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Security of Payment Laws in SA

April 30, 2019

What is required for making payment claims under the Building and Construction Industry Security of Payment Act 2009 (the “Act”)?

In our last Building News magazine, we wrote about Security of Payment laws as it applies generally in South Australia.

In this article we will focus on what is required in making a payment claim under the Act.

What can be claimed in a payment claim under the Act?

A person is entitled to make a claim under the Act if they carry out construction work or supply related goods and services under a construction contract. Examples may include construction materials or plant that you have provided, services such as project management, contract management or consultancy work.

A claim can also be made under a construction contract for progress payments or milestone payments.

What is a payment claim? 

 To be a valid payment claim under the Act, the claim must be-:   

  • be made at the time stated in your contract or, if there is no time stated, on or after the last day of the month;
  • be in writing and addressed to the respondent (the person/entity in which the claim is against);
  • describe the construction work, related goods or related services for which you are claiming;
  • state the amount of your claim;
  • include the words "This is a payment claim made under the Building and Construction Industry Security of Payment Act 2009”; and
  • refer to work done in the past 6 months only or the date determined by or in accordance with the terms of the construction contract.

The claim may also include attachments containing-:

  • statements detailing the extent and quality of the work completed;
  • completion certificates;
  • delivery dockets;
  • photographs; and/or
  • other applicable contract document requirements.

The claim and attachments should provide sufficient information for the respondent to understand the nature and extent of what is being claimed. A failure to provide relevant documents in the first instance may result in the applicant being unable to rely on that information if the claim is later referred to adjudication.

How do I make a claim?

To make a claim you must-:

  1. Establish the reference date for making your claim. The reference date is either the date stated in the contract for making claims or, if there is no date, it is the last day of each month.
  2. Calculate the amount you are entitled to be paid in respect of the reference date.
  3. Make a written payment claim on or after each reference date and serve it on the party liable to make payment (the respondent).
  4. Serve the claim by delivering, posting or faxing it to the respondent. The contract may provide for other methods of service, and
  5. Record the date of service (the date that the respondent receives the claim).

Does the Act apply to domestic building work?

The Act does not apply to domestic building work contracts with homeowners who live in, or intend to live in the premises where the work is being carried out. What this means is that a builder or subcontractor cannot make a payment claim under the Act against a homeowner who lives in or intends to live in the property. However, you may be able to make a claim against the owner of the property where the owner does not live there or intends to use it as a rental.

Can employees claim unpaid wages under the Act?
No. Section 7 of the Act excludes employees. If you are working as an Employee doing any kind of construction work, you can't claim payments under the Act.

For further information, please contact Huan Do, HIA Workplace Adviser on (08) 8340 5900.