Contractors Working in New South Wales beware of significant changes to the Building & Construction Industry Security of Payment Act 1999 (“SOPA”)
Significant amendments have been made to SOPA which came into effect on 21 October 2019.
Under the new sections 13(1A) to 13(1C) of the SOPA “reference dates” have been abolished and the process for making a payment claim simplified.
SOPA now provides that a payment claim may be made on and from the last day of the month in which work is done.
If the construction contract provides an earlier date upon which a payment claim can be made, then the payment claim can be issued on that date.
The contractor can also issue a payment claim to recover monies owing for work done up to the time of termination of a construction contract.
The SOPA requires that in order to be valid, a payment claim must expressly state that it is a payment claim made under SOPA.
The amendments to SOPA also make it plain what amounts can be included in a payment claim.
Sections 13(5) and 13(6) of the SOPA now provide that a payment claim can include:
- a claim for more than a month’s work;
- an amount that has been the subject of a previous payment claim;
- an amount for work done in the previous month.
There has been uncertainty as to the effect that liquidation of a construction company has upon its ability to enforce a payment claim and adjudication. Section 328 of SOPA provides that a company that goes into liquidation cannot enforce a payment claim under SOPA and cannot pursue an adjudication.
If you require assistance you can contact Justin Mathews, Partner of our office on (07) 5574 0111 or email justinm@qbmlaw.com.au. Justin is an accredited specialist in commercial litigation and specialises in Building and Construction Litigation.
