Victorian Consolidated Legislation

Building and Construction Industry Security of Payment Act 2002 - SECT 38

Right of recovery if principal fails to pay

38. Right of recovery if principal fails to pay



(1) An assignment effected by operation of this Division is valid at law.

(2) Accordingly, if the principal fails to make any payment required to be
made by this Division, the claimant may sue for and recover the debt assigned
to the claimant, in the claimant's own name.

(3) Proceedings for recovery of the debt may be taken in any manner in which
the respondent might have taken them if there had been no assignment.

(4) A claimant's right of recovery under this section is subject to any
defence that the principal would have had against recovery of the debt by the
respondent had there been no assignment, other than a defence based on
something done by the principal after the notice of claim was served by the
claimant.

Example If the principal continues to make contract payments to the
respondent, rather than the claimant, after having been served with a notice
of claim, the claimant is still entitled to recover the money from the
principal.