What is Security of Payments and who is it for?
If you are a contractor employed to perform work or provide goods and services under a construction contract, you have a right to receive payments for the work that you have performed which are called ‘progress payments’ for work that has been successfully completed. A right to a progress payment under section 8 of the Act is a payment to which you are entitled to be paid after you make a payment claim.
How progress payments are legislated
If you have not been paid for work that you have successfully completed throughout the construction contract, the Building and Construction Industry Security of Payment Act 1999 (SOPA or Act) outlines the standards and procedure for receiving your payments. In particular, there are two ways outlined in the Act under which you can claim your ‘progress payment’. They include:
1. Make a claim for the payment; or
2. Apply for adjudication.
Changes to the SOPA
There have been some significant changes to the SOPA that are now in force since the enactment of the Building and Construction Industry Security of Payment Amendment Act 2018 (NSW) (Amending Act) with the intention to provide legislation that is consistent and enforces prompt payments to contractors.
1. Reference dates: greater clarity when it comes to the date in which payment claims can be made;
2. Adjudication of claims: the Amending Act has legislated under s32A that an
Adjudicator’s determination, if found to have a jurisdictional error by the Court,
enables the Court to either set aside the whole or part of the Adjudicators
determination;
3. Insolvent Companies: Under s32B of the Amending Act, Companies who are under
liquidation cannot make a payment claim anymore.
If you think that any of the above applies to you as a contractor or principal and you wish to discuss it, please feel free to contact the Jenkins Legal team on (02) 4929 2000 or send us an email: office@jenkinslegal.com.au.