(b) in particular, that the setting aside of money as security does not
prejudice any claim, counter-claim or defence that may be
raised in civil proceedings concerning the work to which a
payment claim relates, but merely ensures that money will be
available to satisfy those entitlements when they are finally
determined.
4 Definitions
In this Act:
adjudicated amount means the amount of a progress payment that an
adjudicator determines to be payable, as referred to in section 22.
adjudication application means an application referred to in
section 17.
adjudication response means a response referred to in section 20.
adjudicator, in relation to an adjudication application, means the
person appointed in accordance with this Act to determine the
application.
authorised nominating authority means a person authorised by the
Minister under section 28 to nominate persons to determine
adjudication applications.
business day means any day other than:
(a) a Saturday, Sunday or public holiday, or
(b) 27, 28, 29, 30 or 31 December.
claimant means a person by whom a payment claim is served under
section 13.
claimed amount means an amount of a progress payment claimed to
be due for construction work carried out, or for related goods and
services supplied, as referred to in section 13.
construction contract means a contract or other arrangement under
which one party undertakes to carry out construction work, or to
supply related goods and services, for another party.
construction work is defined in section 5.
designated trust account means an account kept with a recognised
financial institution (whether in the name of the respondent or
otherwise) for the purpose of holding adjudicated amounts payable to
claimants under this Act.
Page 3
Clause 4 Building and Construction Industry Security of Payment Bill 1999
Part 1 Preliminary
due date, in relation to a progress payment, means the due date for the
progress payment, as referred to in section 11.
exercise a function includes perform a duty.
function includes a power, authority or duty.
payment claim means a claim referred to in section 13.
payment schedule means a schedule referred to in section 14.
progress payment means a payment to which a person is entitled
under section 8.
public authority means:
(a) a public or local authority constituted by or under an Act, or
(b) a Government Department, or
(c) a statutory body representing the Crown, or
(d) a statutory State owned corporation (and its subsidiaries) within
the meaning of the State Owned Corporations Act 1989,
and includes any person exercising functions on behalf of any such
authority, Department, body or corporation.
recognised financial institution means a bank or any other person or
body prescribed by the regulations for the purposes of this definition.
related goods and services is defined in section 6.
respondent means a person on whom a payment claim is served under
section 13.
scheduled amount means the amount of a progress payment that is
proposed to be made under a payment schedule, as referred to in
section 14.
5 Definition of "construction work"
(1) In this Act, construction work means any of the following work:
(a) the construction, alteration, repair, restoration, maintenance,
extension, demolition or dismantling of buildings or structures
forming, or to form, part of land (whether permanent or not),
(b) the construction, alteration, repair, restoration, maintenance,
extension, demolition or dismantling of any works forming, or
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Building and Construction Industry Security of Payment Bill 1999 Clause 5
Preliminary Part 1
to form, part of land, including walls, roadworks, power-lines,
telecommunication apparatus, aircraft runways, docks and
harbours, railways, inland waterways, pipelines, reservoirs,
water mains, wells, sewers, industrial plant and installations for
purposes of land drainage or coast protection,
(c) the installation in any building or structure of fittings forming,
or to form, part of land, including heating, lighting,
air-conditioning, ventilation, power supply, drainage, sanitation,
water supply, fire protection, security and communications
systems,
(d) the external or internal cleaning of buildings and structures, so
far as it is carried out in the course of their construction,
alteration, repair, restoration, maintenance or extension,
(e) any operation which forms an integral part of, or is preparatory
to or is for rendering complete, work of the kind referred to in
paragraph (a), (b) or (c), including:
(i) site clearance, earth-moving, excavation, tunnelling and
boring, and
(ii) the laying of foundations, and
(iii) the erection, maintenance or dismantling of scaffolding,
and
(iv) the prefabrication of components to form part of any
building or structure, whether carried out on-site or off-
site, and
(v) site restoration, landscaping and the provision of
roadways and other access works,
(f) the painting or decorating of the internal or external surfaces of
any building or structure,
(g) any other work of a kind prescribed by the regulations for the
purposes of this subsection.
(2) Despite subsection (1), construction work does not include any of the
following work:
(a) the drilling for, or extraction of, oil or natural gas,
(b) the extraction (whether by underground or surface working) of
minerals, including tunnelling or boring, or constructing
underground works, for that purpose,
(c) any other work of a kind prescribed by the regulations for the
purposes of this subsection.
Page 5
Clause 6 Building and Construction Industry Security of Payment Bill 1999
Part 1 Preliminary
6 Definition of "related goods and services"
(1) In this Act, related goods and services, in relation to construction
work, means any of the following goods and services:
(a) goods of the following kind:
(i) materials and components to form part of any building,
structure or work arising from construction work,
(ii) plant or materials (whether supplied by sale, hire or
otherwise) for use in connection with the carrying out of
construction work,
(b) services of the following kind:
(i) the provision of labour to carry out construction work,
(ii) architectural, design, surveying or quantity surveying
services in relation to construction work,
(iii) building, engineering, interior or exterior decoration or
landscape advisory services in relation to construction
work,
(c) goods and services of a kind prescribed by the regulations for
the purposes of this subsection.
(2) Despite subsection (1), related goods and services does not include
any goods or services of a kind prescribed by the regulations for the
purposes of this subsection.
7 Application of Act
(1) Subject to this section, this Act applies to any construction contract,
whether written or oral, or partly written and partly oral, and so applies
even if the contract is expressed to be governed by the law of a
jurisdiction other than New South Wales.
(2) This Act does not apply to:
(a) a construction contract that forms part of a loan agreement, a
contract of guarantee or a contract of insurance under which a
recognised financial institution undertakes:
(i) to lend money or to repay money lent, or
(ii) to guarantee payment of money owing or repayment of
money lent, or
(iii) to provide an indemnity with respect to construction
work carried out, or related goods and services supplied,
under the construction contract, or
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Building and Construction Industry Security of Payment Bill 1999 Clause 7
Preliminary Part 1
(b) a construction contract for the carrying out of residential
building work (within the meaning of the Home Building Act
1989) on such part of any premises as the party for whom the
work is carried out resides in or proposes to reside in, or
(c) a construction contract under which it is agreed that the
consideration payable for construction work carried out under
the contract, or for related goods and services supplied under
the contract, is to be calculated otherwise than by reference to
the value of the work carried out or the value of the goods and
services supplied.
(3) This Act does not apply to a construction contract to the extent to
which it contains:
(a) provisions under which a party undertakes to carry out
construction work, or supply related goods and services, as an
employee (within the meaning of the Industrial Relations Act
1996) of the party for whom the work is to be carried out or the
related goods and services are to be supplied, or
(b) provisions under which a party undertakes to carry out
construction work, or to supply related goods and services, as
a condition of a loan agreement with a recognised financial
institution, or
(c) provisions under which a party undertakes:
(i) to lend money or to repay money lent, or
(ii) to guarantee payment of money owing or repayment of
money lent, or
(iii) to provide an indemnity with respect to construction
work carried out, or related goods and services supplied,
under the construction contract.
(4) This Act does not apply to a construction contract to the extent to
which it deals with:
(a) construction work carried out outside New South Wales, and
(b) related goods and services supplied in respect of construction
work carried out outside New South Wales.
(5) This Act does not apply to any construction contract, or class of
construction contracts, prescribed by the regulations for the purposes
of this section.
Page 7
Clause 8 Building and Construction Industry Security of Payment Bill 1999
Part 2 Rights to progress payments
Part 2 Rights to progress payments
8 Rights to progress payments
(1) On and from each reference date under a construction contract, a
person:
(a) who has undertaken to carry out construction work under the
contract, or
(b) who has undertaken to supply related goods and services under
the contract,
is entitled to a progress payment under this Act, calculated by reference
to that date.
(2) In this section, reference date, in relation to a construction contract,
means:
(a) a date determined by or in accordance with the terms of the
contract as:
(i) a date on which a claim for a progress payment may be
made, or
(ii) a date by reference to which the amount of a progress
payment is to be calculated,
in relation to work carried out or to be carried out (or related
goods and services supplied or to be supplied) under the
contract, or
(b) if the contract makes no express provision with respect to the
matter, the date occurring 4 weeks after the previous reference
date or (in the case of the first reference date) the date occurring
4 weeks after construction work was first carried out (or related
goods and services were first supplied) under the contract.
9 Amount of progress payment
The amount of a progress payment to which a person is entitled in
respect of a construction contract is to be:
(a) the amount calculated in accordance with the terms of the
contract, or
Page 8
Building and Construction Industry Security of Payment Bill 1999 Clause 9
Rights to progress payments Part 2
(b) if the contract makes no express provision with respect to the
matter, the amount calculated on the basis of the value of
construction work carried out by the person (or of related goods
and services supplied by the person) under the contract.
10 Valuation of construction work and related goods and services
(1) Construction work carried out under a construction contract is to be
valued:
(a) in accordance with the terms of the contract, or
(b) if the contract makes no express provision with respect to the
matter, having regard to:
(i) the contract price for the work, and
(ii) any other rates or prices set out in the contract, and
(iii) any variation agreed to by the parties to the contract by
which the contract price, or any other rate or price set
out in the contract, is to be adjusted by a specific
amount, and
(iv) if any of the work is defective, the estimated cost of
rectifying the defect.
(2) Related goods and services supplied under a construction contract are
to be valued:
(a) in accordance with the terms of the contract, or
(b) if the contract makes no express provision with respect to the
matter, having regard to:
(i) the contract price for the goods and services, and
(ii) any other rates or prices set out in the contract, and
(iii) any variation agreed to by the parties to the contract by
which the contract price, or any other rate or price set
out in the contract, is to be adjusted by a specific
amount, and
(iv) if any of the goods are defective, the estimated cost of
rectifying the defect,
and, in the case of materials and components that are to form
part of any building, structure or work arising from construction
work, on the basis that the only materials and components to be
included in the valuation are those that have become (or, on
payment, will become) the property of the party for whom
construction work is being carried out.
Page 9
Clause 11 Building and Construction Industry Security of Payment Bill 1999
Part 2 Rights to progress payments
11 Due date for payment
A progress payment under a construction contract becomes due and
payable:
(a) on the date on which the payment becomes due and payable in
accordance with the terms of the contract, or
(b) if the contract makes no express provision with respect to the
matter, on the date occurring 2 weeks after a payment claim is
made under Part 3 in relation to the payment.
12 Effect of "pay when paid" provisions
(1) A pay when paid provision of a construction contract has no effect in
relation to any payment for construction work carried out (or for
related goods and services supplied) under the contract.
(2) In this section:
money owing, in relation to a construction contract, means money
owing for construction work carried out (or for related goods and
services supplied) under the contract.
pay when paid provision of a construction contract means a provision
of the contract:
(a) that makes the liability of one party (the first party) to pay
money owing to another party (the second party) contingent on
payment to the first party by a further party (the third party) of
the whole or any part of that money, or
(b) that makes the due date for payment of money owing by the
first party to the second party dependent on the date on which
payment of the whole or any part of that money is made to the
first party by the third party.
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Building and Construction Industry Security of Payment Bill 1999 Clause 13
Procedure for recovering progress payments Part 3
Payment claims and payment schedules Division 1
Part 3 Procedure for recovering progress payments
Division 1 Payment claims and payment schedules
13 Payment claims
(1) A person who is entitled to a progress payment under a construction
contract (the claimant) may serve a payment claim on the person who
under the contract is liable to make the payment.
(2) A payment claim:
(a) must identify the construction work (or related goods and
services) to which the progress payment relates, and
(b) must indicate the amount of the progress payment that the
claimant claims to be due for the construction work done (or
related goods and services supplied) to which the payment
relates (the claimed amount), and
(c) must state that it is made under this Act.
14 Payment schedules
(1) A person on whom a payment claim is served (the respondent) may
reply to the claim by providing a payment schedule to the claimant.
(2) A payment schedule:
(a) must identify the payment claim to which it relates, and
(b) must indicate the amount of the payment (if any) that the
respondent proposes to make (the scheduled amount).
(3) If the scheduled amount is less than the claimed amount, the schedule
must indicate why the scheduled amount is less and (if it is less
because the respondent is withholding payment for any reason) the
respondent's reasons for withholding payment.
(4) If:
(a) a claimant serves a payment claim on a respondent, and
(b) the respondent does not provide a payment schedule to the
claimant:
(i) within the time required by the relevant construction
contract, or
Page 11
Clause 14 Building and Construction Industry Security of Payment Bill 1999
Part 3 Procedure for recovering progress payments
Division 1 Payment claims and payment schedules
(ii) within 10 business days after the payment claim is
served,
whichever time expires earlier,
the respondent becomes liable to pay the claimed amount to the
claimant on the due date for the progress payment to which the
payment claim relates.
15 Consequences of not paying claimant where no payment schedule
(1) This section applies if the respondent:
(a) becomes liable to pay the claimed amount to the claimant under
section 14 (4) as a consequence of having failed to provide a
payment schedule to the claimant within the time allowed by
that section, and
(b) fails to pay the whole or any part of the claimed amount on or
before the due date for the progress payment to which the
payment claim relates.
(2) In those circumstances, the claimant:
(a) may recover the unpaid portion of the claimed amount from the
respondent, as a debt due to the claimant, in any court of
competent jurisdiction, and
(b) may serve notice on the respondent of the claimant's intention
to suspend carrying out construction work (or to suspend
supplying related goods and services) under the construction
contract.
(3) A notice referred to in subsection (2) (b) must state that it is made
under this Act.
(4) Judgment in favour of the claimant is not to be entered unless the court
is satisfied of the existence of the circumstances referred to in
subsection (1).
16 Consequences of not paying claimant in accordance with payment
schedule
(1) This section applies if:
(a) a claimant serves a payment claim on a respondent, and
(b) the respondent provides a payment schedule to the claimant:
(i) within the time required by the relevant construction
contract, or
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Building and Construction Industry Security of Payment Bill 1999 Clause 16
Procedure for recovering progress payments Part 3
Payment claims and payment schedules Division 1
(ii) within 10 business days after the payment claim is
served,
whichever time expires earlier, and
(c) the payment schedule indicates a scheduled amount that the
respondent proposes to pay to the claimant, and
(d) the respondent fails to pay the whole or any part of the
scheduled amount to the claimant on or before the due date for
the progress payment to which the payment claim relates.
(2) In those circumstances, the claimant:
(a) may recover the unpaid portion of the scheduled amount from
the respondent, as a debt due to the claimant, in any court of
competent jurisdiction, and
(b) may serve notice on the respondent of the claimant's intention
to suspend carrying out construction work (or to suspend
supplying related goods and services) under the construction
contract.
(3) A notice referred to in subsection (2) (b) must state that it is made
under this Act.
(4) Judgment in favour of the claimant is not to be entered unless the court
is satisfied of the existence of the circumstances referred to in
subsection (1).
Division 2 Adjudication of disputes
17 Adjudication applications
(1) If the scheduled amount indicated by a payment schedule is less than
the claimed amount indicated in the payment claim, the claimant may
apply for adjudication of the progress payment to be made (an
adjudication application).
(2) An adjudication application:
(a) must be in writing, and
(b) must identify the payment claim and the payment schedule to
which it relates, and
(c) may contain such submissions relevant to the application as the
claimant chooses to include.
Page 13
Clause 17 Building and Construction Industry Security of Payment Bill 1999
Part 3 Procedure for recovering progress payments
Division 2 Adjudication of disputes
(3) An adjudication application:
(a) must be made:
(i) to an adjudicator chosen by agreement between the
claimant and the respondent (being a person who is
eligible to be an adjudicator as referred to in section 18),
or
(ii) if no adjudicator is agreed on, to an authorised
nominating authority chosen by agreement between the
claimant and the respondent, or
(iii) if no nominating authority is agreed on, to an authorised
nominating authority chosen by the claimant, and
(b) must be made within 5 business days after the claimant receives
the payment schedule.
(4) No agreement between the claimant and the respondent that was made
before the claimant received the payment schedule has any effect in
relation to the choice of an adjudicator under subsection (3) (a) (i).
(5) A copy of the adjudication application must be served on the
respondent.
(6) This section does not limit the operation of any provision of the
construction contract in relation to the resolution of disputes between
the claimant and the respondent.
(7) It is the duty of an authorised nominating authority to which an
adjudication application is made to refer the application to an
adjudicator (being a person who is eligible to be an adjudicator as
referred to in section 18) as soon as practicable.
18 Eligibility criteria for adjudicators
(1) A person is eligible to be an adjudicator in relation to a construction
contract:
(a) if the person is a natural person, and
(b) if the person has such qualifications, expertise and experience
as may be prescribed by the regulations for the purposes of this
section.
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Building and Construction Industry Security of Payment Bill 1999 Clause 18
Procedure for recovering progress payments Part 3
Adjudication of disputes Division 2
(2) A person is not eligible to be an adjudicator in relation to a particular
construction contract:
(a) if the person is a party to the contract, or
(b) in such circumstances as may be prescribed by the regulations
for the purposes of this section.
19 Appointment of adjudicator
(1) An adjudicator accepts an adjudication application by causing notice
of acceptance to be served on the claimant and the respondent.
(2) On accepting an adjudication application, the adjudicator is taken to
have been appointed to determine the application.
20 Adjudication responses
(1) The respondent may lodge with the adjudicator a response to the
claimant's adjudication application (the adjudication response) at any
time within:
(a) 5 business days after receiving a copy of the application, or
(b) 2 business days after receiving notice of an adjudicator's
acceptance of the application,
whichever time expires later.
(2) The adjudication response:
(a) must be in writing, and
(b) must identify the adjudication application to which it relates,
and
(c) may contain such submissions relevant to the response as the
respondent chooses to include.
(3) A copy of the adjudication response must be served on the claimant.
21 Adjudication procedures
(1) An adjudicator is not to determine an adjudication application until
after the end of the period within which the respondent may lodge an
adjudication response.
(2) An adjudicator is not to consider an adjudication response unless it
was made before the end of the period within which the respondent
may lodge such a response.
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Clause 21 Building and Construction Industry Security of Payment Bill 1999
Part 3 Procedure for recovering progress payments
Division 2 Adjudication of disputes
(3) Subject to subsections (1) and (2), an adjudicator is to determine an
adjudication application as expeditiously as possible and, in any case:
(a) within 10 business days after the date on which the adjudicator
notified the claimant and the respondent as to his or her
acceptance of the application, or
(b) within such further time as the claimant and the respondent
may agree.
(4) For the purposes of any proceedings conducted to determine an
adjudication application, an adjudicator:
(a) may request further written submissions from either party and
must give the other party an opportunity to comment on those
submissions, and
(b) may set deadlines for further submissions and comments by the
parties, and
(c) may call a conference of the parties, and
(d) may carry out an inspection of any matter to which the claim
relates.
(5) The adjudicator's power to determine an adjudication application is not
affected by the failure of either or both of the parties to make a
submission or comment within time or to comply with the
adjudicator's call for a conference of the parties.
22 Adjudicator's determination
(1) An adjudicator is to determine:
(a) the amount of the progress payment (if any) to be paid by the
respondent to the claimant (the adjudicated amount), and
(b) the date on which any such amount became or becomes
payable.
(2) In determining an adjudication application, the adjudicator is to
consider the following matters only:
(a) the provisions of this Act,
(b) the provisions of the construction contract from which the
application arose,
(c) the payment claim to which the application relates, together
with all submissions (including relevant documentation) that
have been duly made by the claimant in support of the claim,
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Building and Construction Industry Security of Payment Bill 1999 Clause 22
Procedure for recovering progress payments Part 3
Adjudication of disputes Division 2
(d) the payment schedule to which the application relates, together
with all submissions (including relevant documentation) that
have been duly made by the respondent in support of the
schedule,
(e) the results of any inspection carried out by the adjudicator of
any matter to which the claim relates.
(3) The adjudicator's determination must be in writing and must include:
(a) the reasons for the determination, and
(b) the basis on which any amount or date has been decided,
if, before the making of the determination, either the claimant or the
respondent requests the adjudicator to include those matters in the
determination.
23 Respondent's obligations following adjudicator's determination
(1) If an adjudicator determines an adjudication application by determining
that the respondent must pay an adjudicated amount to the claimant,
the respondent:
(a) must pay that amount to the claimant, or
(b) must give security for payment of that amount to the claimant
pending the final determination of the matters in dispute
between them.
(2) The security given by a respondent may be in any of the following
forms:
(a) an unconditional promise by a recognised financial institution
to pay to the claimant, on demand, the adjudicated amount, or
(b) payment of the adjudicated amount into a designated trust
account, or
(c) such other form as may be agreed between the claimant and the
respondent.
(3) If the respondent is a public authority, the security may be in the form
of a certificate by the authority to the effect that sufficient money will
be legally available for payment of any amount up to the adjudicated
amount if and when any such amount becomes payable.
Page 17
Clause 23 Building and Construction Industry Security of Payment Bill 1999
Part 3 Procedure for recovering progress payments
Division 2 Adjudication of disputes
(4) Except with the consent of the parties, it is unlawful for the claimant
to enforce any security given under this section until at least 2 business
days after any matters in dispute between them in connection with the
progress payment to which the security relates have been finally
determined.
(5) For the purposes of subsection (4), a determination becomes final:
(a) in the case of a determination from which there is no right of
appeal or review, when the determination is made, or
(b) in the case of a determination from which there is a right of
appeal or review, when the right of appeal or review expires or
(if the determination becomes subject to appeal or review
proceedings) when those proceedings have been finally
disposed of.
24 Designated trust accounts
(1) On paying money into a designated trust account as referred to in
section 23 (2) (b), the respondent is to cause notice of that fact,
together with particulars identifying the account and the recognised
financial institution with which the account is kept, to be given to the
claimant.
(2) Money held in a designated trust account (including any interest
accruing to such money) is taken to be held on the following trusts:
(a) to the extent to which the money is required to satisfy the
claimant's entitlements, the money is to be applied in
satisfaction of those entitlements,
(b) the claimant's entitlements in respect of an earlier progress
claim are to be satisfied before the claimant's entitlements in
respect of a later progress claim,
(c) to the extent to which any of the money remains in the account
after the claimant's entitlements have been fully satisfied, the
money is to be paid to the respondent.
(3) Subject to subsection (2), the regulations may make provision for or
with respect to the establishment and operation of designated trust
accounts.
Page 18
Building and Construction Industry Security of Payment Bill 1999 Clause 24
Procedure for recovering progress payments Part 3
Adjudication of disputes Division 2
(4) In this section, claimant's entitlements, in relation to money held in
a designated trust account, means the amount (if any) to which the
claimant becomes entitled after any matters in dispute between them
in connection with the progress payment to which the money relates
have been finally determined.
(5) For the purposes of subsection (4), a determination becomes final:
(a) in the case of a determination from which there is no right of
appeal or review, when the determination is made, or
(b) in the case of a determination from which there is a right of
appeal or review, when the right of appeal or review expires or
(if the determination becomes subject to appeal or review
proceedings) when those proceedings have been finally
disposed of.
25 Consequences of not complying with adjudicator's determination
(1) This section applies if, on or before the relevant date, a respondent fails
to do one or other of the following:
(a) to pay the whole or any part of the adjudicated amount to a
claimant,
(b) to give security for payment of the whole or any part of the
adjudicated amount to a claimant.
(2) In those circumstances, the claimant:
(a) may recover the unpaid, or unsecured, portion of the
adjudicated amount from the respondent, as a debt due to the
claimant, in any court of competent jurisdiction, and
(b) may serve notice on the respondent of the claimant's intention
to suspend carrying out construction work (or to suspend
supplying related goods and services) under the construction
contract.
(3) A notice referred to in subsection (2) (b) must state that it is made
under this Act.
(4) Judgment in favour of the claimant is not to be entered unless the court
is satisfied of the existence of the circumstances referred to in
subsection (1).
Page 19
Clause 25 Building and Construction Industry Security of Payment Bill 1999
Part 3 Procedure for recovering progress payments
Division 2 Adjudication of disputes
(5) In this section, relevant date means:
(a) the date occurring 2 business days after the date on which the
relevant determination is made under section 22, or
(b) if the adjudicator determines a later date under section 22 (1)
(b), that later date.
26 Claimant may make new application if previous application refused or
not determined
(1) This section applies if:
(a) a claimant fails to receive an adjudicator's notice of acceptance
of an adjudication application within 4 business days after the
application is made, or
(b) an adjudicator who accepts an adjudication application fails to
determine the application within the time allowed by section 21
(3).
(2) In either of those circumstances, the claimant:
(a) may withdraw the application, by notice in writing served on
the adjudicator or authorised nominating authority to whom the
application was made, and
(b) may make a new adjudication application under section 17.
(3) Despite section 17 (3) (b), a new adjudication application may be made
at any time within 5 business days after the claimant becomes entitled
to withdraw the previous adjudication application under subsection (2).
(4) This Division applies to a new application referred to in this section in
the same way as it applies to an application under section 17.
Division 3 Claimant's right to suspend construction work
27 Claimant may suspend work
(1) A claimant may suspend the carrying out of construction work (or the
supply of related goods and services) under a construction contract if
at least 2 business days have passed since the claimant has caused
notice of intention to do so to be given to the respondent under section
15, 16 or 25.
Page 20
Building and Construction Industry Security of Payment Bill 1999 Clause 27
Procedure for recovering progress payments Part 3
Claimant's right to suspend construction work Division 3
(2) The right conferred by subsection (1) exists only for so long as the
respondent fails to comply with the requirements referred to in section
15 (1), 16 (1) or 25 (1), as the case may be.
(3) A claimant who suspends construction work (or the supply of related
goods and services) in accordance with the right conferred by
subsection (1) is not liable for any loss or damage suffered by the
respondent, or by any person claiming through the respondent, as a
consequence of the claimant not carrying out that work (or not
supplying those goods and services) during the period of suspension.
Division 4 General
28 Nominating authorities
(1) Subject to the regulations, the Minister:
(a) may, on application made by any person, authorise the
applicant to nominate adjudicators for the purposes of this Act,
and
(b) may withdraw any authority so given.
(2) A person:
(a) whose application for authority to nominate adjudicators for the
purposes of this Act is refused, or
(b) whose authority to nominate adjudicators is withdrawn,
may apply to the Administrative Decisions Tribunal for a review of the
Minister's decision to take that action.
29 Adjudicator's fees
(1) An adjudicator is entitled to be paid for adjudicating an adjudication
application:
(a) such amount, by way of fees and expenses, as is agreed
between the adjudicator and the parties to the adjudication, or
(b) if no such amount is agreed, such amount, by way of fees and
expenses, as is reasonable having regard to the work done and
expenses incurred by the adjudicator.
(2) The claimant and respondent are jointly and severally liable to pay the
adjudicator's fees and expenses.
Page 21
Clause 29 Building and Construction Industry Security of Payment Bill 1999
Part 3 Procedure for recovering progress payments
Division 4 General
(3) As between themselves, the claimant and respondent are each liable to
contribute to the adjudicator's fees and expenses in equal proportions
or, if the adjudicator determines that the adjudication application or the
adjudication response was wholly unfounded, in such proportions as
the adjudicator may determine.
(4) An adjudicator is not entitled to be paid any fees or expenses in
connection with the adjudication of an adjudication application if he
or she fails to make a decision on the application (otherwise than
because the application is withdrawn or the dispute between the
claimant and respondent is resolved) within the time allowed by
section 21 (3).
(5) Subsection (4) does not apply:
(a) in circumstances in which an adjudicator refuses to
communicate his or her decision on an adjudication application
until his or her fees and expenses are paid, or
(b) in such other circumstances as may be prescribed by the
regulations for the purposes of this section.
30 Exclusion of liability for adjudicator's acts and omissions
No action lies against an adjudicator or any other person with respect
to anything done or omitted to be done by the adjudicator in good faith
in the exercise of the adjudicator's functions under this Act.
31 Service of notices
(1) Any notice that by or under this Act is authorised or required to be
served on a person may be served on the person:
(a) by delivering it to the person personally, or
(b) by lodging it during normal office hours at the person's
ordinary place of business, or
(c) by sending it by post or facsimile addressed to the person's
ordinary place of business, or
(d) in such other manner as may be prescribed by the regulations
for the purposes of this section.
(2) Service of a notice that is sent to a person's ordinary place of business,
as referred to in subsection (1) (c), is taken to have been effected when
the notice is received at that place.
Page 22
Building and Construction Industry Security of Payment Bill 1999 Clause 31
Procedure for recovering progress payments Part 3
General Division 4
(3) The provisions of this section are in addition to, and do not limit or
exclude, the provisions of any other law with respect to the service of
notices.
32 Effect of Part on civil proceedings
(1) Subject to section 34, nothing in this Part affects any right that a party
to a construction contract:
(a) may have under the contract, or
(b) may have under Part 2 in respect of the contract, or
(c) may have apart from this Act in respect of anything done or
omitted to be done under the contract.
(2) Nothing done under or for the purposes of this Part affects any civil
proceedings arising under a construction contract, whether under this
Part or otherwise, except as provided by subsection (3).
(3) In any proceedings before a court or tribunal in relation to any matter
arising under a construction contract, the court or tribunal:
(a) must allow for any amount paid to a party to the contract under
or for the purposes of this Part in any order or award it makes
in those proceedings, and
(b) may make such orders as it considers appropriate for the
restitution of any amount so paid, and such other orders as it
considers appropriate, having regard to its decision in those
proceedings.
Page 23
Clause 33 Building and Construction Industry Security of Payment Bill 1999
Part 4 Miscellaneous
Part 4 Miscellaneous
33 Act binds Crown
This Act binds the Crown in right of New South Wales and, in so far
as the legislative power of Parliament permits, the Crown in all its
other capacities.
34 No contracting out
A provision of any agreement (whether in writing or not) under which
the operation of this Act is excluded, modified or restricted, or which
has the effect of excluding, modifying or restricting the operation of
this Act, is void.
35 Regulations
(1) The Governor may make regulations, not inconsistent with this Act, for
or with respect to any matter that by this Act is required or permitted
to be prescribed or that is necessary or convenient to be prescribed for
carrying out or giving effect to this Act.
(2) The regulations may, either unconditionally or subject to conditions,
exempt:
(a) any specified person or class of persons, or
(b) any specified matter or class of matters,
from the operation of this Act or of any specified provision of this Act.
(3) The commencement of a regulation referred to in section 5, 6 or 7 does
not affect the operation of this Act with respect to construction work
carried out, or related goods and services supplied, under a
construction contract entered into before that commencement.
36 Amendment of Commercial Arbitration Act 1984 No 160
The Commercial Arbitration Act 1984 is amended as set out in
Schedule 1.
37 Savings and transitional provisions
Schedule 2 has effect.
Page 24
Building and Construction Industry Security of Payment Bill 1999 Clause 38
Miscellaneous Part 4
38 Review of Act
(1) The Minister is to review this Act to determine whether the policy
objectives of the Act remain valid and whether the terms of the Act
remain appropriate for securing those objectives.
(2) The review is to be undertaken as soon as possible after the period of
3 years from the date of assent to this Act.
(3) A report on the outcome of the review is to be tabled in each House of
Parliament within 3 months after the end of the period of 3 years.
Page 25
Building and Construction Industry Security of Payment Bill 1999
Schedule 1 Amendment of Commercial Arbitration Act 1984
Schedule 1 Amendment of Commercial Arbitration Act
1984
(Section 36)
Section 3 Repeal, transitional and application provisions
Insert after section 3 (7):
(8) Nothing in this Act affects the operation of Part 3 of the
Building and Construction Industry Security of Payment Act
1999.
Page 26
Building and Construction Industry Security of Payment Bill 1999
Savings and transitional provisions Schedule 2
Schedule 2 Savings and transitional provisions
(Section 37)
Part 1 Preliminary
1 Savings and transitional regulations
(1) The regulations may contain provisions of a savings or transitional
nature consequent on the enactment of the following Acts:
Building and Construction Industry Security of Payment Act 1999
(2) Such a provision may, if the regulations so provide, take effect from
the date of assent to the Act concerned or a later day.
(3) To the extent to which such a provision takes effect from a date that
is earlier than the date of its publication in the Gazette, the provision
does not operate so as:
(a) to affect, in a manner prejudicial to any person (other than the
State or an authority of the State), the rights of that person
existing before the date of that publication, or
(b) to impose liabilities on any person (other than the State or an
authority of the State) in respect of anything done or omitted to
be done before the date of that publication.
Part 2 Provisions consequent on enactment of Building
and Construction Industry Security of Payment Act
1999
2 Certain construction contracts not affected
A provision of this Act does not apply to a construction contract
entered into before the commencement of that provision.
Page 27
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