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Changes to Qld security of payment regime to commence in December

The Queensland Government has announced the next stage of reforms to the Building Industry Fairness (Security of Payment) Act (Qld) 2017 (BIF Act) will commence on 17 December this year.

What are the changes? 

These ‘Chapter 3’ changes will significantly change the previous regime under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA).  The amendments include:

  • Chapter 3 provides for the implementation of reference dates, meaning parties are required to issue payment claims on certain days of the month (as required by their construction contract) or the last day of the month if not stated in the contract.
  • Payment claims no longer need to be endorsed to activate the protections in the BIF Act.
  • It will be an offence (with a maximum penalty of $11,000) for a respondent not to issue a payment schedule within 15 business days of receiving a payment claim.
  • Where a respondent fails to pay the amount owed to the claimant in full on or before the due date for the progress payment, the claimant may either recover the unpaid amount as a debt owing to the claimant in court, or apply for adjudication of the payment claim.
  • In order to enforce an unpaid payment claim in court claimants must, within 20 business days of the due date for payment, give the respondent a warning notice of the claimant’s intention to commence proceedings.
  • Claimants now have 30 business days to lodge an adjudication application and are no longer required to give a second chance notice for the respondent to provide a payment schedule.
  • The adjudication process for complex claims has been changed such that reasons not stated in the payment schedule can no longer be introduced by the respondent during the adjudication process.

Project Bank Accounts

As alluded to in our previous article on the BIF Act, the first phase of Project Bank Accounts (PBA) came into force on 1 March 2018, which required all projects tendered by the Qld Government (valued between $1 million and $10 million) to use PBAs.

The second phase of PBA implementation will require all projects valued over $1 million, both public and private, to use PBAs. This reform remains pending at this stage.

Building Industry Fairness Reforms Implementation and Evaluation Panel (Panel)

The Panel is set to play a pivotal role in monitoring the effectiveness of the new reforms.

The Panel has released its Terms of Reference, by which the effectiveness of the reforms will be measured, briefly these are:

  • determining the effectiveness of the Governments implementation of the suite of building industry reforms;
  • determining the effectiveness of the legislative framework in achieving policy intent;
  • determining opportunities to realise improved security of payment outcomes for the industry prior to the commencement of PBAs in the private sector; and
  • determining the indicative economic impacts and outcomes of the building industry reforms.

The Panel is due to release its first report on the above terms of reference in May 2019.

For more information on the current state of Security of Payment legislation in Australia, head to our website.

If you require assistance or more information on your rights and obligations under the Building Industry Fairness (Security of Payment) Act or any other security of payment legislation, please contact Morrissey Law + Advisory.

 

Disclaimer: This publication by Morrissey Law & Advisory is for general information and commentary only and should not be considered or relied upon as legal advice. Formal legal advice should be sought in relation to any matters or transactions that may arise in relation with communication.