Brand, M C and Davenport, P (2012) Adjudication in Australia: An analysis of the amendments introduced by the building and construction industry Security of Payment Amendment Act 2010 (NSW). International Journal of Law in the Built Environment, 4(3), pp. 189-202. ISSN 1756-1469
Abstract
Purpose: The purpose of this paper is threefold; first, to give a background to the security of payment problem in the New South Wales construction industry and the problem giving rise to the Building and Construction Industry Security of Payment Amendment Act 2010 (NSW) ("2010 Amendment Act"); second, to provide an analysis of the operation of the 2010 Amendment Act; and finally, to address the main implications of the amendments for the three parties involved, namely the claimant, the respondent and the "Principal contractor". Design/methodology/approach: A review of the relevant literature was undertaken on the security of payment problem in the NSW construction industry and the problem giving rise to the 2010 Amendment Act. A "black-letter" approach is adopted to analyse and explain the provisions contained in the 2010 Amendment Act. At the time of writing, no case law relevant to the amendments had been published. Findings: The amendments brought about by the 2010 Amendment Act add appreciably to the scope of the Building and Construction Industry Security of Payment Act 1999 (NSW). The effect of the procedure under the 2010 Amendment Act is similar to that under the Contractors Debts Act 1997 (NSW). The 2010 Amendment Act enables a claimant to "freeze" money in the hands of the Principal contractor pending an adjudication, thereby increasing the chance of recovery of the adjudicated amount by the claimant. If, under this new procedure, the Principal contractor fails to "freeze" the monies, the Principal contractor will be liable (along with the respondent) for the amount owed to the claimant. There is a potential for the amendments to be used unfairly by claimants to coerce settlement of unmeritorious payment claims. Originality/value: The analysis of the 2010 Amendment Act presented in this paper may be of interest in international jurisdictions where statutory adjudication for the construction industry has been introduced or is being contemplated.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | 2010 amendments; adjudication; Australia; construction industry; laws; New South Wales; security of payment |
| Index terms: | security of payment, construction industry, case law, statutory adjudication, adjudication, recovery, Australia, methodology, New South Wales, principal contractor, jurisdiction |
| Subjects: | research methods, Geography, warranties, industry analysis, practitioner, dispute resolution, operations management, legal systems |
| Topics: | Legal Issues, Contract Administration, Project Management, Geographical Context, Research Practice, Roles and Professions |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here