South Australian security of payment legislation

Articles Written by Jessica Teoh (Associate)

The Building and Construction Industry Security of Payment Act 2009 (SA) (the Act) and Regulations will commence operation in South Australiaon 10 December 2011.

The key features of the Act were outlined in the August 2010 edition of Acumen.

The Act will apply to all construction work carried out in South Australia and related goods and services supplied under construction contracts entered into from 10 December 2011. Principals, consultants and contractors should be aware of the statutory mechanisms available under the Act to enforce payment claims, including progress payment claims.

Contract administrators, contract managers and project officers should be aware that progress claims with an endorsement stating that they are made under the Act must be responded to by providing a payment schedule within either the time required under the Contract or within 15 business days after the payment claim is served (whichever is the earlier). If no time for responding to a payment claim is specified in the Contract, then the response must be issued within 15 business days after the payment claim is served.

Where the scheduled amount is less than the claimed amount, the payment schedule must indicate why the scheduled amount is less and (if it is less because payment is withheld for any reason) the reasons for withholding payment. Failure to issue a payment schedule within the time required under the Act or the construction contract (whichever is earlier) may result in an adjudicator determining that the progress claim be paid in full to the claimant.

For the purposes of the Act, Regulations have been prescribed, which:

  • exclude bodies regulated by the Australian Prudential Regulation Authority from the application of the Act;
  • list as related goods and services:
    1. project management services related to construction work;
    2. contract management services related to construction work; and
    3. consultancy services related to construction work; and
  • list the qualifications necessary for a person to be eligible to be an adjudicator.
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