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27 September 2018

Construction Law Update

In our last construction law update we informed you that the changes to the Building and Construction Industry Payments Act 2004 (BCIPA) being introduced by BIF (the Building Industry Fairness Act 2017), were to be delayed until December 2018.  A summary of the changes to be introduced was detailed here.

It remains to be seen whether the legislation will commence operation in December in its current form or if it will be ‘tweaked’ once again.  One prospect is that the recommendations of the “Murray Review” will be implemented in new legislation.

Murray Review

Mr John Murray, a lawyer and adjudicator, was tasked by the Commonwealth Government to review the disparate security of payment laws in all states and territories.

The headline recommendation from the Murray review is for an Australia-wide harmonised model for security of payment to be adopted, based on the “East Coast Model”.

Specific recommendations for the harmonised security of payment scheme include:

  1. extending the regime to the residential housing sector to enable a builder to make a progress payment claim against an owner-occupier;
  2. abandoning ‘reference dates’, and simply allowing one claim for every named month, or more frequently if the contract provides;
  3. enabling a builder to make a claim where a contract is terminated, for work carried out up to the date of termination;
  4. requiring a claimant to identify that the claim is made under the Act (an existing requirement in Queensland which will not be required if the BIF reforms take effect in December 2018);
  5. requiring a claimant to include a supporting statement with any payment claim stating that all subcontractors have been paid (and a false or misleading supporting statement constitutes an offence);
  6. giving a payment schedule within 10 business days or as the contract provides (the same as the existing legislation);
  7. a claimant serving a notice of intention to adjudicate if the respondent does not give a payment schedule (the same as the existing legislation, but this second chance step is to be removed if the BIF reforms take effect in December 2018); and
  8. a review mechanism for adjudications where the adjudicated amount is $100,000 or more higher than the scheduled amount, or $100,000 or more lower than the claimed amount.

Consistent laws throughout Australia would certainly be a welcome change and provide clarity to the area.  It is a significant difficulty for lawyers and clients that decisions made by adjudicators and Courts cannot necessarily be applied outside the state in which they are made, and that there are very few decided cases on particular issues.

Watch this space for further updates on the proposed changes to Queensland’s BCIPA regime; either some or all of the Murray Review recommendations, or the changes intended by the BIF legislation.

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