The Security of Payments (NSW) commentary has been updated and enhanced. Some of the noteworthy and helpful additions include:
- Overview: This area of law is still developing, with considerable impact on the way industry participants run their businesses. Many of the reported decisions from NSW courts are directly relevant to Queensland, Victoria, Western Australia and the Northern Territory. South Australia is now set to join the other states in introducing a legislative regime, with the South Australian parliament currently considering security of payment legislation.
- Residential building work: It is important to note that, subject to some important exceptions, the Act does not apply to a construction contract for residential building work involving an owner builder: see the definition of “dwelling” in clause 3 of Schedule 1 of the Home Building Act 1999.
- Preparing a payment claim: Principals must pay amounts due under a construction contract on or before the 15th business day after the payment claim is made. Principals, head contractors and subcontractors, as respondents, must now remain vigilant for any payment claim falling within the terms of the Act – the warning words no longer need be added to the claim and, as such, claims will more readily qualify as payment claims, bringing potentially serious consequences.
- Service of payment claim: Claimants should keep a record of the time, date and manner of service on the respondent. The time for the respondent to provide the payment schedule runs from the date of receipt of the payment claim. Claimants should keep a record of the time, date and manner of service on the respondent. The time for the respondent to provide the payment schedule runs from the date of receipt of the payment claim. The claimant must be able to evidence the date of service of the payment claim.
- Adjudication: The Supreme Court in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd  NSWSC 770 potentially expanded the grounds available to challenge adjudication determinations to include non-jurisdictional errors of law on the face of the record. However the High Court in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd  HCA 4 (14 February 2018) has now held that the Security of Payments Act ousted the jurisdiction of the Supreme Court to make an order in the nature of certiorari quashing an adjudicator’s determination for non-jurisdictional error of law on the face of the record. Although the Security of Payment Act did not contain an express statement providing that the jurisdiction was ousted, the scheme of the Act disclosed an intention that such review would not be available having regard to the fact that the Act creates an interim entitlement that is determined informally, summarily and quickly, and then summarily enforced without prejudice to parties’ common law rights.
Get on tip of this critical and developing area of law, relevant to clients who conduct businesses in various industries.
By Lawyers Security of Payments guide is a separate publication on our website, or for LEAP users is located in Other Areas of Law – Building and construction disputes.