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The
Building and Construction Industry Security
of Payment Act 2002 has been amended to make
it much easier for builders, sub-contractors
and suppliers to get paid. The amendments
bring the Act into line with the equivalent
legislation in New South Wales.
Whilst the amendments are wide ranging,
possibly the most important for claimants
are those in sections 28P, 28Q and 28R. The
upshot of these new sections is that if a
respondent fails to pay to the claimant the
amount determined by an adjudicator, the
claimant may obtain a certificate for the
adjudicated amount from the authority that
nominated the adjudicator. This is called
an adjudication certificate.
Upon receipt of the adjudication certificate,
the claimant can commence a proceeding in
the court and immediately make an application
for judgement on the basis of the adjudication
certificate. Section 28R(4) provides that
the Court must not enter judgement unless
it is satisfied the Respondent has failed
to pay the whole or any part of the amount
stated on the adjudication certificate. This
means that the claimant needs only to prove
the fact of the issue of the adjudication
certificate and non-payment of the adjudicated
amount in order for the court to enter judgement.
Furthermore, the
Supreme Court has recently held that an
application for judgement made under section
28R may be made ex parte (in the absence
of the respondent). (PDF 158KB).
Previously, after commencing proceedings,
serving the respondent and awaiting its defence,
claimants had to then proceed to a contested
hearing, whether on a summary basis or following
a trial, before obtaining judgement. Often,
applications for summary judgement made by
claimants failed because the respondent was
able to raise an “arguable
defence” that
the court ruled should be determined at a
trial.
Now, however, it
appears that the amendments have the effect
of simplifying and shortening the process
of obtaining judgement following an adjudicator’s
determination. As industry participants
well know, time is crucial in these matters,
especially as obtaining judgement against
the respondent is necessary to seek recovery
against third party principals.
It is well known that cash flow is the lifeblood
of the construction industry, so all people
in the industry should familiarise themselves
with the Act in order to ensure the life
blood keeps flowing.
At Noble Lawyers, we have extensive knowledge
of the security of payment legislation and
its practical operation. Our principal, Darren
Noble, has spent more than 20 years in the
construction industry in various roles. That
experience has founded a practical common
sense approach to dealing with the needs
and concerns of all who are involved in the
construction industry.
For assistance or advice
about any commercial or construction matter,
just contact us via the details on this page.
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