Building and Construction Law

  1. Do you work or know someone that works in the building and construction industry?
  2. As a builder or construction industry worker, do you have problems with receiving payment from customers for the work you do?

If you have answered Yes to the above questions, then you need to carefully consider a legislation called the Building and Construction Industry Security of Payment Act 1999 ("the Act"), which enables you to receive prompt payment of the tax invoices you issue to your customers without resorting to expensive and time-consuming Court litigation.

Too often customers liable to pay for construction work or related goods or services, manufacture a dispute to deny, or try to delay, payment. In other situations, customers try to string out the time for payment with promises of future work if only you just waited a bit longer.

The Act ensures that the party who has provided work, goods or services can force the customer to make payment on account.

You can use the Act to secure payment on account inexpensively and speedily without the need for extensive use of court hearings, witnesses, cross-examinations and all that is usually involved in arbitration or litigation. Within a matter of weeks, you can now have a judgment for a progress payment on account, which compels the customer to pay.

The objective of the Act is to ensure that any party that contracts to carry out construction work, or supply related goods or services, on projects for the private and public sectors in NSW is entitled to promptly receive all progress payments that are due, including final payments and retention monies.

The Act gives you a statutory right to make progress payment claims and receive payment, even where the contract has no provision for progress payments. If the customer claims to have reasons for not paying a claim, the customer must set out the reasons in a payment schedule.

If, after 10 business days of being served with a payment claim, the customer hasn't provided you with a payment schedule, the customer becomes liable to pay the full amount claimed. You are also entitled under the Act to recover in any Court of competent jurisdiction, the unpaid portion of the amount claimed. The unpaid portion is a statutory debt, which you are entitled to recover independently of and irrespective of the terms of the construction contract.

If the customer disputes the claim, when an adjudicator has determined the amount due, the Act provides an expedited means of obtaining a Court judgment for payment of the amount due. Judgment is granted automatically by the Court, that is, without the need for a summons or a hearing.

To take advantage of the Act, you will have to ensure that your payment claims include certain words in your tax invoice. At Lex Fori Lawyers we can advise you what those words are and provide you with further advice on your rights and obligations.