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Changes to Security of Payments Laws Commence

February 25, 2020

Firstly, the clarification of the definition of ‘working day’ is a welcome change. In a win for HIA the definition of ‘working days’ now excludes Saturday, Sunday, public holidays and a day beginning on 25th December to a day ending on 7th January in the following year.

This prevents the Christmas period being seen as an opportunity to serve payment claims or have claims for payment adjudicated under the Construction Contracts (Security of Payment) Act 2004 (Act) in the hope that these claims or applications will go unanswered or the other party will be ill-prepared to defend them.

Members should also be aware of a number of changes to significant timeframes under the Act, for example, instead of 90 working days, those wishing to apply for an adjudication of a payment dispute must do so within 65 working days after the dispute arises.
Conversely, respondents to an adjudication application now have 15 working days to respond instead of 10 working days.
Amendments to the Act also prohibit payment periods beyond 50 days. Such time periods will be deemed void and instead payment will be required within 30 days.

Finally, other changes include:

• The ability to make a payment claim under the Act despite the contract being terminated.
• The ability to have liquidated damages assessed as part of a payment claim.
• A revision of the process for appointing adjudicators including a new requirement that an adjudicator can be registered for 5 years at which time they will need to re-apply for registration.
• The ability to ‘opt-out’ of adjudication under the Act for high value construction contracts over $505 million.
• The publication of adjudicators decisions.

These changes will not affect any disputes currently on foot under the Act and will only apply to payment claims made from 3 February 2020.
Any members with concerns about the new changes to security of payments laws can contact HIA’s Workplace Services on (08) 8995 6303.