Critical changes to the Queensland Security of Payment legislation from 1.10.20

Amendments to the Building Industry Fairness (Security of Payment) Act 2017 (“BIF Act”) came into effect on 1 October 2020.

The amendments relate to the making of a payment claim, consequences for not paying the certified amount by the due date, and the introduction of the concept of payment withholding requests if an amount has not been paid pursuant to an adjudication decision.

These amendments affect all contractors in the contractual chain in the building and construction industry and are designed to improve the flow of cash throughout the industry.

Contractors should ensure that they are aware of the new amendments.

The amendments include a significant change to the documentation required when submitting a payment claim – the commencement of the security of payment process.  A contractor who has one or more subcontractors below it, when lodging a payment claim, must include with the payment claim a declaration that all subcontractors have been paid all amounts they are owed.  If a subcontractor has not been paid, the supporting statement will need to specify the amounts that remain unpaid.

The second significant amendment concerns the making of payments pursuant to a payment schedule.  A party who fails to make payment pursuant to an amount certified for payment pursuant to a payment schedule, is now exposed to being fined an amount equivalent to 100 penalty units.

The third significant change relates to paying adjudicated amounts.  A respondent is now required to pay the adjudicated amount within 5 business days after receiving the adjudicator’s decision.  If a respondent fails to do so, it is now liable to a fine of 200 penalty units.

In order to assist claimants to obtain payment pursuant to an adjudicated decision, the new amendments entitle a contractor to serve a “payment withholding request” on a party above it in the contractual chain to secure payment of the adjudicated amount.  Once the principal is served with the notice, it is obliged to retain the amount.

Justin Mathews – who is a partner of our firm specialising in building and construction – is now a registered Adjudicator under the Security of Payment legislation both in Queensland and the Northern Territory.  He can assist you in all aspects of adjudication pursuant to the Security of Payment legislation.

Please do not hesitate to contact Justin, a Queensland Law Society Accredited Specialist in Commercial Litigation, on (07) 5574 0111 or email justinm@qbmlaw.com.au.