page loader

Construction Contracts

Contracts in the building & construction industry come in many and varied forms.

A construction contract can be a very simple oral agreement.

It could also be part written, and part oral. For example; you might email a quote to someone and they might pick up the phone and say go ahead.

Probably a safe minimum is a written quote and a written acceptance, be it sms text message or email or fax or hand delivered documents on letterheads / purchase orders, it’s good to have a written record of the agreement.

Organisations such as Master Builders Association (MBA) and Housing Industry Association (HIA) have basic contracts available for purchase at reasonable prices. These are a good basic agreement to use if there is nothing else available.

Larger projects will use quite substantial instruments of agreements such as AS4000, AS4902, AS2124 etc…

Government projects will use contracts such as the GC21.

Regardless of the form of the agreement made between two parties the law says that the agreed terms are binding. However it isn’t unusual for parties to recall the detail of the agreement differently resulting in a dispute. Hence the reason why a written record of the agreement is invaluable.

It is important to understand the key components of an agreement.

Who the parties to the contract are, correct and complete entity names inclusive of ABN’s and ACN’s if relevant. If an individual full name and identifier such as drivers licence is helpful.

Execution.

What the contract works / services are. Scope of works.

Type of contract, ie; fixed lump sum, schedule of rates, cost plus, etc…

Price, schedule of rates.

Commencement date and completion date.

Time for making claims.

Time for payment.

How to claim an extension of time in respect of the completion date when your work is delayed by others.

Liquidated damages.

How to claim a variation to the contract.

How to terminate the contract.

Completing the contract.

Retentions.

Adjudication Challenge – Broadview Windows Pty Ltd v Architectural Project Specialists Pty Ltd [2015] NSWSC 955

Security Of Payments Act Adjudication Decisions Are Challenged in the Supreme Court

Broadview Windows Pty Ltd v Architectural Project Specialists Pty Ltd [2015] NSWSC 955

Hearing dates:9 July 2015Decision date:09 July 2015Jurisdiction:Common LawBefore:McDougall JDecision:

Summons dismissed with costs.

Catchwords:BUILDING AND CONSTRUCTION – whether payment claim is valid – where claimant served two payment claims in relation to the same work, but with different reference dates – whether successive payments claims, claiming the same amount, can be validly served under the Act – application of ss 8(2)(b), 13(4) and 13(5) of the Building and Construction Industry Security of Payment Act 1999 (NSW)Legislation Cited:Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Amendment Act 2013 (NSW)
Evidence Act 1995 (NSW)
Interpretation Act 1987 (NSW)Cases Cited:Allpro Building Services v C & V Engineering Services [2009] NSWSC 1247
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Chase Oyster Bar v Hamo Industries Pty Ltd (2010) 78 NSWLR 393
Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190
Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2006) 23 BCLR 292
Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd [2012] NSWSC 1571
Olympia Group Pty Ltd v Tyrenian Group Pty Ltd [2010] NSWSC 319
The Trustees of the Roman Catholic Church for the Diocese of Lismore v F T Woollam & Son [2012] NSWSC 1559
Veer Build Pty Ltd v TCA Electrical and Communication Pty Ltd [2015] NSWSC 864
Rubana Holdings Pty Ltd v 3D Commercial Interiors Pty Ltd [2008] NSWSC 1405Category:Principal judgmentParties:Broadview Windows Pty Ltd as Trustee for the Aras Trust (Plaintiff)
Architectural Project Specialists Pty Ltd (First Defendant)
Adjudicate Today Pty Ltd (Second Defendant)
John Goggins (Third Defendant)Representation:Counsel:
P Rodionoff (Plaintiff)
R Green (First Defendant) (Solicitor)

Solicitors:
Nil (Plaintiff)
Richard Green Construction Lawyers (First Defendant)
File Number(s):2015/115032

This hearing and subsequent judgment confirmed that claimants have 12 available reference dates upon which to serve payment claims in New South Wales under the Building & Construction Industry Security Of Payment Act 1999 Legislation.

Read the full judgment here.

1300 RECOUP Debt Recovery Contact Us

Stand Up For NSW Building & Construction Subbies Please Premier Mike Baird

Mike Baird Building & Construction Subcontractors

Read RECOUP’s Open Letter to Premier Mike Baird here

Send Premier Mike Baird a message here

Open Letter to Premier Mike Baird

6 March 2015

For and on Behalf of NSW Building & Construction Subcontractors

Letter to Mike Baird 060315 page 2_Page_1
Mike Baird Building & Construction Subbies

Mike Baird – Please Help Building & Construction Subbies

Baird-Stoner.-Darling-Harbour

Building & Construction Subcontractor Payments

Subbies and their families need to know that the cash-flow required to support their family’s livelihoods is supported by the Security Of Payment Act regime.

Barry O’Farrell, notoriously, told subbies where to go during the Geoff Reed Constructions fiasco, but even worse; he changed the Security Of Payments Act legislation for the worse before being exposed as a corrupt official.

Building & Construction subbies need Mike Baird to stand with them and their families, change the legislation back and strengthen subbies rights even further.

If you want to send Mike Baird a message use the form to the right and RECOUP will present all requests directly to the Premier before the upcoming State Election.

Read RECOUP’s Open Letter To The Premier here

  • This field is for validation purposes and should be left unchanged.

BIF Act QLD Amendments Came Into Force 17 December 2018

The Queensland Security Of Payment Act legislation is known as the Building Industry Fairness (Security Of Payment) Act 2017 (BIF Act)

Changes to the Security of Payments Act In Queensland and How it Affects You

Changes to the Building Industry Fairness (Security Of Payment) Act 2017 commenced on 17 December 2018.

The amendments seek to make changes in the way claimants file their adjudications and for respondents to have more time in filing their response.

What the amendments mean to you as a claimant: Adjudication applications will no longer be lodged to ANA: the Authorised Nominating Authorities (ANA) will be abolished. The Queensland Building and Construction Commission (QBCC) will be established as the adjudication registry.

QBCC will be responsible for: referring claimants to adjudicators and making appointments based on skills, knowledge, and experience appropriate to the case at hand; and monitoring the performance of adjudicators to ensure qualification

Shorter claim time: payment claims can no longer be made 6 months after construction work has been finished

Three week’s response time: claimants will have three weeks to respond to any matter raised by the respondent

What amendments mean to respondents: Longer timeframes for “complex” claims: respondents are now given 15 business days to respond to claims exceeding $750,000 or claims that have high time-related costs; standard claims are given the same response time of 10 business days

Business days close to Holidays not included: the definition of “business day” will no longer include the three business days leading up to Christmas and the 10 business days after New Year’s Day

More opportunity to raise reasons for withholding payment: under current law, respondents are not allowed to raise reasons for not not providing payment if such reasons are not included in the payment schedule. But with the amendment, respondents are now allowed to raise additional information and reasons even if those are not cited in the payment schedule. These new changes are set to take effect on 17 December 2018. The aim of such change is to strike a better balance between respondents and claimants. Previously, the BCIPA has been criticized for favoring claimants. Moreover, ANA adjudicators have been criticized for favoring claimants and causing losses to respondents. While the pending amendments may favor construction firms and head contractors, claimants may face new challenges. If you are a sub-contractor, supplier, or consultant, you may encounter some difficulties when the laws take effect in September. The pending amendments are set to affect all players in the construction industry. If you want to recover the debt owed to you, best consult our experts at Recoup.

For more information about the Queensland Security Of Payment Act known as the Building Industry Fairness (Security Of Payment) Act 2017 (BIF Act), please click BCIPA Information.

Security Of Payments Act Help - Contact Recoup Contractor Debt Recovery

Good News For Building & Construction Subcontractors

Solution Announced For Getting Retention Money Back

Security Of Payments Act Minister Matthew Mason-Cox

Minister for Fair Trading Matthew Mason-Cox, NSW Minister for Fair Trading has announced that A new trust-fund scheme will be created to ensure construction companies that collapse are prevented from keeping money that is owed to subcontractors after they complete a job.

The initiative is in response to an inquiry the state government commissioned in response to Glenn Bower Of RECOUP Contractor Debt Recovery push for fairness and justice for subcontractors  in 2012 to look at the causes of insolvency in the $40-billion building industry. Bruce Collins QC chaired the inquiry.

Today, Matthew Mason-Cox, will announce the new retention trust scheme – the first of its kind in Australia – which will require construction companies to hold retention money in a trust fund to protect payments for subcontractors. Head contractors who fail to comply with new requirements will face fines of up to $22,000.

Up to 5 per cent of the cost of a contract is generally retained by the contractor until the subcontractor has completed a job and corrected any defects. The new trust scheme will ensure that contractors who become insolvent cannot use the money for their own purposes.

“This will end the widespread industry practice of using subcontractors’ trust money for the head contractor’s working capital purposes. At the end of the day, this money belongs to subcontractors and it’s about time it was protected as such.”

Read more: http://www.smh.com.au/business/banking-and-finance/new-trust-fund-scheme-promises-to-protect-subcontractors-against-phoenix-companies-20141207-1217fq.html#ixzz3LG4WF6UI

Big End Of Town Supportive : St Hilliers Building & Construction Boss Tim Casey:

St Hilliers managing director Tim Casey says that while scheme will protect smaller subcontractors it could lift building costs.

St Hilliers managing director Tim Casey, said the government had been talking about the scheme for 12 months.

Mr Casey, who managed to trade out of the collapse, said the new scheme could hike building costs. “(But) it’s probably not a bad thing for the industry, it protects the smaller subcontractors who don’t have the facilities to put up bank guarantees.”

Tim Casey is one of the more ethical players in the building & construction industry, however there is bound to be some resistance from the ones with little or no conscience.

Tim Casey

The definition of “Adjudication” is: to settle judicially.

Adjudication of a building and construction dispute can occur when an Adjudicator is empowered by the relevant state legislation to determine the outcome of such an application only if he has jurisdiction under that legislation.

Continue reading “Adjudication Definition”

Security Of Payment Act NSW Supporting Statement

Building & Construction Industry Security Of Payment Act 1999 legislation changes that came into force for all building and construction contracts entered into on or after 21 April 2014 now require a head contractor to include a Supporting Statement with all Payment Claims served under the Security Of Payments Act NSW.

It is important to note that the 21 April 2014 changes to the Security Of Payments Act NSW also include penalties for non compliance.

Section 13 of the Building & Construction Industry Security Of Payment Act 1999 legislation now contains the following obligations for head contractors:

A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that indicates that it relates to that payment claim.

Maximum penalty: 200 penalty units.

(8) A head contractor must not serve a payment claim on the principal accompanied by a supporting statement knowing that the statement is false or misleading in a material particular in the particular circumstances.

Maximum penalty: 200 penalty units or 3 months imprisonment, or both.

(9) In this section:

“supporting statement” means a statement that is in the form prescribed by the regulations and (without limitation) that includes a declaration to the effect that all subcontractors, if any, have been paid all amounts that have become due and payable in relation to the construction work concerned.

How you fill out this form is critical!

You can find a sample of the Supporting Statement By Head Contractor Form here

You must serve a copy of the Supporting Statement By Head Contractor Form with your Payment Claim.

You should obtain expert advice on what information you should include and what information you should not include in the Supporting Statement By Head Contractor Form.

The purpose of the obligation on the Head Contractor under the Building & Construction Industry Security Of Payment Act 1999 legislation is to ensure that subcontractors get paid.

The catalyst for the changes to the Building & Construction Industry Security Of Payment Act 1999 legislation was the Reed Constructions Australia fiasco where the NSW Government departments, Roads & Maritime Services and Department Of Education paid Reed for works carried out by Reed’s subcontractors but but Reed didn’t pass on that payment to their subcontractors.

Now any head contractor that does not include a Supporting Statement with their Payment Claim, and remember the 21 April 2014 changes mean that all invoices for construction work and or related goods and services are now payment claims under the Building & Construction Industry Security Of Payment Act 1999 whether they are endorsed as such or not, or knowingly makes a false declaration may be subject to penalties as prescribed in the legislation, penalties that may include imprisonment.

Therefore, because potential exists for such harsh penalties, it is highly recommended that head contractors should seek expert advice before completing the Supporting Statement.

Call RECOUP Contractor Debt Recovery for expert assistance to prepare your Payment Claim and to ensure your Supporting Statement is filled out appropriately.

The Building & Construction Industry Security Of Payment Act 1999 legislation continues to provide the best means of debt recovery for contractors in any position in the contracting chain to resolve all types of payment disputes.

The Building & Construction Industry Security Of Payment Act 1999 legislation ensures contractors are able to obtain their full entitlement under their construction contract, which can be a very simple oral agreement, in a timely and inexpensive manner. Claiming under the Building & Construction Industry Security Of Payment Act 1999 begins with serving a payment claim and ends with applying for adjudication, it can be a very quick and easy 2 step process. If a respondent does not serve a payment schedule in time in response to the payment claim a second notice may be required and even if necessary this addition step may only add an addition week to the process. The process usually takes about six weeks from beginning to end.

Adjudication under the Building & Construction Industry Security Of Payment Act 1999 is a process based on a written application, a written submission and supporting evidence, No “court appearances” are required. RECOUP Contractor Debt Recovery manages the whole adjudication process for their clients. This means RECOUP Contractor Debt Recovery’s clients can get on with their day to day business with minimal distraction.

For contractors working for the head contractor don’t forget New South Wales is the only state where a contractor, at the time of applying for adjudication, can serve a payment withholding request on a principal to enable a principal in due course to pay the contractor directly. This process uses the Contractors Debts Act 1997 to follow through from the Security Of Payments Act NSW where the process begins. RECOUP Contractor Debt Recovery are experts on this process.

Building Construction Industry Payments Act 2004 QLD Bill Update

In May 2014, the Building and Construction Industry Payments Act 2004 QLD (BCIPA) Bill 2014 (Bill) was introduced to the Queensland Parliament. Changes based on the Bill expected to commence 1 September 2014 did not occur. Subsequently an amendment to the Building and Construction Industry Payments Act 2004 QLD (BCIPA) Bill (Amended Bill) was passed on 11 September 2014 following the delivery of a Parliamentary Committee Report (Report) on 1 September 2014.

Resulting from the 18 recommendations suggested by the Report, a limited number of the recommendations were subsequently incorporated into the Amended BCIPA Bill. The limited adoption of all 18 recommendations despite general support of its principles was due to the consideration that their objectives could be achieved in other ways such as through amending regulations instead of amending the Bill.

Below is a brief summary of several key changes included with the Amended Bill (Building and Construction Industry Payments Act 2004 QLD).

  • For matters relating the registration and appointment of adjudicators, the Queensland Building and Construction Commission (QBCC) replaces the current system with the claimant selecting an authorised nominating authority (ANA) and then the ANA referring the matter to an adjudicator. Despite the Report recommending the Amended Bill to include high-level guiding principles regarding the appointment process of adjudicators, the Government has proposed that a policy approved by the QBCC Board and published on the QBCC’s website by completed instead. Included within the Amended Bill is an allowance for the QBCC Board to make a policy governing the administration of Building and Construction Industry Payments Act (BCIPA).
  • The duration for which a payment claim can be made submitted has been halved from 12 months to six months from the date of the completion of construction work or the supply of related goods and services supplied (unless a longer period is stipulated within the contract).
  • A dual model regime will commence replacing a generalised scheme to allow for extended time frames in order to settle complex payment claims. The Bill defines that a ‘complex payment claim’ is a claim with an amount in excess of $750,000.00 (or a greater amount prescribed by regulation), a latent condition or a time-related cost. However in the Amended Bill reference to the latest and time-related cost is removed resulting in a change to the definition of a ‘complex payment claim’. A ‘complex payment claim’ is now defined pursuant to the Amended Bill as a claim that is assessed solely on monetary value e.g. $750,000 and above as prescribed by regulations excluding GST.
  • Changes have also been applied to the Christmas shut down period. The extension as a result of changes to the definition of business days will now exclude the period between 22 December and 10 January over the industry shut down period.
  • Respondents can now include new reasons for withholding payment in their adjudication responses that were not previously included in the payment schedule. A right of reply for the new reasons is provided to the claimants for up to 15 business days as well as applying via the adjudicator for an additional 15 days if the nature of the new reasoning is complex.
  • Transitional arrangements are included within the Amended BCIPA Bill to deal with construction contracts entered into before commencement. Such transitional arrangements are a combination of the unamended BCIPA and changes to the Bill included by the passing of the Amended Bill. Construction contracts signed before commencement will maintain the existing security of progress payment provisions under BCIPA and progress payments. Under the Amended Bill, the changes to the functions of the ANA’s such as the appointment of adjudicators have being transferred to the registrar will apply to the construction contract. Any application that is submitted before the official commencement of the Amended Bill be handled under the previous BCIPA processes as the Amended Bill is currently awaiting Royal Assent for commencement.

The Amended Bill, Building and Construction Industry Payments Act 2004 QLD (BCIPA) Bill (Amended Bill) upon receiving the Royal Assent will be an important development in the construction industry. It is highly advised that both claimants and respondents familiarise themselves with the new procedures and amendments to understand the implication of such changes. The drafting of new construction contracts should also take into account the changes to BCIPA for both Claimants and Respondents seeking resolution to building and construction payment Disputes.

BCIPA QLD Adjudication Applications will remain the most efficient means of Debt Recovery and Debt Collection for Queensland Building & Construction Contractors.

contact