Security of payment national overview 2009

Friday, 12 February 2010

An overview of security of payment legislation in Australia, prepared by Minter Ellison

Introduction
Security of payment legislation is firmly entrenched in New South Wales, Victoria, Queensland, Western Australia and the Northern Territory.

In 2009, Tasmania, the AcT and South Australian each introduced security of payment bills, and each passed legislation late in the year. A brief overview of this legislation is provided on page 5. Unfortunately the legislation is not uniform, which presents challenges for national operators in the construction industry. In order to assist our clients, we have prepared a schedule that
identifies the key differences between some of the jurisdictions at page 12.

Our understanding of the legislation, including particular state quirks, has been enhanced by  an almost weekly flow of judgments from the courts in New South Wales and Queensland, plus some landmark decisions from Victoria. We have prepared a state-by-state overview of the themes that have emerged during 2009, with detailed case notes included at pages 22 to 49.

Despite the differences between the states, security of payment legislation appears to be having the desired effect of stamping out ‘the un-Australian practice of not paying contractors for work they conduct on construction.

The cases included in this roundup are the tip of the security of payment iceberg. The vast majority of payment claims and adjudication applications do not proceed to court, regardless of the shortcomings of the process, as participants in the
construction industry achieve speedy commercial resolution of disputes, facilitated by the speed of the process mandated by the security of payment legislation. While the courts continue to be conscious of the underlying objectives of the legislation, in
2009 the brakes have been put on claimants who attempt to exploit the legislation by making repeated claims for the same work.
Ian Briggs
Division Head - construction, Engineering and Infrastructure
Minter Ellison

Read the full report, attached

Security of payment - 2009 Annual Roundup