Security of Payment Act 1999 NSW

The payment of an account is very important to the construction industry, unfortunately all too often people who need to pay, make up reasons not to or try to delay payment. The New South Wales Security of Payment Act ensures payment is made. It ensures that the party that provided work, goods and services under a construction contract, can enforce a fast payment from the company who purchased the goods or services. It also includes the payment of any progress payments in relation to the carrying out of that work, and the supplying of those goods and services, as well as final payments and retention monies.

This Act does not apply to construction contracts between residential home owners and a contractor. This situation would be dealt with under the New South Wales Home Building Act.

Those who can make a claim under the Act include:

• Contractors against principals/developers;

• Sub-contractors against contractors;

• Suppliers against customers;

• Plant and equipment hirers against clients; and

• Consultants against clients.

Construction work and services can be claimed under the Act, even if the contract:

• Is not written;

• Does not provide for progress payments; and

• Has only a single payment to be made when the work is completed.

You can make a claim for:

• Construction work you have done;

• Construction materials or plant you have provided;

• Consulting services you have provided;

• Interest on overdue progress payments;

• Your losses and additional expenses due to work being deleted from your contract while you suspended work under the protection of the Act;

• Cash security and retention monies; and

• At the end of a contract, a claim can be made for the final payment.

In order to get the money owed to you the adjudication process must be started. It is a process whereby the claimant presents the reasons why they should be paid the amount claimed. The respondent is allowed a response but they are not allowed to bring up any reasons for not paying the claimed amount. The adjudicator then considers the Act, the contract, they payment claim, the payment schedule and all submissions. The adjudicator then makes their decision and if they decide that the respondent has to pay the claimant, the amount must be paid within 5 days of the adjudicator's decision. If the payment is not made, the claimant can stop all work without any consequence.

The Act can be used to get your payments quickly and inexpensively, which cuts down the extensive need for lawyers and litigation. The Act may help you get a judgement for a progress payment within a matter of weeks. The Act can be used to get the payment judgement on account before or during arbitration or court proceedings. If this Act is used actively it will reduce the number of disputes going to arbitration or court.

The aim 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 private and public sectors in NSW is entitled to quick payment of all progress payments that are due. Including final payments and retention monies.

Our expert team can provide you with more information and assistance in a building and construction related matter. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.