Building and Construction Industry Security of Payment Act 2009
In ForceTAS
Jurisdiction
Tasmania
Act Number
86 of 2009
Collection
act
Plain English Summary
6/10 complexity
This law creates a statutory process so contractors, subcontractors and suppliers can claim and quickly recover progress payments under building and construction contracts. It provides a standard claim/schedule route, fast adjudication and direct enforcement, with liens and fee recovery available, and it voids pay‑when‑paid protections.
It chiefly benefits claimants by speeding cashflow, shifts immediate payment risk and fee costs to respondents, and tight timelines and official oversight mean contract and cash‑flow practices must change.
Mechanically, the Building and Construction Industry Security of Payment Act 2009 (the Act) creates a statutory regime that (a) establishes an entitlement to regular progress payments for persons carrying out building work or supplying building or construction‑related goods and services (s 12); (b) prescribes how progress payments are claimed and responded to by way of written payment claims (s 17) and payment schedules (s 18); (c) sets down time limits and consequences where respondents fail to provide a payment schedule or fail to pay scheduled or claimed amounts (ss 19-20); (d) provides a rapid adjudication pathway for resolving disputes about progress payments through nominating authorities and qualified adjudicators (Part 5, ss 21-28) and makes adjudicator determinations payable within short fixed periods (s 26); (e) permits successful claimants to obtain an adjudication certificate and to file that certificate as a judgment for debt (ss 26-27); and (f) gives claimants a statutory right to suspend work or supply in specified circumstances (s 29). The Act also establishes administrative roles (Security of Payments Official, nominating authorities) and fee arrangements (ss 30-33, 32, 37).
The Act states its object explicitly: to ensure that any person who undertakes to carry out building work or construction work, or to supply related goods and services under a building or construction contract, including residential contracts, is entitled to receive, and is able to recover, progress payments (s 3). That is the policy claim embedded in the text.
Testing that policy claim against the Act’s mechanics shows the following incentive and implementation structure. The Act shifts payment‑risk allocation toward the claimant by creating statutory remedies that are relatively fast and debt‑like. If a respondent does not provide a payment schedule within the applicable period, the respondent becomes liable to pay the claimed amount (s 19(2)). If a respondent provides a payment schedule but then does not pay the scheduled amount, the claimant can pursue the unpaid part by court action or adjudication (s 20(2)). Adjudication outcomes are time‑sensitive: an adjudicator’s determination must be paid by the respondent within 5 business days of service (s 26(1)), and a nominating authority can issue an adjudication certificate that is capable of being filed and enforced as a judgment (ss 26(4)-(5), 27(1)-(2)). These features create strong incentives for prompt payment by respondents, and for claimants to use the statutory processes rather than protracted contract litigation.
Current sections
Direct links to the current provisions in Building and Construction Industry Security of Payment Act 2009.
This Act commences on the day on which this Act receives the Royal Assent.
3
Object
3 Object
The object of this Act is to ensure that any person who undertakes to carry out building work or construction work (or who undertakes to supply building or construction-related goods and services) under a building or construction contract, including such a contract that relates to a residential structure, is entitled to receive, and is able to recover, progress payments in relation to the work or goods and services.
4
Interpretation
4 Interpretation
In this Act, unless the contrary intention appears –
adjudicated amount means the amount of a progress payment that an adjudicator determines to be payable under section 25 ;
adjudication application means an application made under section 21 ;
adjudication certificate means an adjudication certificate issued under section 26(4) ;
adjudication fees means fees or expenses charged by a nominating authority under section 32 or by an adjudicator under section 37 ;
adjudication response means a response lodged with an adjudicator under section 23 ;
adjudicator, in relation to an adjudication application, means a person who has accepted under section 22(4) a referral of the adjudication application;
building includes a proposed building or part of a building and a building that is able to be relocated;
building or construction contract means a contract, or other arrangement, under which one party undertakes to carry out building work or construction work for, or to supply building or construction-related goods and services to, another party;
building or construction-related goods and services has the meaning it has in section 6 ;
building work or construction work has the meaning it has in section 5 ;
claimant means a person by whom a payment claim is served under section 17 ;
claimed amount means –
(a) an amount of a progress payment claimed, in accordance with section 17 , in a payment claim, to be due for building work or construction work carried out or for building or construction-related goods and services supplied; or
(b) any other amount specified in the payment claim in accordance with section 17(3) ;
due date, in relation to a progress payment, means the due date for the progress payment as determined in accordance with section 15 ;
fire safety system includes any one or more of the following:
nominating authority means a person who is authorised to be a nominating authority under section 31(2) ;
payment claim means a claim made under section 17 ;
payment schedule means a payment schedule provided to a claimant under section 18 ;
plumbing installation means –
(a) a system of water supply; or
(b) a system of sewage or sullage drainage or disposal; or
(c) a system of stormwater drainage, roof drainage or trade waste; or
(d) an on-site waste water management system;
progress payment means a progress payment to which a person is entitled under section 12 and includes –
(a) the final payment for building work or construction work carried out, or for building or construction-related goods and services supplied, under a building or construction contract; and
(b) a single or one-off payment for carrying out building work or construction work, or supplying building or construction-related goods and services, under a building or construction contract; and
(c) a payment that is based on an event or date;
recognised financial institution means –
(a) an authorised deposit-taking institution; or
(b) a "body regulated by APRA" within the meaning of the Australian Prudential Regulation Authority Act 1998 of the Commonwealth; or
(c) a prescribed person or body, or a member of a prescribed type of persons or bodies;
reference date, in relation to a building or construction contract, means –
(a) a date determined by, or in accordance with, the terms of the contract as the date on which a claim for a progress payment may be made in relation to –
(i) work carried out, or undertaken to be carried out, under the contract; or
(ii) building or construction-related goods and services supplied, or undertaken to be supplied, under the contract; or
(b) if the contract does not expressly provide for such a date, the last day of each month in which –
(i) building work or construction work is carried out under the contract; or
(ii) building or construction-related goods and services are supplied under the contract;
residential structure means a building or structure that is a class 1 or a class 10 building or structure within the meaning of the Building Code of Australia, as in force from time to time;
respondent means a person on whom a payment claim is served under section 17 ;
road infrastructure means –
(a) any land that is to be used as a road (whether public or private); or
(b) any land that is to be used as a footpath, bike path or public thoroughfare for pedestrians or vehicles; or
(c) any structures or works that are associated with, or co-located with, such a road, path or thoroughfare, including –
(i) kerbing, guttering, roundabouts, median strips and barriers; and
(ii) parking places or facilities; and
(iii) bridges, viaducts and tunnels; and
(iv) other works carried out in, on, under or over a road, path or thoroughfare;
scheduled amount means the amount of a progress payment that is proposed to be made under a payment schedule;
Security of Payments Official means the person who, in accordance with section 30 , is the Security of Payments Official;
structure includes a proposed structure, part of a structure and a temporary structure;
temporary structure includes any –
(a) booth, tent or other temporary enclosure, whether or not a part of the booth, tent or enclosure is permanent; and
(b) temporary seating structure; and
(c) stage, platform, or tower, that is temporary; and
(d) temporary bridge; and
(e) structure that does not form part of the land and is temporary; and
(e) the 27th, 28th, 29th, 30th or 31st of December.
(2) For the purposes of the definition of business day in subsection (1) , a day referred to in that definition is a holiday for all of the day and in the whole of the State.
5
Meaning of building work or construction work
5 Meaning of building work or construction work
(1) For the purposes of this Act, building work or construction work means any of the following:
(a) the construction, erection, re-erection, alteration, repair, restoration, maintenance, extension, adding to, underpinning, removal, demolition, or dismantling, of –
(i) buildings; or
(ii) structures that form, or are to form, part of land;
(b) the construction, alteration, repair, restoration, maintenance, extension, removal, demolition or dismantling of works that form, or are to form, part of land, including –
(i) walls; and
(ii) road infrastructure; and
(iii) energy infrastructure and telecommunications facilities; and
(iv) aviation landing facilities and railway infrastructure; and
(v) marine infrastructure, water and sewerage infrastructure, drainage infrastructure, dams and canals and installations for the purposes of irrigation, land drainage or coast or river protection; and
(vi) structures, such as poles, wires and netting, erected to support or protect agricultural, horticultural or forestry products; and
(vii) structures (other than underground structures constructed to enable access to minerals) to enable persons to gain access to places on which agricultural, horticultural, forestry, tourist or mining activities are being, or are to be, carried out;
(c) the installation or alteration in, or removal from, any building, structure or works, of systems, and services, that form, or are to form, part of land, including –
(i) heating, ventilation, air-conditioning and cooling systems; and
(ii) power supply, lighting and communication systems; and
(iii) passenger lifts and goods lifts; and
(iv) plumbing installations; and
(v) fire safety systems and security systems;
(d) any operation that forms an integral part of, is preparatory to, or completes, work referred to in paragraph (a) , (b) or (c) , including –
(i) site clearance, earth-moving, excavation, tunnelling, boring and filling; and
(ii) the preparation of foundations; and
(iii) the erection, maintenance or dismantling of plant and equipment; and
(iv) the prefabrication of components to form part of any building, structure or works, whether the prefabrication is carried out on-site or off-site; and
(v) site restoration, landscaping and the provision of road infrastructure and other works to enable access to land or a part of land;
(e) the internal or external cleaning of buildings, structures, or works, that is carried out in the course of the construction, alteration, repair, restoration, maintenance, extension, removal, demolition or dismantling of the buildings, structure or works;
(f) the painting or decoration of the internal or external surfaces of any building, structure or works;
(g) other work of a type prescribed to be a type of building work or construction work for the purposes of this Act.
(2) Despite subsection (1) , the following work is not building work or construction work for the purposes of this Act:
(a) the drilling for, or extraction of, oil or natural gas;
(b) the extraction (whether by underground or surface working) of minerals, including tunnelling or boring, or the construction of underground works for the purpose of such extraction;
(c) other work of a type prescribed to not be building work or construction work for the purposes of this Act.
6
Meaning of building or construction-related goods and services
6 Meaning of building or construction-related goods and services
(1) For the purposes of this Act, building or construction-related goods and services, in relation to building work or construction work, means any of the following:
(a) goods of the following kind:
(i) materials and components that are to form part of any building, structure or work arising from building work or construction work;
(ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of building work or construction work;
(b) services of the following kind:
(i) the provision of labour to carry out building work or construction work;
(ii) architectural, design, land surveying, quantity surveying, engineering, building surveying or project management services in relation to building work or construction work;
(iii) inspection, reporting, or advisory, services provided in respect of buildings, building systems and services, energy and sustainability systems and services, geotechnical, engineering, interior decoration, exterior decoration or landscape services provided in relation to building work or construction work;
(c) goods and services of a type prescribed to be a type of building or construction-related goods and services for the purposes of this Act.
(2) Despite subsection (1) , "building or construction-related goods and services" does not include goods or services of a type that is prescribed to not be building or construction-related goods and services for the purposes of this Act.
(3) A reference in this Act to building or construction-related goods and services is to be taken to be a reference to building or construction-related goods, building or construction-related services, or both.
Part 2
Application and Effect of Act in Relation to other Acts, Contracts, &c.
Part 2 Application and Effect of Act in Relation to other Acts, Contracts, &c.
7
Application of Act
7 Application of Act
(1) This Act applies to any building or construction contract, whether the contract –
(a) is written or oral; or
(b) is partly written and partly oral; or
(c) is expressed to be governed by the law of a jurisdiction other than Tasmania.
(2) This Act does not apply to a building or construction contract to the extent to which it relates to building work or construction work carried out outside this State.
(3) Despite subsection (2) , this Act applies to any building or construction contract in so far as the contract relates to the supply by a person in this State of building or construction-related goods and services, even though the goods and services are supplied in respect of building work or construction work carried out outside this State.
(4) However, despite subsection (3) , nothing in this Act is to be taken to entitle a person to a payment if a claim for the payment has been made under the law of another jurisdiction.
(5) Despite subsection (1) , this Act does not apply to a building or construction contract –
(a) that forms part of a loan agreement, a contract of guarantee or a contract of insurance, if the agreement or contract is an agreement or contract under which a recognised financial institution undertakes –
(i) to lend money or to repay money lent; or
(ii) to guarantee payment of money owing or repayment of money lent; or
(iii) to provide an indemnity in respect of building work or construction work carried out, or building or construction-related goods and services supplied, under the building or construction contract; or
(b) under which it is agreed that the consideration payable for building work or construction work carried out under the contract, or for building or construction-related goods and services supplied under the contract, is to be calculated otherwise than by reference to the value of the work carried out or the value of the goods and services supplied.
(6) This Act does not apply to a building or construction contract to the extent to which it contains provisions under which a party –
(a) undertakes to carry out building work or construction work; or
(b) undertakes to supply building or construction-related goods and services –
as an employee of the party for whom the work is to be carried out or the goods and services are to be supplied, or as a condition of a loan agreement with a recognised financial institution.
(7) This Act does not apply to a building or construction contract to the extent to which it contains provisions under which a party undertakes –
(a) to lend money or to repay money lent; or
(b) to guarantee payment of money owing or repayment of money lent; or
(c) to provide an indemnity in respect of building work or construction work carried out, or building or construction-related goods and services supplied, under the building or construction contract.
(8) This Act does not apply to a building or construction contract, or a class of building or construction contracts, prescribed to be a contract or class of contracts to which this Act does not apply.
8
Act binds Crown
8 Act binds Crown
This Act binds the Crown in right of Tasmania and, so far as the legislative power of Parliament permits, in all its other capacities.
9
Act does not limit other entitlements or remedies
9 Act does not limit other entitlements or remedies
This Act does not limit –
(a) any other entitlement that a claimant may have under a building or construction contract; or
(b) any other remedy that a claimant may have for recovering any such other entitlement.
10
Effect on civil proceedings
10 Effect on civil proceedings
(1) Subject to section 11 , nothing in Part 4 , 5 , 6 or 7 affects any right that a party to a building or construction contract –
(a) may have under the contract; or
(b) may have under Part 3 in respect of the contract; or
(c) may have, apart from this Act, in respect of anything done or omitted to be done under the contract.
(2) Nothing done under or for the purposes of Part 4 , 5 , 6 or 7 affects any civil proceedings arising under a building or construction contract, whether under Part 4 , 5 , 6 or 7 , except as provided by subsection (3) .
(3) In proceedings before a court or tribunal in relation to a matter arising under a building or construction contract, the court or tribunal –
(a) must allow for an amount to be paid to a party to the contract, under or for the purposes of Part 4 , 5 , 6 or 7 , in any award or order it makes in those proceedings; and
(b) may make the orders that it considers appropriate for the restitution of any amount so paid, and any other orders it thinks appropriate, having regard to its decision in those proceedings.
11
Parties cannot contract out of Act
11 Parties cannot contract out of Act
(1) The provisions of this Act have effect despite any provision to the contrary in any contract.
(2) A provision of a contract or other agreement, whether in writing or not, is void if it is a provision –
(a) under which the operation of this Act is, or is purported to be, excluded, modified or restricted, or that has the effect of excluding, modifying or restricting, the operation of this Act; or
(b) that may reasonably be construed as an attempt to deter a person from taking action under this Act.
Part 3
Rights to Progress Payments
Part 3 Rights to Progress Payments
12
Rights to progress payments
12 Rights to progress payments
(1) A person –
(a) who has undertaken to carry out building work or construction work under a building or construction contract; or
(b) who has undertaken to supply building or construction-related goods and services under a building or construction contract –
is entitled, on and from each reference date, to a progress payment.
(2) The amount of the progress payment is to be the amount calculated in accordance with the terms of the contract.
(3) However, if the contract does not expressly provide for the calculation of the amount of the progress payment, the amount of the progress payment is to be –
(a) the amount calculated on the basis of the value of the building work or construction work –
(i) carried out before the reference date by the person under the contract; or
(ii) undertaken to be carried out before the reference date by the person under the contract; or
(b) the amount calculated on the basis of the value of the building or construction-related goods and services –
(i) supplied by the person under the contract before the reference date; or
(ii) undertaken to be supplied by the person under the contract before the reference date.
13
How value of building work or construction work, &c., to be determined
13 How value of building work or construction work, &c., to be determined
(1) The value of building work or construction work carried out under a building or construction contract is to be determined in accordance with the terms of the contract.
(2) However, if a building or construction contract does not expressly determine the value of building work or construction work, or specify how the value of building work or construction work is to be determined, the value of the building work or construction work is to be determined having regard to –
(a) the contract price for the work, including any GST that may be payable in relation to the work; and
(b) any other rates or prices set out in the contract; and
(c) any variation agreed to by the parties to the contract by which the contract price, or any other rate or price set out in the contract, is to be adjusted by a specific amount; and
(d) if any of the work is defective, the estimated cost of rectifying the defect.
(3) The value of building or construction-related goods and services supplied, or undertaken to be supplied, under a building or construction contract is to be determined in accordance with the terms of the contract.
(4) However, if a building or construction contract does not expressly determine the value of building or construction-related goods and services, or specify how the value of building or construction-related goods and services is to be determined, their value is to be determined having regard to –
(a) the contract price for the building or construction-related goods and services; and
(b) any other rates or prices set out in the contract; and
(c) any variation agreed to by the parties to the contract by which the contract price, or any other rate or price set out in the contract, is to be adjusted by a specific amount; and
(d) if any of the goods are defective, the estimated cost of rectifying the defect.
(5) If building or construction-related goods and services consist of materials and components that are to form part of any building, structure, or work, arising from building work or construction work, the only materials and components to be included in the valuation are those that have become (or, on payment, will become) the property of the party for whom the building work or construction work is being carried out.
14
Liens over unpaid amounts
14 Liens over unpaid amounts
(1) If a progress payment becomes due and payable, the claimant is entitled to exercise a lien in respect of the unpaid amount over any unfixed plant or materials supplied by the claimant for use in connection with the carrying out of the building work or construction work for the respondent.
(2) A lien or charge –
(a) over any unfixed plant or materials supplied by the claimant for use in connection with the carrying out of the building work or construction work for the respondent; and
(b) that existed before the date on which the progress payment becomes due or payable –
(3) Subsection (1) does not confer on the claimant any right against a third party who is the owner of the unfixed plant or materials.
(4) A claimant is not entitled to exercise a lien under subsection (1) in respect of an unpaid amount if the claimant receives the progress payment in respect of the amount.
15
Due date for payment
15 Due date for payment
(1) A progress payment under a building or construction contract becomes due and payable on the date on which the payment becomes due and payable in accordance with the terms of the contract.
(b) specified in the building or construction contract –
whichever is greater.
16
"Pay-when-paid" provisions of no effect
16 "Pay-when-paid" provisions of no effect
(1) In this section –
money owing, in relation to a building or construction contract, means money owing for –
(a) building work or construction work carried out, or undertaken to be carried out, under the contract; or
(b) building or construction-related goods and services supplied, or undertaken to be supplied, under the contract;
pay-when-paid provision, of a building or construction contract, means a provision of the contract –
(a) that makes the liability of one party ("the first party") to pay money owing to another party ("the second party") contingent on payment to the first party by a further party ("the third party") of the whole or a part of that money; or
(b) that makes the due date for payment of money owing by the first party to the second party dependent on the date on which payment of the whole or a part of that money is made to the first party by the third party; or
(c) that otherwise makes the liability to pay money owing, or the due date for payment of money owing, contingent or dependent on the operation of another contract.
(2) A pay-when-paid provision of a building or construction contract has no effect in relation to any payment for –
(a) building work or construction work carried out, or undertaken to be carried out, under the contract; or
(b) building or construction-related goods and services supplied, or undertaken to be supplied, under the contract.
Part 4
Payment Claims and Payment Schedules
Part 4 Payment Claims and Payment Schedules
17
Claims for payment may be made
17 Claims for payment may be made
(1) A person (in this Act referred to as a "claimant") who is, or who claims to be, entitled to a progress payment under section 12 in respect of a building or construction contract may serve a payment claim on the person who is, or may be, liable under the contract to make the payment.
(2) A payment claim must –
(a) be in writing; and
(b) be addressed to the person on whom it is served; and
(c) state the name of the claimant; and
(d) identify the building work or construction work, or building or construction-related goods and services, to which the progress payment relates, in sufficient detail to enable the person on whom it is served to assess the claim; and
(e) specify the amount of the progress payment that the claimant claims is due; and
(f) state that the claim is made under this Act; and
(g) include the prescribed details, if any.
(3) A payment claim may also include an amount –
(a) that the respondent is liable to pay the claimant under section 29(3) ; or
(b) that is held under the building or construction contract by the respondent, as security or otherwise, and that the claimant claims is due for release.
(4) A claimant must not serve more than one payment claim in respect of each reference date under the building or construction contract.
(5) However, subsection (4) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim.
(6) A payment claim may be served only within whichever of the following periods occurs later:
(a) the period determined by or in accordance with the terms of the building or construction contract;
(b) the period of 12 months after –
(i) the building work or construction work to which the claim relates was last carried out; or
(ii) the building or construction-related goods and services to which the claim relates were last supplied.
18
Schedules for payment may be provided to claimant
18 Schedules for payment may be provided to claimant
(1) A person (in this Act referred to as the "respondent") on whom a payment claim is served by a claimant may provide to the claimant a payment schedule in relation to the claim.
(2) A payment schedule –
(a) must identify the payment claim to which the schedule relates; and
(b) must indicate the amount of the payment, if any, that the respondent proposes to make (in this Act referred to as the "scheduled amount").
(3) If the scheduled amount is less than the claimed amount, the schedule must specify why the amount is less.
(4) If the amount is less because the respondent is withholding payment of the claim for any reason, the schedule must specify the respondent's reasons for withholding the payment.
19
Consequences of failing to provide payment schedule within relevant period
19 Consequences of failing to provide payment schedule within relevant period
(1) In this section –
building practitioner means any of the following persons:
(b) a person who holds a practitioner's licence, or a contractor's licence, under the Occupational Licensing Act 2005 , authorising the person to perform electrical work within the meaning of Part 1 of Schedule 2 to that Act;
(f) a person who is registered as an architect under the Architects Act 1929 ;
(g) a prescribed person;
owner, in relation to land, means any one or more of the following:
(a) the person in whom is vested a fee simple in the land;
(b) if the land is not registered under the Land Titles Act 1980 and is subject to a mortgage, the person for the time being holding the equity of redemption in that mortgage;
(c) if the land is held under a tenancy for life, the person who is the life tenant;
(d) if the land is held under a lease for a term of not less than 99 years or for a term of not less than another prescribed period, the person who is the lessee of the land;
(e) a person who has a prescribed interest in the land.
(a) a claimant serves a payment claim on a respondent; and
(b) the respondent does not provide to the claimant a payment schedule –
(i) before the end of the period in which the payment is required to be made under the building or construction contract under which the payment is to be made; or
(ii) before the expiry of the applicable day in relation to the payment claim made to the respondent –
whichever period expires earlier or, in a case to which subsection (3)(a) applies, later, the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.
(3) In subsection (2)(b)(ii) , the applicable day in relation to a payment claim made to the respondent –
(a) is the day 20 business days after the payment claim is served on the respondent, if –
(i) the claim relates to a residential structure to be built on land; and
(ii) the respondent is the owner of the land; and
(iii) the respondent is not a building practitioner; or
(b) is, in any other case, the day 10 business days after the payment claim is served on the respondent.
(4) Subsection (5) applies to a claimant if the respondent –
(a) becomes liable under subsection (2) to pay to the claimant the claimed amount; and
(b) does not pay all of the claimed amount on or before the due date for the progress payment to which the payment claim relates.
(5) If this subsection applies to a claimant, the claimant –
(a) may –
(i) apply to a court of competent jurisdiction to recover from the respondent the unpaid part of the claimed amount, as a debt due to the claimant; or
(ii) make an adjudication application under section 21 in relation to the payment claim; and
(b) may serve notice on the respondent of the claimant's intention to suspend carrying out building work or construction work, or supplying goods and services, under the building or construction contract.
(6) A notice served under subsection (5)(b) must specify that the notice is made under this Act.
(7) If an application is made by a claimant to a court in accordance with subsection (5)(a)(i) to recover from the respondent, as a debt, the unpaid part of the claimed amount specified in a payment claim, the court may give judgment entitling the claimant to recover the unpaid part as a debt due and payable, if the court is satisfied that the respondent –
(a) is liable under subsection (2) to pay to the claimant the claimed amount; and
(b) has not paid all of the claimed amount on or before the due date for the progress payment to which the payment claim relates.
(8) A respondent in proceedings under this section in a court of competent jurisdiction is not entitled in those proceedings –
(a) to bring a cross-claim against the claimant; or
(b) to raise a defence in relation to matters arising under, or relating to the subject matter of, the building or construction contract.
20
Consequences of not paying claimant in accordance with payment schedule
20 Consequences of not paying claimant in accordance with payment schedule
(i) within the period in which the payment is required to be made under the building or construction contract under which the payment is to be made; or
(ii) within the period before the expiry of the applicable day determined under section 19 in relation to the payment claim –
whichever period expires earlier or, in a case to which section 19(3)(a) applies, later; and
(c) the payment schedule indicates a scheduled amount that the respondent proposes to pay to the claimant; and
(d) the respondent does not pay to the claimant all of the scheduled amount on or before the due date for the progress payment to which the payment claim relates.
(2) If this subsection applies to a claimant, the claimant –
(a) may –
(i) apply to a court of competent jurisdiction to recover from the respondent the unpaid part of the scheduled amount, as a debt due to the claimant; or
(ii) make an adjudication application under section 21 in relation to the payment claim; and
(b) may serve notice on the respondent of the claimant's intention to suspend carrying out building work or construction work, or supplying goods and services, under the building or construction contract.
(3) A notice served under subsection (2)(b) must specify that the notice is made under this Act.
(4) If an application is made by a claimant to a court in accordance with subsection (2)(a)(i) to recover from the respondent, as a debt, the unpaid part of the scheduled amount specified in a payment claim, the court may give judgment entitling the claimant to recover the unpaid part as a debt due and payable, if the court is satisfied that –
(b) the respondent has not paid all of the scheduled amount on or before the due date for the progress payment to which the payment claim relates.
(5) A respondent in proceedings under this section in a court of competent jurisdiction is not entitled in those proceedings –
(a) to bring a cross-claim against the claimant; or
(b) to raise a defence in relation to matters arising under, or relating to the subject matter of, the building or construction contract.
Part 5
Adjudication of Disputes
Part 5 Adjudication of Disputes
21
Applications for adjudication
21 Applications for adjudication
(1) A claimant may, in writing, apply to a nominating authority, chosen by the claimant, to have a payment claim adjudicated.
(2) A claimant may only make an application under subsection (1) if –
(a) the respondent provided a payment schedule under section 18 but the scheduled amount specified in the schedule is less than the claimed amount specified in the payment claim; or
(b) the respondent provided a payment schedule under section 18 but did not pay to the claimant all of the scheduled amount by the due date for payment of the amount; or
(c) the respondent failed to provide a payment schedule to the claimant under section 18 and did not pay all of the claimed amount by the due date for payment of the amount.
(3) An application made under subsection (1) pursuant to –
(a) subsection (2)(a) must be made within 10 business days after the claimant receives the payment schedule; or
(b) subsection (2)(b) must be made within 20 business days after the due date for payment.
(a) must identify the payment claim and the payment schedule, if any, to which it relates; and
(b) must be accompanied by the application fee, if any, that the nominated authority may have determined; and
(c) may contain any submissions relating to the application that the applicant thinks fit.
(6) The application fee may not be greater than an amount, if any, determined by the Minister, by notice published in the Gazette, to be the maximum amount of the application fee.
(7) A copy of an application made under subsection (1) must be served on the respondent.
(8) A claimant may, at any time before an application made under subsection (1) has been determined by an adjudicator, withdraw the application by notice served on the adjudicator and the respondent.
(9) A claimant who withdraws an application under subsection (8) is liable to pay any fees and expenses to which an adjudicator is entitled under section 37(1) in relation to the application.
22
Appointment of adjudicator
22 Appointment of adjudicator
(1) A nominating authority to which an adjudication application is made in relation to a building or construction contract is to refer the matter as soon as practicable to a person who is a qualified adjudicator.
(2) A person is a qualified adjudicator if the person is a natural person with the qualifications, expertise and experience, if any, determined by the Security of Payments Official to be required.
(3) A nominating authority to which an adjudication application is made in relation to a building or construction contract may not refer the matter to a qualified adjudicator –
(a) if the adjudicator is a party to the building or construction contract; or
(b) in circumstances prescribed for the purposes of this subsection.
(4) A qualified adjudicator may accept an adjudication application referred to the adjudicator under subsection (1) by serving notice of acceptance on the claimant and the respondent in relation to the application.
23
Response by respondent to adjudication application
23 Response by respondent to adjudication application
(1) A respondent who has provided a payment schedule to the claimant within the period specified in section 19(2)(b) or section 21(4)(b) may lodge with the adjudicator a response to the claimant's adjudication application.
(2) An adjudication response may be lodged under subsection (1) within –
(a) 10 business days after receiving a copy of the adjudication application; or
(b) 5 business days after receiving notice of an adjudicator's acceptance of the application –
whichever period expires later.
(3) An adjudication response –
(a) must be in writing; and
(b) must identify the adjudication application to which it relates; and
(c) may contain any submissions relevant to the response that the respondent thinks fit.
(4) A respondent must not include in an adjudication response reasons for withholding payment, unless those reasons have already been included in the payment schedule provided to the claimant.
(5) A copy of the adjudication response must be served on the claimant.
(6) An adjudicator may not consider an adjudication response if it was made after the end of the period under subsection (2) in which the respondent may lodge an adjudication response.
24
Adjudication proceedings
24 Adjudication proceedings
(1) An adjudicator is to determine an adjudication application as soon as practicable and, in any case –
(a) within –
(i) 10 business days after the date on which the adjudicator receives the adjudication response; or
(ii) if the respondent lodged a payment schedule in relation to the payment claim to which the application relates, 10 business days after the date by which the respondent may, under section 23 , lodge with the adjudicator an adjudication response; or
(iii) if the respondent did not lodge a payment schedule in relation to the payment claim to which the application relates, 10 business days after the date on which the adjudicator accepted the application under section 22(4) ; or
(b) within a further period, if any, agreed to by the claimant and the respondent.
(2) In adjudication proceedings –
(a) an adjudicator may request further written submissions from a party to the proceedings; and
(b) if an adjudicator requests a party to make further written submissions, the adjudicator must give the other party an opportunity to comment on the submissions.
(3) An adjudicator may specify periods in which submissions and comments may be made by parties to the adjudication proceedings.
(4) An adjudicator may call a conference of the parties to adjudication proceedings and may invite to attend the conference those persons who, in the opinion of the adjudicator, have an interest in, or may assist in the consideration of, the matter to which the proceedings relate.
(5) A conference is to be conducted informally and may not be attended by a legal representative of any party.
(6) An adjudicator may carry out an inspection of any matter that relates to a payment claim to which the adjudication proceedings relate.
25
Determination of adjudication application
25 Determination of adjudication application
(1) An adjudicator is to determine an adjudication application –
(a) by determining whether or not all or part of a progress payment is to be paid by the respondent to the claimant; and
(b) if the adjudicator determines that all or part of a progress payment is to be paid by the respondent to the claimant, by determining –
(i) the amount of the payment; and
(ii) the date on which the payment became or becomes payable; and
(iii) the rate of interest payable on the amount.
(2) In determining an adjudication application, an adjudicator is to consider only the following matters:
(a) the provisions of this Act;
(b) the provisions of the building or construction contract to which the application relates;
(c) the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim;
(d) the payment schedule, if any, to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule;
(e) the results of any inspection carried out by the adjudicator of any matter to which the claim relates.
(3) An adjudicator may determine an adjudication application even if –
(a) a party fails to make a submission or comment within the period specified by the adjudicator; or
(b) a party fails to attend a conference called by the adjudicator.
(4) The adjudicator's determination –
(a) must be in writing; and
(b) must include the reasons for the determination, unless the claimant and the respondent have both requested the adjudicator not to include the reasons in the determination.
(5) If an adjudicator, in determining an adjudication application, has determined in accordance with section 13 the value of building work or construction work carried out, or of building or construction-related goods and services supplied, under a building or construction contract, the same value is to be determined for that work or those goods and services in any determination of a subsequent adjudication application in relation to the contract.
(6) Despite subsection (5) , a different value may be determined if a party to the subsequent adjudication application satisfies the adjudicator of that application that the value of the works or goods and services has changed since the value was first determined.
(7) An adjudicator may determine that a party to an adjudication is required to pay to another party to the adjudication some or all of the costs that have been incurred by the other party because of frivolous or vexatious conduct, or the making of unfounded submissions, by the first-mentioned party.
(8) An adjudicator may, on his or her own initiative or on the application of a claimant or respondent, correct –
(a) a clerical mistake in a determination under this section; or
(b) an error arising from an accidental slip or omission in a determination under this section; or
(c) a material miscalculation of figures or a material mistake in the description of a person, thing or matter referred to in a determination under this section; or
(d) a defect of form in a determination under this section.
26
Respondent must pay amount determined by adjudicator
26 Respondent must pay amount determined by adjudicator
(1) If an adjudicator determines that a respondent is required to pay an adjudicated amount, the respondent must pay that amount to the claimant before –
(a) the end of the period of 5 business days immediately after the date on which the adjudicator's determination is served on the respondent; or
(2) If a respondent does not pay to the claimant all of the adjudicated amount in accordance with subsection (1) , the claimant may do either or both of the following:
(a) request the nominating authority to which the adjudication application was made to issue an adjudication certificate under this section;
(b) serve notice on the respondent of the claimant's intention to suspend carrying out building work or construction work, or supplying building or construction-related goods and services, under the building or construction contract.
(3) A notice under subsection (2)(b) must specify that it is made under this Act.
(4) A nominating authority that receives a request under subsection (2)(a) in relation to an adjudication application may issue an adjudication certificate in relation to the application.
(5) An adjudication certificate issued under this section must specify that it is made under this Act and specify the following matters:
(a) the name of the claimant;
(b) the name of the respondent who is liable to pay the adjudicated amount;
(c) the adjudicated amount;
(d) the date on which payment of the adjudicated amount was due to be paid to the claimant.
(6) If an amount of interest that is due and payable on the adjudicated amount is not paid by the respondent –
(a) the claimant may request the nominating authority to specify in the adjudication certificate the amount of interest payable; and
(b) the amount so specified is added to, and becomes part of, the adjudicated amount.
(7) If the claimant has paid the respondent's share of the adjudication fees in relation to the adjudication but has not been reimbursed by the respondent for that amount –
(a) the claimant may request the nominating authority to specify in the adjudication certificate that amount; and
(b) the amount so specified is added to, and becomes part of, the adjudicated amount.
27
Adjudication certificate may be filed as judgment for debt
27 Adjudication certificate may be filed as judgment for debt
(1) An adjudication certificate may be filed as a judgment for a debt in a court of competent jurisdiction.
(2) An adjudication certificate that is filed as a judgment for a debt in a court of competent jurisdiction is enforceable as a judgment for a debt.
(3) An adjudication certificate may only be filed under this section if it is accompanied by an affidavit by the claimant stating that a part of the adjudicated amount has not been paid at the time the certificate is filed.
(4) If the affidavit specifies that part of the adjudicated amount has not been paid, the judgment is only for that part of that amount.
(5) If the respondent commences proceedings to have the judgment set aside, the respondent –
(a) is not, in those proceedings, entitled –
(i) to bring a cross-claim against the claimant; or
(ii) to raise a defence in relation to matters arising under, or relating to the subject matter of, the building or construction contract; or
(iii) to challenge the adjudicator's determination; and
(b) must pay into the court as security the unpaid part of the adjudicated amount, pending the final determination of those proceedings.
28
When claimant may make new adjudication application
28 When claimant may make new adjudication application
(a) a claimant fails to receive, within 4 business days after the claimant makes an adjudication application, an adjudicator's notice of acceptance of the application under section 22(4) ; or
(b) an adjudicator in relation to an adjudication application fails to determine the application within the time allowed by section 24 .
(2) If this subsection applies to a claimant, the claimant –
(a) may withdraw the adjudication application made to the adjudicator, by serving notice in writing on the adjudicator or the nominating authority to whom the application was made; and
(b) may make a new adjudication application under section 21 .
(3) Despite section 21(3) , a new adjudication application may be made at any time within 5 business days after the claimant becomes entitled to withdraw the previous application under subsection (2) .
Part 6
Claimant's Right to Suspend Building Work or Construction Work or Supply
Part 6 Claimant's Right to Suspend Building Work or Construction Work or Supply
29
Claimant may suspend work or supply
29 Claimant may suspend work or supply
(1) A claimant may suspend the carrying out of building work or construction work, or the supply of building or construction-related goods and services, under a building or construction contract, if at least 2 business days have passed since the claimant served notice on the respondent under section 19 , 20 or 26 of the claimant's intention to do so.
(2) A claimant may not suspend the carrying out of building work or construction work, or the supply of building or construction-related goods and services, under a building or construction contract, after the end of the period of 3 business days immediately after the date on which the claimant receives payment for the amount payable by the respondent under section 19 , 20 or 26 .
(3) If a claimant –
(a) in accordance with this section, suspends the carrying out of building work or construction work, or the supply of building or construction-related goods and services, under a building or construction contract; and
(b) incurs loss or expenses as a result of the removal, by the respondent, from a contract, of a part of the work or supply –
the respondent is liable to pay the claimant the amount of the loss or expense.
(4) A claimant who, in accordance with this section, suspends the carrying out of building work or construction work, or the supply of building or construction-related goods and services, under a building or construction contract, is not liable for loss or damage suffered by the respondent, or a person claiming through a respondent, as a consequence of the claimant not carrying out the work, or supplying the services, during the period of suspension.
Part 7
Administration
Part 7 Administration
Division 1
Security of Payments Official
Division 1 Security of Payments Official
30
Security of Payments Official
30 Security of Payments Official
(1) The Security of Payments Official for the purposes of this Act is to be –
(b) if the Minister appoints another person under subsection (2) , that person.
(2) Subject to and in accordance with the State Service Act 2000 , the Minister may appoint a person to be the Security of Payments Official for the purposes of this Act.
Division 2
Nominating authorities
Division 2 Nominating authorities
31
Nominating authorities
31 Nominating authorities
(1) A person may apply to the Security of Payments Official to be authorised to be a nominating authority.
(2) The Security of Payments Official may, if he or she receives an application under subsection (1) , authorise to be a nominating authority a person specified in the application.
(3) A person who is authorised to be a nominating authority is so authorised for a period of 3 years from the date of the authorisation, but may be reauthorised.
(4) The Security of Payments Official may, by notice in writing to a person authorised to be a nominating authority –
(a) impose a condition on the authorisation; or
(b) vary a condition imposed on the authorisation; or
(c) revoke a condition imposed on the authorisation.
(5) The Security of Payments Official may only –
(a) impose a condition on the authorisation of a person to be a nominating authority; or
(b) vary a condition imposed on the authorisation of a person to be a nominating authority –
if –
(c) at least 14 days before, a notice has been served on the person inviting the person to show cause why the condition ought not be imposed or so varied; and
(d) the person has, for a period of at least 14 days from the date on which the notice under paragraph (c) was given, been given the opportunity to show cause why the condition ought not be imposed or so varied; and
(e) the Security of Payments Official has considered any reasons provided to him or her by the person as to why the condition ought not be imposed or so varied.
(6) The Security of Payments Official may –
(a) specify a maximum number of persons who may be authorised to be nominating authorities; and
(b) refuse to authorise a person to be a nominating authority if the maximum number of persons have been authorised to be nominating authorities; and
(c) revoke the authorisation of a person to be a nominating authority if the Security of Payments Official is satisfied that the nominating authority –
(i) has failed to comply with a request made to the authority under section 33(1) ; or
(ii) has contravened a condition imposed on the authorisation of the person to be a nominating authority; or
(iii) has otherwise failed to comply with a requirement of this Act.
(a) refuse to authorise the person to be a nominating authority; or
(b) impose a condition on the authorisation of the person to be a nominating authority; or
(c) vary a condition imposed on the authorisation of the person to be a nominating authority.
32
Nominating authorities may charge fees
32 Nominating authorities may charge fees
(1) A nominating authority may charge an amount for any service provided by the authority in connection with an adjudication application made to the authority.
(2) An amount that may be charged by a nominating authority for a service must not be more than the amount, if any, determined by the Minister by notice published in the Gazette.
(3) The claimant and respondent are –
(a) jointly and severally liable to pay an amount that is charged by a nominating authority in connection with an adjudication application made to the authority by the claimant; and
(b) each liable to contribute to the payment of the amount in equal proportions or, if the adjudicator in relation to the application determines different proportions, in the proportions so determined.
33
Nominating authorities to provide information
33 Nominating authorities to provide information
(1) The Security of Payments Official may request a nominating authority to provide to him or her information in relation to the activities of the authority under this Act, including information about any amounts charged by the authority under this Act.
(2) A nominating authority must comply with a request of the Security of Payments Official under subsection (1) .
34
Nominating authority to advise Security of Payments Official if certain legal processes begin
34 Nominating authority to advise Security of Payments Official if certain legal processes begin
A nominating authority must notify the Security of Payments Official if the authority becomes aware that an application has been made to a court in relation to a building or construction contract in relation to which an adjudication application has been made to the authority.
Division 3
Adjudicators
Division 3 Adjudicators
35
Disqualification of adjudicator for interest
35 Disqualification of adjudicator for interest
(1) An adjudicator in relation to an adjudication application is disqualified from adjudicating the application if he or she has a material personal interest in a building or construction contract, dispute, or party to the contract, to which the application relates.
(2) As soon as practicable after becoming aware that he or she is disqualified from adjudicating an application, an adjudicator must –
(a) cease to deal with the application; and
(b) serve notice in writing on the claimant and the respondent, specifying that the adjudicator is disqualified from adjudicating the application.
(3) An adjudicator who gives notice under subsection (2) in relation to an application must give notice in writing of the disqualification to the nominating authority that referred the application to him or her.
(4) Any decision of an adjudicator, in relation to an adjudication application, is void if the adjudicator is disqualified from adjudicating the application.
(5) Despite section 37(4) , the adjudicator is entitled to any fees or charges to which he or she would, but for that subsection, be entitled, in relation to the adjudication application, in respect of the services provided by him or her before he or she ought to have been aware that he or she was disqualified under this section.
(6) As soon as practicable after a nominating authority becomes aware that an adjudicator has ceased to deal with an adjudication application because he or she is disqualified from adjudicating the application, the nominating authority must refer the application to another adjudicator under section 22 .
(7) If a respondent receives notice under section 22(4) of the acceptance of an adjudication application by an adjudicator (the "new adjudicator") to whom the application has been referred under subsection (6) , an adjudication response provided to the previous adjudicator under section 23 is of no effect unless it is provided under section 23 to the new adjudicator.
(8) The nominating authority is not entitled to charge any amount under section 32 in relation to the referral of an application to another adjudicator in accordance with subsection (6) .
36
Request and review in relation to disqualification of adjudicator
36 Request and review in relation to disqualification of adjudicator
(1) A party to an adjudication application may, before the adjudicator in relation to the application has determined the application, by notice in writing to the adjudicator, request the adjudicator to take the actions specified in section 35(2) , because, in the party's opinion, the adjudicator is disqualified from adjudicating the application.
(2) A party to an adjudication application who makes a request to an adjudicator under subsection (1) must provide to the adjudicator particulars as to the grounds on which the party is of the opinion that the adjudicator is disqualified from adjudicating the application.
(3) Within 7 days after receiving a notice under subsection (1) , an adjudicator in relation to an adjudication application must –
(a) take the actions specified in section 35(2) ; or
(b) refuse to take the actions specified in section 35(2) .
(5) If an application is made under subsection (4) in respect of an adjudicator, a party to the adjudication application is not required to take any action in respect of a determination of the adjudicator under section 25 in relation to the adjudication application –
(a) until after the review is determined; and
(b) unless the decision of the adjudicator is upheld on the review.
(1) An adjudicator is entitled to be paid for adjudicating an adjudication application –
(a) the amount, by way of fees and expenses, that is agreed between the adjudicator and the parties to the adjudication; or
(b) if no amount is agreed between the adjudicator and the parties to the adjudication, the amount, by way of fees and expenses, that is reasonable having regard to the work done and the expenses incurred by the adjudicator.
(a) to uphold a decision by an adjudicator under section 36 not to take the action specified in section 35(2) , the adjudicator may charge the person who applied for the review the costs incurred by the adjudicator in relation to the review, unless the court has, under that Act, ordered those costs to be paid by a person other than the adjudicator; or
(b) not to uphold a decision by an adjudicator under section 36 not to take the action specified in section 35(2) , the adjudicator may not pass on to the parties to the adjudication application any costs incurred by the adjudicator.
(3) The claimant and respondent are –
(a) jointly and severally liable to pay an amount that is charged by an adjudicator under subsection (1) ; and
(b) each liable to contribute to the payment of the amount in equal proportions or, if the adjudicator in relation to the application determines different proportions, in the proportions so determined.
(4) An adjudicator is not entitled to be paid fees or expenses in connection with the adjudication of an adjudication application if he or she fails, within the time allowed by section 24 , to determine the application (other than because the application is withdrawn or the dispute between the claimant and respondent is otherwise resolved).
(a) if the adjudicator refuses to notify the parties of his or her determination until his or her fees or expenses are paid; or
(b) in other circumstances that are prescribed for the purposes of this paragraph.
38
Information in relation to determinations of adjudication applications
38 Information in relation to determinations of adjudication applications
(1) An adjudicator is to provide a copy of his or her determination of an adjudication application under section 25 to the nominating authority that referred the application to the adjudicator.
(2) A nominating authority to which a determination is provided under subsection (1) must forward a copy of the determination to the Security of Payments Official in the manner and form required by the Official.
(a) a report in respect of the operation of the Act in the previous calendar year; and
(b) details of the fees and expenses paid to adjudicators during the calendar year; and
(c) the recommendations, if any, of the Official, as to how this Act, or operations under this Act, could be improved.
Division 4
Protection from liability
Division 4 Protection from liability
39
Protection from liability
39 Protection from liability
(1) No action lies against the Security of Payments Official or any other person in relation to anything done or omitted to be done by a nominating authority in good faith –
(a) in performing the functions of the Security of Payments Official, or exercising the powers of the Security of Payments Official, under this Act; or
(b) in the reasonable belief that the thing was done or omitted to be done in the performance of the functions, or the exercise of the powers, of the Security of Payments Official under this Act.
(2) No action lies against a nominating authority or any other person in relation to anything done or omitted to be done by the nominating authority in good faith –
(a) in performing the functions of the authority, or exercising the powers of the authority, under this Act; or
(b) in the reasonable belief that the thing was done or omitted to be done in the performance of the functions, or the exercise of the powers, of the nominating authority under this Act.
(3) No action lies against an adjudicator in relation to anything done or omitted to be done by the adjudicator in good faith –
(a) in performing his or her functions, or exercising his or her powers, under this Act; or
(b) in the reasonable belief that the thing was done or omitted to be done in the performance of the adjudicator's functions, or the exercise of the adjudicator's powers, under this Act.
Part 8
Miscellaneous
Part 8 Miscellaneous
40
Service of notices
40 Service of notices
A notice or other document is effectively served under this Act if –
(a) in the case of a natural person, it is –
(i) given to the person; or
(ii) left at, or sent by post to, the person's postal or residential address or place or address of business or employment last known to the server of the notice or other document; or
(iii) faxed to the person's fax number; or
(iv) emailed to the person's email address, if the person has agreed to service by email; or
(v) delivered to the person by another electronic method, if the person has agreed to service by the method; and
(b) in the case of any other person, it is –
(i) left at, or sent by post to, the person's principal or registered office or principal place of business; or
(ii) faxed to the person's fax number; or
(iii) emailed to the person's email address, if the person has agreed to service by email; or
(iv) delivered to the person by another electronic method, if the person has agreed to service by the method.
41
Regulations
41 Regulations
(1) The Governor may make regulations for the purposes of this Act.
(2) The regulations may be made so as to apply differently according to the factors specified in the regulations.
(3) The regulations may –
(a) provide that a contravention of any of the regulations is an offence; and
(b) in respect of such an offence, provide for the imposition of a fine not exceeding 50 penalty units and, in the case of a continuing offence, a further fine not exceeding 10 penalty units for each day during which the offence continues.
(a) the administration of this Act is assigned to the Minister for Workplace Relations; and
(b) the department responsible to that Minister in relation to the administration of this Act is the Department of Justice.
44
Transitional matters
44 Transitional matters
(1) This Act does not apply to or in relation to a contract entered into before the commencement of this section.
(2) Despite the repeal of the Contractors' Debts Act 1939 by this Act, that Act continues to apply in respect of any attachment notice that is issued by a court before the day on which this section commences and to any payment into court of money pursuant to such a notice.
Sourced from Tasmanian Legislation Online (legislation.tas.gov.au), CC BY 4.0.
Part 1 Preliminary
Part 1 Preliminary
1 Short title
1 Short title
This Act may be cited as the Building and Construction Industry Security of Payment Act 2009 .
2 Commencement
2 Commencement
This Act commences on the day on which this Act receives the Royal Assent.
3 Object
3 Object
The object of this Act is to ensure that any person who undertakes to carry out building work or construction work (or who undertakes to supply building or construction-related goods and services) under a building or construction contract, including such a contract that relates to a residential structure, is entitled to receive, and is able to recover, progress payments in relation to the work or goods and services.
4 Interpretation
4 Interpretation
In this Act, unless the contrary intention appears –
adjudicated amount means the amount of a progress payment that an adjudicator determines to be payable under section 25 ;
adjudication application means an application made under section 21 ;
adjudication certificate means an adjudication certificate issued under section 26(4) ;
adjudication fees means fees or expenses charged by a nominating authority under section 32 or by an adjudicator under section 37 ;
adjudication response means a response lodged with an adjudicator under section 23 ;
adjudicator, in relation to an adjudication application, means a person who has accepted under section 22(4) a referral of the adjudication application;
building includes a proposed building or part of a building and a building that is able to be relocated;
Costs and burdens are concentrated and identifiable in the Act. Parties bear direct transactional costs: preparation and service of payment claims (s 17), preparation of payment schedules (s 18), payment of application fees to nominating authorities (s 21(5)(b), 32(2)), and adjudicator and nominating authority fees and expenses which are jointly and severally recoverable from the parties (ss 32(3), 37(3)). The Act also assigns operational tasks to public officers: authorisation and oversight of nominating authorities and collection of information for annual reporting by the Security of Payments Official (ss 30-33, 38(3)). Discretion and administrative capacity lie with the Security of Payments Official to authorise nominating authorities, impose conditions and request information (ss 30, 31, 33), which creates an implementation dependency on that office.
The statute limits defensive strategies available to respondents in courts once the statutory processes are used. In court proceedings to recover unpaid claimed or scheduled amounts, respondents are not entitled to bring cross‑claims or to raise defences relating to matters arising under, or relating to the subject matter of, the building or construction contract (ss 19(8), 20(5)). A respondent seeking to set aside a judgment obtained by filing an adjudication certificate is restricted in the defences it may raise (s 27(5)). Those procedural constraints reduce the scope for dilatory or offsetting litigation in the short term, while preserving the ability to seek restitution or different outcomes in subsequent court or tribunal proceedings (s 10(3)).
In summary, the Act mechanically implements a fast, debt‑oriented payment enforcement mechanism with short timeframes for response and payment, places financial and procedural burdens on both parties (including shared responsibility for fees), and creates administrative oversight roles with specified powers and reporting duties. Its stated policy objective is to secure progress payments for contractors and suppliers (s 3); the statute’s design favours quick interim remedies and places practical pressure on respondents to pay or engage promptly in adjudication.
Main concepts
The Act builds a compact of interlocking legal concepts; the most important appear in the definitions and operative Parts.
Progress payment, reference date and due date: The right to a progress payment arises on each reference date under the contract (s 12). The contract normally fixes how a progress payment’s amount is calculated (s 12(2)). Where the contract is silent, the Act provides valuation rules based on the value of work carried out or goods supplied up to the reference date (s 12(3), s 13). The due date for payment is the date the contract specifies, or, where no date is specified, the Act ties the due date to the applicable day associated with a payment claim (s 15).
Payment claim and payment schedule: The claimant starts the statutory process by serving a written payment claim with enumerated form requirements (s 17(2)). The respondent may respond by serving a payment schedule that identifies the scheduled amount and, if lower than the claimed amount, explains why (s 18). Time limits for providing a schedule are critical: 10 business days generally, extended to 20 business days in owner/occupier residential cases where the respondent is not a building practitioner (s 19(3)).
Consequences of non‑scheduling and non‑payment: If the respondent fails to provide a schedule within the relevant period, the respondent becomes liable to pay the claimed amount on the due date (s 19(2)). If a payment schedule is provided but the respondent fails to pay the scheduled amount, the claimant may seek recovery of the unpaid portion (s 20(2)). Both ss 19 and 20 allow the claimant to commence adjudication or court proceedings and to give statutory suspension notices (ss 19(5)(b), 20(2)(b), 26(2)(b), 29).
Adjudication scheme: The Act sets out a rapid adjudication structure. Claimants may apply to an authorised nominating authority for adjudication (s 21). A nominating authority must refer the application promptly to a qualified adjudicator (s 22). Adjudicators must determine applications quickly,generally within 10 business days of receiving the adjudication response or acceptance (s 24). Adjudicator determinations are limited in scope to the Act, the contract and the materials submitted (s 25(2)), and are to be given in writing with reasons unless both parties request otherwise (s 25(4)).
Enforcement mechanics: Adjudicated amounts are payable by respondents within 5 business days of service of the adjudicator’s determination (s 26(1)). A nominating authority may issue an adjudication certificate on request, and that certificate can be filed as a judgment for debt in a court (ss 26(4)-(5), 27(1)-(2)). A respondent applying to set aside such a judgment faces limits on available defences and must pay the unpaid part into court as security pending final determination (s 27(5)).
Suspension rights: Claimants have a statutory right to suspend work or supply after serving a notice of intention to do so and waiting at least 2 business days, and suspension cannot extend beyond three business days after receipt of payment (s 29).
Administration and oversight: The Security of Payments Official is the Director of Building Control unless otherwise appointed (s 30). The Official authorises nominating authorities for 3‑year periods, may impose conditions, and can request information (ss 31-33). Nominating authorities and adjudicators may charge fees; parties are jointly and severally liable for those amounts (ss 32(1)-(3), 37(1), 37(3)). Adjudicators and nominating authorities have good‑faith protections (s 39).
Interaction with other laws and limits: The Act applies to contracts whether written or oral and even where expressed to be governed by another jurisdiction’s law (s 7(1)). It does not, however, apply to work carried out outside the State except where supplied by a person in the State (s 7(2)-(3)), and it excludes certain contract types (s 7(5)-(7)). Parties cannot contract out of the Act; provisions that attempt to exclude, modify or deter action under the Act are void (s 11). The Act binds the Crown (s 8).
The Act also defines the scope of building work and building or construction‑related goods and services in broad terms (ss 5-6), listing many specific types of works and services and providing for prescribed inclusions and exclusions. These definitions drive who is covered and when the statutory process is available.
Who it affects
The Act’s coverage is broad but defined. Primary stakeholders are claimants and respondents under building or construction contracts, nominating authorities, adjudicators, the Security of Payments Official, and the courts.
Claimants: Any person who has undertaken to carry out building or construction work or supply building or construction‑related goods and services under a building or construction contract is a potential claimant entitled to progress payments on each reference date (s 12). The Act’s definition of building or construction work is deliberately wide, covering construction, alteration, demolition, installation of systems (including plumbing installations and fire safety systems), site works, prefabrication and associated services such as painting, decoration and cleaning in the course of construction (s 5(1)(a)-(d), (e)-(f)). Building or construction‑related goods and services include materials and plant, labour, professional design, surveying and inspection services (s 6(1)). The claimant role includes subcontractors, suppliers and professionals to the extent their work/goods fall within these definitions.
Respondents: Respondents are persons on whom payment claims are served (s 4, definition of respondent). The Act’s timelines and consequences apply to respondents who receive payment claims,these may be owners, head contractors, developers, or other contracting parties. Specific provisions recognise different timeframes for owner‑occupied residential projects where the respondent is the landowner and not a building practitioner (s 19(3)(a)).
Nominating authorities and adjudicators: The Act establishes an authorised nominating authority system. A person may apply to the Security of Payments Official to be authorised (s 31(1)-(2)); once authorised, a nominating authority is empowered to receive adjudication applications, refer them to qualified adjudicators (s 22), issue adjudication certificates (s 26(4)) and charge fees for services (s 32). Adjudicators must be qualified persons with the expertise required by the Security Official (s 22(2)) and are subject to disqualification for material personal interests (s 35). Adjudicators may charge fees and are jointly and severally owed by claimant and respondent (s 37).
Security of Payments Official and administrative agencies: The Director of Building Control is the Security of Payments Official by default (s 30(1)(a)), and the Official controls authorisation, conditions, oversight and information gathering (ss 30-33). The Official receives copies of determinations and submits an annual report to the Director of Building Control (s 38(1)-(3)). Until administrative arrangements change, the Act is assigned to the Minister for Workplace Relations and administered by the Department of Justice (s 43).
Courts and tribunals: The courts are affected both as enforcement venues and as tribunals with constrained roles. Adjudication certificates can be filed as judgments for debt and enforced as such (s 27). The Tasmanian Civil and Administrative Tribunal (TCAT) is specifically given a review role for certain administrative decisions under the Act, including reviews of Security Official decisions about nomination authorisations and adjudicator disqualification matters (ss 31(7), 36(4)-(6) as amended). Courts also must allow for amounts paid under Parts 4-7 when making orders in related litigation (s 10(3)).
Regulated exclusions and third parties: The Act excludes certain contracts and classes of contracts (s 7(5)-(8)), including parts of contracts forming part of loan agreements with recognised financial institutions (s 7(5)(a)), and contracts where consideration is calculated otherwise than by reference to the value of work or goods supplied (s 7(5)(b)). The Act also preserves third‑party priority rights where liens or charges existed before the progress payment became due (s 14(2)). A claimant does not obtain rights against a third party owner of unfixed materials (s 14(3)).
Employers and employees: The Act expressly does not apply to arrangements where a party carries out the work as an employee of the other party (s 7(6)), which excludes ordinary employment relationships from the statutory progress payment machinery.
Practical effect: the Act primarily affects businesses and individuals in the building and construction supply chain,contractors, subcontractors, suppliers and relevant professionals,by providing a statutory short‑term cashflow and dispute resolution mechanism. It also affects owners and head contractors who must respond to payment claims within tight timeframes or face statutory liabilities. Finally, administrative actors (Security Official, nominating authorities, adjudicators) assume defined roles with powers and reporting duties.
Key duties and rights
The Act allocates explicit duties and corresponding rights between parties and administrators. Below are the principal duties and rights with citations.
Right to progress payments and calculation duties: A claimant who has undertaken building or construction work, or the supply of construction‑related goods and services, is entitled to a progress payment on each reference date (s 12(1)). If the contract specifies how to calculate progress payments, that method governs (s 12(2)). Where the contract is silent, the Act prescribes valuation factors for work and goods, including contract price, rates, agreed variations and estimated rectification costs for defects (s 13(2), (4)).
Payment claim formalities and limitations: A claimant must serve a payment claim in writing containing specified information (s 17(2)): claimant name, identification of the work or goods, the claimed amount, statement that the claim is made under this Act and any prescribed details. A claimant must not serve more than one payment claim for each reference date (s 17(4)), although previous claimed amounts may be included in a later claim (s 17(5)). The timing for serving claims is governed by the contract or by the 12‑month fallback period after last carrying out the work or supplying the goods (s 17(6)).
Respondent’s duty to provide payment schedule: A respondent on whom a payment claim is served may provide a payment schedule identifying the scheduled amount and, if less than the claimed amount, specifying why (s 18(1)-(4)). The schedule must be provided within the contractually required payment period or before the applicable day defined by s 19(3) (s 19(2)). If no schedule is provided within the relevant period, the respondent becomes liable to pay the claimed amount (s 19(2)).
Adjudication rights and procedural duties: A claimant may apply for adjudication under certain conditions,where the scheduled amount is less, the scheduled amount is unpaid, or no schedule was provided and the claimed amount remains unpaid (s 21(2)). The application must be made to an authorised nominating authority and must identify the payment claim and schedule (if any), include the application fee and be served on the respondent (s 21(1), (5)-(7)). A respondent who provided a payment schedule may lodge an adjudication response within specified timeframes (s 23(1)-(2)), but must not include reasons for withholding payment unless those reasons were already in the payment schedule (s 23(4)). Adjudicators are required to determine applications quickly and may request further submissions and inspect matters relevant to the claim (s 24).
Payment obligation on adjudicator determination: If an adjudicator determines that a respondent must pay an adjudicated amount, the respondent must pay within 5 business days of service of the determination, or by a later date determined in the adjudicator’s determination (s 26(1)). If the respondent fails to pay, the claimant can request an adjudication certificate and pursue enforcement, or serve a notice of intention to suspend work or supply (s 26(2)).
Enforcement and court interaction duties: A nominating authority may issue an adjudication certificate that can be filed as a judgment for debt in a competent court (s 26(4), s 27(1)). An adjudication certificate filed as a judgment must be accompanied by an affidavit stating the unpaid part (s 27(3)), and if the respondent seeks to set aside the judgment, the respondent must pay the unpaid part into court as security pending final determination (s 27(5)(b)). In court proceedings, courts must allow for amounts paid under Parts 4-7 in any award or order and may make orders for restitution (s 10(3)).
Right to suspend and related duties: A claimant may suspend work or supply if at least 2 business days have passed since serving notice under ss 19, 20 or 26 of intention to suspend (s 29(1)). The claimant may not suspend after three business days following receipt of payment for the relevant amount (s 29(2)). If suspension causes the claimant to incur loss due to the respondent removing part of the work or supply, the respondent must pay that loss (s 29(3)). The claimant is not liable for loss or damage suffered by the respondent during the suspension period (s 29(4)).
Fee and cost obligations: Nominating authorities and adjudicators may charge fees and expenses (ss 32, 37). The claimant and respondent are jointly and severally liable for nominating authority charges and adjudicator fees and each liable in equal proportions unless the adjudicator determines otherwise (ss 32(3), 37(3)). An adjudicator may order a party to pay costs to another party for frivolous or vexatious conduct (s 25(7)).
Administrative duties and powers: The Security of Payments Official has duties to authorise nominating authorities, impose conditions and request information (ss 30-33). Nominating authorities must provide requested information and must notify the Official if aware of related court proceedings (ss 33-34). Adjudicators must forward determinations to the nominating authority, which in turn forwards determinations to the Security Official (s 38(1)-(2)).
Limits on contracting out and scope of Act: Parties cannot contract out of the Act; provisions purporting to exclude or deter action under the Act are void (s 11). The Act binds the Crown (s 8). The Act does not apply to certain contracts prescribed or described in s 7(5)-(8) and it does not apply to contracts entered into before commencement (s 44(1)).
These duties and rights form a regime designed for quick interim outcomes: claimants are given formal, rapid tools to obtain cashflow; respondents are obliged to respond quickly or face statutory liabilities; adjudicators and nominating authorities are given time‑bounded decision and administrative roles; and courts are used primarily as enforcement and, to some extent, review venues with constrained defences in the short term (ss 19(8), 20(5), 27(5)).
Penalties and enforcement
The Act relies principally on civil remedies and administrative controls rather than criminal sanctions. Enforcement and penalty mechanisms fall into several categories.
Civil enforcement of payment obligations: The core enforcement mechanism is the adjudicator’s determination and the short statutory payment window. Respondents must pay adjudicated amounts within 5 business days of service of the determination or by a later date specified in the determination (s 26(1)). If the respondent fails to pay, the claimant may request an adjudication certificate from the nominating authority (s 26(2)(a)). An adjudication certificate may be filed as a judgment for a debt in a court of competent jurisdiction and is enforceable as such (s 27(1)-(2)). The filing must be accompanied by an affidavit stating that a part of the adjudicated amount has not been paid (s 27(3)).
Court judgment and restricted defences: Once an adjudication certificate is filed and becomes a judgment, it is enforceable like any other judgment (s 27(2)). A respondent that commences proceedings to have such a judgment set aside is, in those proceedings, not entitled to bring a cross‑claim against the claimant, raise a defence in relation to matters arising under the contract, or challenge the adjudicator’s determination (s 27(5)(a)(i)-(iii)). The respondent must pay the unpaid part of the adjudicated amount into court as security pending final determination of those proceedings (s 27(5)(b)). In other contractual litigation arising under the contract, courts must allow for amounts paid under Parts 4-7 when making awards and may order restitution (s 10(3)).
Recovery by debt action and adjudication: Where a respondent does not timely provide a payment schedule, the claimant may apply to a court to recover the unpaid part of the claimed amount as a debt (s 19(5)(a)(i)). Similarly, where a respondent fails to pay the scheduled amount, the claimant may seek to recover the unpaid part by court action (s 20(2)(a)(i)). Courts may give judgment if satisfied the respondent is liable under s 19(2) or s 20(2) and has not paid by the due date (ss 19(7), 20(4)).
Suspension remedy as an enforcement lever: Claimants are able to suspend carrying out work or supplying goods and services after giving statutory notice and waiting at least 2 business days (s 29(1)-(2)). Suspension is a non‑judicial enforcement measure; if suspension results in loss because the respondent removes part of the work or supply from the contract, the respondent is liable to pay that loss to the claimant (s 29(3)). The claimant is insulated from liability for loss or damage suffered by the respondent during the suspension (s 29(4)).
Costs and fee obligations: Adjudicators may order costs against a party for frivolous or vexatious conduct or unfounded submissions (s 25(7)). Nominating authorities and adjudicators may charge fees for services provided, and the parties are jointly and severally liable for those amounts (ss 32(1)-(3), 37(1), (3)). Adjudicators are not entitled to fees if they fail to determine an application within the statutory time limits (s 37(4)), which creates a financial incentive on adjudicators to meet timeframes.
Administrative sanctions and oversight: The Security of Payments Official may refuse to authorise a person as a nominating authority, impose conditions on authorisations, and revoke authorisation where the authority has failed to comply with requests or conditions or otherwise failed to meet the Act’s requirements (s 31(2), (4), (6)). Decisions by the Security Official to refuse authorisation, or to impose or vary conditions, may be reviewed by the Tasmanian Civil and Administrative Tribunal (s 31(7)).
Regulatory penalties: The Act delegates power to make regulations (s 41). The regulations may create offences and prescribe fines up to 50 penalty units and additional daily fines for continuing offences up to 10 penalty units per day (s 41(3)). The Act itself does not specify criminal penalties for most breaches; instead it focuses on civil enforcement routes and administrative authorisation/conditioning.
Protections for officials and decision‑makers: The Act provides statutory immunity for the Security Official, nominating authorities and adjudicators for acts done in good faith in performing functions or exercising powers under the Act (s 39). That immunity reduces the risk of civil suits against administrators and decision‑makers for bona fide performance of duties.
Effect on civil proceedings and limits on defences: The Act constrains respondents’ procedural options in court proceedings that arise under the contract or relate to payment claims (ss 19(8), 20(5), 27(5)). However, the Act expressly does not limit other entitlements or remedies a claimant may have under a contract (s 9) and preserves courts’ abilities to make orders for restitution in subsequent proceedings (s 10(3)).
Overall, enforcement under the Act is driven by swift adjudication and conversion of adjudication outcomes into debt judgments for enforcement, supplemented by a suspension remedy and administrative authorisation mechanisms for nominating authorities. Criminal penalties are left to regulation rather than primary statute.
How it interacts with other laws
The Act is drafted to operate within an existing legal framework and expressly connects to other legislation and institutions.
General primacy and non‑contracting out: The Act has overriding effect over inconsistent contractual provisions; a contract clause that excludes, modifies or restricts the operation of the Act is void (s 11). The Act also binds the Crown in right of Tasmania (s 8). These features make the Act a statutory rule that cannot be contracted away by private parties.
Choice of law and extraterritorial supply: The Act applies to any building or construction contract even if it is expressed to be governed by the law of another jurisdiction (s 7(1)(c)). However, the Act does not apply to the extent the work is performed outside the State (s 7(2)). A specific carve‑in exists: the Act applies where building or construction‑related goods or services are supplied by a person in the State even if the work is carried out outside the State (s 7(3)), although the Act does not entitle a person to payment if the same claim has been made under the law of another jurisdiction (s 7(4)).
Interaction with financial institutions and certain contract types: The Act excludes from its operation parts of contracts that form part of loan agreements, guarantees or insurance where a recognised financial institution is the party lending or providing guarantee/indemnity (s 7(5)(a)). It also excludes contracts where consideration is agreed to be calculated otherwise than by reference to the value of the work or goods (s 7(5)(b)). These carve‑outs preserve the special status of regulated financial arrangements and non‑value based payment structures.
Reference to other statutory instruments and definitions: The Act incorporates or cross‑refers to other legislation and instruments. For example, the Building Code of Australia definition is referenced in s 4 for defining a residential structure. Interest on overdue progress payments is set at the rate prescribed under the Supreme Court Civil Procedure Act 1932 or the contract rate, whichever is greater (s 15(3)). The Security of Payments Official reports to the Director of Building Control under the Building Act 2016 (s 38(3)). Service, holidays and business day concepts are consistent with the Statutory Holidays Act 2000 per s 4A.
Adjudication and tribunal review: The Act limits subject‑matter scope for adjudicators (s 25(2)) and places procedural constraints on what respondents may raise in court when jurisdictions are intermixed (ss 19(8), 20(5), 27(5)). Administrative decisions under the Act (for example, authorisation of nominating authorities and some adjudicator disqualification decisions) are reviewable by the Tasmanian Civil and Administrative Tribunal in specified circumstances (ss 31(7), 36(4), 36(6)). This creates an interface between the statute’s speedy adjudication process and the tribunal review system.
Repeals and transitional arrangements: The Act repeals earlier legislation specified in Schedule 2, including the Contractors’ Debts Act 1939 (Schedule 2). Transitional provisions preserve the continued application of the repealed Contractors’ Debts Act 1939 to attachment notices or payments into court issued before commencement (s 44(2)). The Act also does not apply to contracts entered into before commencement of the section (s 44(1)). These transitional measures mitigate sudden loss of pre‑existing remedies.
Regulatory delegation: The Governor may make regulations for the Act and those regulations may create offences and fines (s 41). That allows the legislature to allocate certain detailed obligations to subordinate instruments and set administrative penalties.
Administrative assignment: Until orders under the Administrative Arrangements Act 1990 are made, the Act is administered by the Minister for Workplace Relations and the Department of Justice (s 43). This situates the Act within the State administrative architecture and clarifies lines for reporting and responsibility.
Preservation of other entitlements: The Act expressly does not limit other entitlements or remedies available to claimants under a contract (s 9). Part 4-7 procedures will coexist with contractual rights and ordinary civil relief, but the Act narrows procedural options in certain short‑term enforcement contexts (see ss 10(3), 19(8), 20(5), 27(5)).
Taken together, the Act is designed to operate alongside the civil justice system and other building and financial regulatory regimes, privileging quick statutory remedies for progress payments while preserving certain interactions and limits with other laws.
Amendment history
The text includes in‑line amendment annotations identifying several statutory modifications and insertions with dates and amending instruments. The Act as presented shows the following recorded amendments and consequential items in the source text:
Insertion of section 4A (Interpretation of "business day"): s 4A was inserted by No. 13 of 2012, s 10, applied 30 May 2012. This defines the term "business day" for the Act and ties specified holidays to the Statutory Holidays Act 2000 (see s 4A and its marginal note).
Amendments to section 4: Section 4 includes amendment annotations indicating it was amended by No. 20 of 2013, s 22, applied 20 Jun 2013; and by No. 38 of 2015, s 22, applied 13 Oct 2015. Those annotations appear adjacent to the definitions of Building Code of Australia and other defined terms in s 4, indicating targeted updates to definitions within that section.
Amendments to section 19: Section 19 contains an annotation showing that subsection (1) was amended by No. 12 of 2016, Schedule 1, applied 01 Jan 2017; and subsection (2) has an earlier amendment by No. 13 of 2012, s 11, applied 30 May 2012. These amendments relate to definitions used in s 19 and the time periods and consequences for failing to provide payment schedules.
Amendments to sections in 2025: Several provisions bear annotations that they were amended by No. 7 of 2025, applied 01 Jul 2025. Specifically:
s 31(7) (review rights in respect of Security of Payments Official decisions) has been amended by No. 7 of 2025, s 37, applied 01 Jul 2025.
s 36(4) (tribunal review for adjudicator disqualification action) was amended by No. 7 of 2025, s 38, applied 01 Jul 2025.
s 36(6) (scope limits on tribunal review) similarly contains an annotation to No. 7 of 2025, s 38, applied 01 Jul 2025.
s 37(2) (costs consequences in tribunal review contexts) was amended by No. 7 of 2025, s 39, applied 01 Jul 2025.
Amendment to s 38(3): Section 38(3) contains an annotation referring to No. 12 of 2016, Schedule 1, applied 01 Jan 2017, which prescribes the Security Official’s reporting obligations (annual report by 1 March to the Director of Building Control).
Schedule and repeal entries: The Act includes Schedules 1 and 2. Schedule 2 lists the Contractors’ Debts Act 1939 (No. 49 of 1939) as repealed (see s 46 and Schedule 2). Schedule 1 references the Judicial Review Act 2000 as a consequential amendment (s 45 pointing to Schedule 1).
Transitional provisions: Section 44 contains transitional matters. Notably, s 44(1) provides that the Act does not apply to or in relation to a contract entered into before the commencement of that section. Section 44(2) preserves the application of the Contractors’ Debts Act 1939 for attachment notices issued before commencement despite its repeal.
The annotations in the text identify the amending Acts and application dates, but the source text does not include the full amending instruments’ texts or the detailed policy rationales behind each amendment. Where the Act records that a subsection was "amended by" a later Act, the present text should be read as the consolidated version reflecting those amendments. For practitioners, the annotations are useful to trace the legislative timeline and to locate the amending instruments for the detailed amendment history.
Litigation history
The Act text itself does not list judicial decisions or case law. It sets out procedural and review routes that will shape how litigation and tribunal review typically unfold, and it limits the scope of defences available in certain court settings. The text therefore only provides the statutory architecture through which litigation is likely to occur; it does not include reported judgments.
Key litigation‑relevant provisions in the statute that practitioners must note are:
Limited defences and cross‑claims in court proceedings: A respondent in proceedings under s 19 or s 20 is not entitled to bring a cross‑claim against the claimant or to raise defences in relation to the matters arising under the contract (ss 19(8), 20(5)). Similarly, a respondent commencing proceedings to set aside a judgment entered by filing an adjudication certificate is not entitled, in those proceedings, to bring a cross‑claim, to raise a defence relating to the contract, or to challenge the adjudicator’s determination (s 27(5)(a)). Those statutory limits alter the scope of ordinary litigation in the immediate enforcement context.
Adjudication certificates as judgments: Adjudication certificates can be filed as judgments (s 27(1)-(2)). Filing requires an affidavit stating unpaid parts (s 27(3)). If a respondent seeks to set aside such a judgment, the respondent must pay the unpaid part into court as security pending the final determination (s 27(5)(b)). This provides an expedited enforcement route that will surface in litigation practice.
Review mechanisms and tribunal pathways: The Act creates rights of review to the Tasmanian Civil and Administrative Tribunal for specific administrative decisions. For example, a person may apply to TCAT for review of a decision by the Security of Payments Official to refuse to authorise, or to impose or vary a condition on an authorisation to be a nominating authority (s 31(7)). Section 36(4) allows a party to apply to TCAT for review of an adjudicator’s refusal to take the actions specified in s 35(2) (disqualification actions), and s 36(6) limits the scope of such a review to the grounds provided to the adjudicator under s 36(2). These provisions frame how administrative personnel and adjudicators’ actions may be litigated or reviewed.
Interaction with later court decisions: Although the Act does not list cases, it structures judicial involvement. Courts must allow for the amounts paid to parties under Parts 4-7 in any award or order (s 10(3)). The Act leaves open full judicial consideration of underlying contract rights in subsequent proceedings, subject to the procedural constraints noted above. The statute therefore sets the pathway for early, interim enforcement through adjudication and leaves final determination of contractual disputes to later litigation or proceedings.
Because the Act itself contains no reported decisions, practitioners will need to consult case law externally to see how courts and tribunals have interpreted specific provisions such as the scope of "building work" (s 5), the valuation rules (s 13), time limits for claims and responses (ss 17, 19, 21), limits on evidence before adjudicators (s 25(2)), and the circumstances in which a court will set aside an adjudication judgment (s 27(5)). The procedural constraints the Act imposes on defendants in enforcement proceedings (ss 19(8), 20(5), 27(5)) are statutory and will be key interpretive subjects in litigation.
In short, the Act provides the statutory pathway and limitations that will be the subject of litigation, but the Act text does not itself record litigation outcomes or precedent. Practitioners should map adjudication processes, certificate filing and the limited judicial defences supplied by the statute against the developing case law to assess the prospects of enforcement and of later substantive challenge.
Gotchas
The Act contains numerous technical traps for the unwary. These are points where small errors in procedure or timing, or misunderstandings of scope, can produce significant legal and commercial consequences.
Time limits are short and framed by “business days”: Several deadlines are business‑day based, which the Act defines expressly in s 4A. For example, respondents generally have 10 business days to provide a payment schedule after service of a payment claim, but owner‑occupied residential projects where the respondent is the landowner and is not a building practitioner attract a 20‑business‑day period (s 19(3)). Adjudicators must determine applications within 10 business days after receiving an adjudication response or acceptance (s 24(1)). Adjudicated amounts are payable within 5 business days after service of the adjudicator’s determination (s 26(1)). Missing business‑day calculations can convert a procedural victory into a statutory liability.
Formal requirements for payment claims and limits on duplication: A payment claim must be in writing and must include specific content (s 17(2)). A claimant must not serve more than one payment claim for each reference date (s 17(4)), although it can include amounts from previous claims (s 17(5)). Failure to comply with formalities may be fatal to an adjudication application or reduce remedial options.
Pay‑when‑paid clauses are ineffective: Contract clauses that make payment contingent on the payer being paid by another party are void as “pay‑when‑paid” provisions (s 16). Parties relying on such clauses for cashflow management will not be able to rely on them under this Act.
Adjudicator’s limited review scope: Adjudicators may only consider the Act, the building or construction contract, the payment claim and schedule and submissions and inspections (s 25(2)). Broader contract disputes or third‑party claims are not the proper subject of adjudication. Parties that attempt to expand the adjudicator’s remit may risk adverse procedural rulings.
Restriction on defences in enforcement proceedings: If a claimant proceeds under s 19 or s 20 to recover unpaid amounts, a respondent cannot bring cross‑claims or raise defences relating to the contract’s subject matter in those proceedings (ss 19(8), 20(5)). Similarly, a respondent seeking to set aside a judgment obtained from an adjudication certificate is limited in defences and must pay unpaid sums into court as security pending resolution (s 27(5)). These constraints can surprise respondents who expect to litigate offsets or counterclaims immediately.
Joint and several liability for fees: Nominating authority charges and adjudicator fees are recoverable from claimant and respondent as joint and several liabilities (ss 32(3), 37(3)). Parties should be cautious about fee exposure and the possibility of contribution disputes if one party pays the fee and fails to recover it later.
Adjudicator disqualification and replacement: An adjudicator who has a material personal interest is disqualified and any decision of a disqualified adjudicator is void (s 35(1), (4)). If an adjudicator realises that they are disqualified, they must cease dealing with the application and notify the parties and nominating authority (s 35(2)-(3)). The nominating authority must refer the application to another adjudicator and may not charge for the referral (s 35(6)-(8)). Parties relying on an adjudicator’s decision should check disqualification risk early because previous responses to a disqualified adjudicator may be of no effect (s 35(7)).
Adjudicator fees withheld if timeframes missed: An adjudicator who fails to determine an application within the time allowed is not entitled to fees or expenses, unless the failure is for specific prescribed reasons (s 37(4)-(5)). This creates an incentive to meet timeframes but can complicate budgeting for adjudicator services.
Suspension rights are narrow and tied to notices: To suspend work a claimant must serve notice under the relevant sections and wait at least 2 business days (s 29(1)). Suspension cannot be continued beyond three business days after payment is received for the amount in issue (s 29(2)). Mistiming a suspension notice or failing to meet notice requirements can expose a claimant to contractual claims, even though s 29(4) provides some protection from liability for respondent losses during suspension.
Lien limitations and priority: A claimant’s lien applies only to unfixed plant or materials supplied by the claimant and does not create rights against third‑party owners of those materials (s 14(1), (3)). Existing liens or charges that predate the due date take priority over a claimant’s lien (s 14(2)). Practitioners must check title and third‑party interests before relying on a lien.
Service and electronic communication: Service by email or other electronic methods is effective only if the recipient has agreed to that method (s 40). Failure to secure agreement to electronic service can delay processes. The Act also lists conventional methods that remain valid (personal service, post, fax where available).
Scope exclusions and employment relationships: The Act excludes work types and contract forms by prescription (s 5(2), s 6(2), s 7(8)) and excludes employees performing work under the contract (s 7(6)). Mischaracterising a relationship as an independent contractor when it is an employment relationship may mean the Act does not apply.
Transitional and commencement caveats: The Act does not apply to contracts entered into before commencement of s 44 (s 44(1)). It also preserves application of the repealed Contractors’ Debts Act 1939 to attachment notices issued before commencement (s 44(2)). Parties dealing with older contracts must confirm the applicable statutory regime.
Tribunal review scope is narrow: Reviews to the Tasmanian Civil and Administrative Tribunal are limited in scope to grounds already provided to an adjudicator on disqualification and to specific administrative decisions (s 36(6), s 31(7)). Overreliance on broad tribunal review may be misplaced.
Each of these points is grounded in the Act’s text and can materially affect commercial outcomes. Practitioners should map claim and response deadlines, service methods, fee liabilities and adjudicator qualification and disqualification checks into contract administration processes to avoid these traps.
How to comply
Below is a practical compliance roadmap for both claimants (contractors, subcontractors, suppliers) and respondents (owners, head contractors, developers), grounded in the Act’s provisions.
Claimants , steps to preserve rights and prepare enforcement:
Confirm coverage: Verify that the contract work or supplied goods/services fall within the Act’s definitions,consult ss 5-6 for building or construction work and building or construction‑related goods and services. Check that the contract was entered into after commencement (s 44(1)) and is not excluded by s 7(5)-(8).
Identify reference dates and valuation method: Determine the contract’s reference date(s) and whether the contract specifies how progress payments are calculated (s 12(1)-(3)). If the contract is silent, apply the valuation criteria in s 13.
Prepare compliant payment claims: Serve payment claims that meet s 17(2) , in writing, addressed to the respondent, stating claimant’s name, identifying the work/goods in sufficient detail, specifying the amount claimed, stating that the claim is made under this Act, and including any prescribed details. Only one payment claim per reference date is permitted (s 17(4)), though amounts previously claimed may be included (s 17(5)).
Track time limits for serving claims: Serve payment claims within the contractual period or within 12 months after the last carrying out of work or supply (s 17(6)). Use the business‑day definition in s 4A to calculate timeframes.
If the respondent does not schedule or underpays, use statutory remedies: If the respondent fails to provide a payment schedule in time, the respondent becomes liable to pay the claimed amount (s 19(2)). If the respondent provides a schedule but fails to pay the scheduled amount, you may recover the unpaid part by court action or adjudication (s 20(2)). In both situations you may serve the 2‑business‑day suspension notice and, after that period, suspend work if unpaid (ss 19(5)(b), 20(2)(b), 29(1)).
Adjudication procedure: If adjudication is required, follow s 21: select an authorised nominating authority (confirmed via the Security Official’s authorisations under s 31), prepare an adjudication application identifying the relevant payment claim and payment schedule (if any), pay the application fee set by the nominating authority (s 21(5)(b), 32(2)), and serve a copy on the respondent (s 21(7)). Observe the application deadlines in s 21(3)-(4).
Seek adjudicator determination and enforcement: If the adjudicator determines an amount payable and the respondent does not pay within 5 business days of service (s 26(1)), request the nominating authority to issue an adjudication certificate (s 26(2)(a), (4)). File the adjudication certificate as a judgment with an affidavit stating the unpaid part (s 27(1)-(3)) and enforce the judgment.
Recordkeeping and evidence: Compile submissions, contracts, invoices, variations and inspection evidence because adjudicators consider only the contract, the payment claim and schedule and submitted documentation (s 25(2)). Keep contemporaneous service records per s 40 for proof of service.
Respondents , steps to avoid automatic liability and to preserve defences:
Check coverage and timeframes: Determine whether the Act applies to the contract or portion of the work (s 7), including any exclusions. Calculate the applicable day to respond using s 19(3) and the definition of “business day” in s 4A.
[Section 4 Amended by No. 38 of 2015, s. 22, Applied:13 Oct 2015]Building Code of Australia means the code produced by the Australian Building Codes Board relating to the design and construction of buildings;
building or construction contract means a contract, or other arrangement, under which one party undertakes to carry out building work or construction work for, or to supply building or construction-related goods and services to, another party;
building or construction-related goods and services has the meaning it has in section 6 ;
building work or construction work has the meaning it has in section 5 ;
[Section 4 Amended by No. 20 of 2013, s. 22, Applied:20 Jun 2013]
claimant means a person by whom a payment claim is served under section 17 ;
claimed amount means –
(a) an amount of a progress payment claimed, in accordance with section 17 , in a payment claim, to be due for building work or construction work carried out or for building or construction-related goods and services supplied; or
(b) any other amount specified in the payment claim in accordance with section 17(3) ;
due date, in relation to a progress payment, means the due date for the progress payment as determined in accordance with section 15 ;
fire safety system includes any one or more of the following:
(a) booster assemblies;
(b) fire mains, hydrants and hose reels;
(c) sprinklers;
(d) fire and smoke alarms;
(e) fire control centres;
(f) [Section 4 Amended by No. 38 of 2015, s. 22, Applied:13 Oct 2015] structures or devices to mitigate the fire hazard in respect of special fire hazard buildings within the meaning of the Building Regulations 2014 ;
(g) stairwell pressurisation;
(h) air-handling systems;
(i) smoke and heat vents;
nominating authority means a person who is authorised to be a nominating authority under section 31(2) ;
payment claim means a claim made under section 17 ;
payment schedule means a payment schedule provided to a claimant under section 18 ;
plumbing installation means –
(a) a system of water supply; or
(b) a system of sewage or sullage drainage or disposal; or
(c) a system of stormwater drainage, roof drainage or trade waste; or
(d) an on-site waste water management system;
progress payment means a progress payment to which a person is entitled under section 12 and includes –
(a) the final payment for building work or construction work carried out, or for building or construction-related goods and services supplied, under a building or construction contract; and
(b) a single or one-off payment for carrying out building work or construction work, or supplying building or construction-related goods and services, under a building or construction contract; and
(c) a payment that is based on an event or date;
recognised financial institution means –
(a) an authorised deposit-taking institution; or
(b) a "body regulated by APRA" within the meaning of the Australian Prudential Regulation Authority Act 1998 of the Commonwealth; or
(c) a prescribed person or body, or a member of a prescribed type of persons or bodies;
reference date, in relation to a building or construction contract, means –
(a) a date determined by, or in accordance with, the terms of the contract as the date on which a claim for a progress payment may be made in relation to –
(i) work carried out, or undertaken to be carried out, under the contract; or
(ii) building or construction-related goods and services supplied, or undertaken to be supplied, under the contract; or
(b) if the contract does not expressly provide for such a date, the last day of each month in which –
(i) building work or construction work is carried out under the contract; or
(ii) building or construction-related goods and services are supplied under the contract;
residential structure means a building or structure that is a class 1 or a class 10 building or structure within the meaning of the Building Code of Australia, as in force from time to time;
respondent means a person on whom a payment claim is served under section 17 ;
road infrastructure means –
(a) any land that is to be used as a road (whether public or private); or
(b) any land that is to be used as a footpath, bike path or public thoroughfare for pedestrians or vehicles; or
(c) any structures or works that are associated with, or co-located with, such a road, path or thoroughfare, including –
(i) kerbing, guttering, roundabouts, median strips and barriers; and
(ii) parking places or facilities; and
(iii) bridges, viaducts and tunnels; and
(iv) other works carried out in, on, under or over a road, path or thoroughfare;
scheduled amount means the amount of a progress payment that is proposed to be made under a payment schedule;
Security of Payments Official means the person who, in accordance with section 30 , is the Security of Payments Official;
structure includes a proposed structure, part of a structure and a temporary structure;
temporary structure includes any –
(a) booth, tent or other temporary enclosure, whether or not a part of the booth, tent or enclosure is permanent; and
(b) temporary seating structure; and
(c) stage, platform, or tower, that is temporary; and
(d) temporary bridge; and
(e) structure that does not form part of the land and is temporary; and
(f) structure of a prescribed type.
4A Interpretation of business day
4A Interpretation of business day
[Section 4A Inserted by No. 13 of 2012, s. 10, Applied:30 May 2012]
(1) In this Act, unless the contrary intention appears –
business day means any day other than –
(a) a Saturday or Sunday; or
(b) a day specified in section 4 of the Statutory Holidays Act 2000 ; or
(c) a day specified in Part 1 of Schedule 1 to the Statutory Holidays Act 2000 ; or
(d) a day specified in Part 1 or 2 of Schedule 2 to the Statutory Holidays Act 2000 ; or
(e) the 27th, 28th, 29th, 30th or 31st of December.
(2) For the purposes of the definition of business day in subsection (1) , a day referred to in that definition is a holiday for all of the day and in the whole of the State.
5 Meaning of building work or construction work
5 Meaning of building work or construction work
(1) For the purposes of this Act, building work or construction work means any of the following:
(a) the construction, erection, re-erection, alteration, repair, restoration, maintenance, extension, adding to, underpinning, removal, demolition, or dismantling, of –
(i) buildings; or
(ii) structures that form, or are to form, part of land;
(b) the construction, alteration, repair, restoration, maintenance, extension, removal, demolition or dismantling of works that form, or are to form, part of land, including –
(i) walls; and
(ii) road infrastructure; and
(iii) energy infrastructure and telecommunications facilities; and
(iv) aviation landing facilities and railway infrastructure; and
(v) marine infrastructure, water and sewerage infrastructure, drainage infrastructure, dams and canals and installations for the purposes of irrigation, land drainage or coast or river protection; and
(vi) structures, such as poles, wires and netting, erected to support or protect agricultural, horticultural or forestry products; and
(vii) structures (other than underground structures constructed to enable access to minerals) to enable persons to gain access to places on which agricultural, horticultural, forestry, tourist or mining activities are being, or are to be, carried out;
(c) the installation or alteration in, or removal from, any building, structure or works, of systems, and services, that form, or are to form, part of land, including –
(i) heating, ventilation, air-conditioning and cooling systems; and
(ii) power supply, lighting and communication systems; and
(iii) passenger lifts and goods lifts; and
(iv) plumbing installations; and
(v) fire safety systems and security systems;
(d) any operation that forms an integral part of, is preparatory to, or completes, work referred to in paragraph (a) , (b) or (c) , including –
(i) site clearance, earth-moving, excavation, tunnelling, boring and filling; and
(ii) the preparation of foundations; and
(iii) the erection, maintenance or dismantling of plant and equipment; and
(iv) the prefabrication of components to form part of any building, structure or works, whether the prefabrication is carried out on-site or off-site; and
(v) site restoration, landscaping and the provision of road infrastructure and other works to enable access to land or a part of land;
(e) the internal or external cleaning of buildings, structures, or works, that is carried out in the course of the construction, alteration, repair, restoration, maintenance, extension, removal, demolition or dismantling of the buildings, structure or works;
(f) the painting or decoration of the internal or external surfaces of any building, structure or works;
(g) other work of a type prescribed to be a type of building work or construction work for the purposes of this Act.
(2) Despite subsection (1) , the following work is not building work or construction work for the purposes of this Act:
(a) the drilling for, or extraction of, oil or natural gas;
(b) the extraction (whether by underground or surface working) of minerals, including tunnelling or boring, or the construction of underground works for the purpose of such extraction;
(c) other work of a type prescribed to not be building work or construction work for the purposes of this Act.
6 Meaning of building or construction-related goods and services
6 Meaning of building or construction-related goods and services
(1) For the purposes of this Act, building or construction-related goods and services, in relation to building work or construction work, means any of the following:
(a) goods of the following kind:
(i) materials and components that are to form part of any building, structure or work arising from building work or construction work;
(ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of building work or construction work;
(b) services of the following kind:
(i) the provision of labour to carry out building work or construction work;
(ii) architectural, design, land surveying, quantity surveying, engineering, building surveying or project management services in relation to building work or construction work;
(iii) inspection, reporting, or advisory, services provided in respect of buildings, building systems and services, energy and sustainability systems and services, geotechnical, engineering, interior decoration, exterior decoration or landscape services provided in relation to building work or construction work;
(c) goods and services of a type prescribed to be a type of building or construction-related goods and services for the purposes of this Act.
(2) Despite subsection (1) , "building or construction-related goods and services" does not include goods or services of a type that is prescribed to not be building or construction-related goods and services for the purposes of this Act.
(3) A reference in this Act to building or construction-related goods and services is to be taken to be a reference to building or construction-related goods, building or construction-related services, or both.
Part 2 Application and Effect of Act in Relation to other Acts, Contracts, &c.
Part 2 Application and Effect of Act in Relation to other Acts, Contracts, &c.
7 Ap
This is an opening excerpt, not the complete document.