Analysis of Building and Construction Industry Security of Payment

This essay provides a comprehensive analysis of the Building and Construction Industry Security of Payment Act 1999 (NSW), addressing its functionality, reasons for introduction, its interaction with regular court actions, and recent amendments concerning subcontractor rights. It examines the Act's role in securing progress payments within the construction industry, its rapid adjudication procedures, and its impact on resolving payment disputes. The essay also discusses amendments made to protect subcontractors, offering fair payment terms and holding main contractors accountable. The conclusion highlights the Act's success in supporting the construction industry by providing obligations and privileges to progress payments, and ensuring the sustenance of the construction industry.

Running head: ESSAY 0
Building Law
AUGUST 31, 2018
STUDENT DETAILS:

ESSAY 1
Introduction
In present time, Australia is facing two major challenges or issues, deficiency of institutional
investment and fact that shape to rent assets have not matured in liquid market place. These
assets cannot be traded as commercial office building or other assets. These problems cannot
be overcome. The Building and Construction Industry Security of Payment Act 1999 is
applicable to agreements regarding creation whether oral contract or written contract, or
partly written or partly oral. It is also applicable if agreement is stated to be administered by
law of jurisdiction other than NSW. However, Building and Construction Industry Security of
Payment Act 1999 is not applicable on the contract forming law agreement, the gurantee
contract, or an insurance contract. The property council of New South Wales supports the
build-to-rent housing as process of giving citizens of New South Wales with good and more
accommodation options. Build-to-rent is a way, which offers more accommodation options. It
also offers professional building management and the preservation services.
In this essay, work of the Building and Construction Industry Security of Payment Act 1999
and property council of NSW is discussed and examined.
How does the Act work?
The Building and Construction Industry Security of Payment Act 1999 enables payments for
construction work. The main aim of the Building and Construction Industry Security of
Payment Act 1999 is to make sure that an individual who commences to conduct the work of
construction as per the construction related contract, is permitted to take, and is capable to
improve the payment regarding conducting work and delivering of goods and amenities. For
achieving this aim, the Building and Construction Industry Security of Payment Act 1999 has
announced new permissible privileges for the applicants like right to progress payment,
previlage to awareness on delay payments, right to lien, and the right to interrupt work. The

ESSAY 2
Building and Construction Industry Security of Payment Act 1999 (NSW) also delivers
invalid payment when remunerated clauses in agreements associated to construction (Dai, et.
al, 2016).
The Building and Construction Industry Security of Payment Act 1999 (New South Wales)
also addresses exclusive form of rapid settlement to deal with quarrels overdue progress
payment, where a self-regulating arbitrator creates an interim purpose as to sum of progress
payment to be made to applicant by member. Only an applicant may take initiate the
settlement procedure. However, both the parties can make the application to the adjudicator.
The Authorised Nominating Authority can appoint an arbitrator. The Building and
Construction Industry Security of Payment Act 1999 (NSW) changed that this makes able
sub-contractor to create entitlements for the progress payment. The Building and
Construction Industry Security of Payment Act 1999 (New South Wales) also makes able the
sub-contractor to attain quickly, cheaply and without the order of court what a supplement
order as per Contractors Debts Act 1997 (New South Wales) attained before (Davenport,
2010). The Building and Construction Industry Security of Payment Act 1999 (NSW)
provides to party of the construction contract, the legal right to progress payments for the
work or for supply of related goods and the amenities. It also provides a method to impose
the statutory right to the progress payment. It render that where an applicant selects to recover
the due portion of demanded amount as liability from court, a person is not authorised to take
a cross claim against the applicant or arise resistance regarding the issues arising under
construction contract. The property council of New South Wales forms a maintainable and
affordable housing market in New South Wales, which renders various range of the
accommodation options. In the case of Walter Construction Group Pty Ltd v CPL (Surrey
Hills) Pty Ltd [2003] NSWSC 266, it was held by the court that main object of this act is to
provide the powers and rights to the progress payment for the people who conduct the work

ESSAY 3
related to construction. The same purpose is defined in the case Beckhaus v Brewarrina
Council [2002] NSWSC 960.
Why was act introduced?
In Australia, the community of sub-contractors were seeking for the protection in respect of
the payment of the sub-contractors. To protect the payment of the sub-contractors, many
legislatures, rules, and regulations have been introduced in various states of the Australia
such as Queensland Sub-Contractors Charges Act (1974) and the employee’s lien legislations
passed in South Australia (Uher and Davenport, 2009). New South Wales announced first
inclusive scheme in 1999. This inclusive scheme aimed directly at the secured progress
payment for the contractors, sub-contractors and the dealers in construction industry and
building industry (Coggins, Teng and Rameezdeen, 2016). The features of UK Housing
Grants and the Construction and Regeneration Act, 1996 have been accepted by New South
Wales Building and Construction Industry Security of Payment Act 1999 (the NSW Act) (Fu,
et. al, 2016).
During the operation of the NSW Act, the state government have made investigation for
protection of the payment regulation. The NSW Act is directed towards improving the two
main issues in building industry and the construction industry. The first issue arises, when the
developer withholds the money from the contractor without any explanation based on
groundless claim or unfair set-off. The developer having important capital or undercapitalised
developer can make effective use of the builders as not paid bankers by denying, or otherwise
failing to make settlement of their accounts as per the situations (Martinsuo and Ahola,
2010). The second issue is related to the delay payment. This problem arises when the
contractor suppresses the money from the sub-contractor or delays the payment for 90 days to
120 days. This difference of time between the payment to contractor and payment made to
sub-contractor, the amount of the sub-contractors becomes free capital for the supplier. On 30

ESSAY 4
October, 2013, the New South Wales legislative assembly enacted the many proposed
amendments to the Building and Construction Industry Security of Payment Act 1999
(NSW). These amendments or revisions will change the construction legal land in New South
Wales for some time to come (Clarke and Wardle, 2017).
The Building and Construction Industry Security of Payment Act 1999 (NSW) was enacted
to attempt the counter of protection of the issue of progressive payment in NSW. The
Building and Construction Industry Security of Payment Act 1999 (New South Wales) was
introduced to make sure that any individual who carries out the supply of possessions and
services or any construction work as per the contract related to construction, is permitted to
take, and is capable to take back the progress payment of related work and providing
possessions and amenities. The Building and Construction Industry Security of Payment Act
1999 (NSW) claims inspires Communication between many parties, which gives a chance for
the early clashes prevention or the determination. The influence of present security of
payment regulation or law is to prevail the predetermined relationship of members in
construction procedure (Carter, Peden and Tolhurst, 2007). In the case of Hickory
developments Pty ltd v Schiavello (Vic) Pty ltd & Anor [2009] VSC 156 at [2], it was held by
the court that common objective of protection of payment regulation and object to be served
need no introduction.
How does the act work in respect of the regular court actions?
The New South Wales Act introduced the rapid procedure of adjudication, that is speedy and
relatively inexpensive mechanism for the solution of the arguments related to payment on the
temporary basis. The settlement process or the arbitration process and timeframes are firm
and administered by the NSW Act. The purpose and determination of the arbitrator or judge
is obligatory on the parties till the date when matter is totally solved, maybe by the court or
by any private agreement (Glendon, Clarke and McKenna, 2016) . In New South Wales, if

ESSAY 5
any party who is required to pay, but cannot make payment of the decided amount by the
applicable period, then the purpose of determination of the adjudicator is able to get
registration as the judgement in the court of capable authority by the procedure agreed in the
New South Wales Act. When it registered, the purpose of the adjudicator is enforceable in the
similar manner as an order of court (Brand and Uher, 2010).
If at the last level, the respondent makes application in the court to have decision away, the
respondent is not permitted to make a cross-claim in contradiction of the demanding party, or
rise any protection in respect of the issues raising as per the contract related to the
construction, or encounter the purpose of an adjudicator except on the grounds permitted by
the court (Harris and McCaffer, 2001). It is much needed by respondent to make payment in
court as the safekeeping due part of arbitrated amount awaiting result of the proceedings of
court (Berdal, 2017).
Recent amendments in the Building and Construction Industry Security of Payment Act 1999
in relation to the sub-contractors-
There are many amendments have been made in the in the Building and Construction
Industry Security of Payment Act 1999 regarding to sub-contractors. The amendments have
been made the Building and Construction Industry Security of Payment Act 1999, to provide
rights to subcontractor in respect of the owner of the property. The Amendment Act is just to
create it complex than for subcontractors to attain rapid sum. These amendments have been
introduced to have some good image on decreasing economic effect of the indebtedness on
the subcontractors in New South Wales construction industry. The amendment Act 2013 can
be of interest in global authority where constitutional or legal adjudication for the
construction industry or the building industry has been announced or is being considered or
planned (Hughes, Champion and Murdoch, 2015). To resolve the difficulties of the
subcontractors and to provide the rights to subcontractors related to the owner of property,

ESSAY 6
the New South Wales Act is amended by 2013 Amendment Act. These amendments renders
the fair terms of the payment for the subcontractors. It would hold main contractors for
explanation of the statement in respect of the payment to the subcontractors. These
amendments provide the easier and simpler way to the subcontractors for the better and
simple utilisation of the Building and Construction Industry Security of Payment Act 1999
(Law, 2017). The section 4 of New South Wales Act is altered by addition of descriptions of
release housing construction contract, main contractor and the sub-contractor (Glendon,
Clarke, and McKenna, 2016). The section 11 of New South Wales Act is altered by
including extended period for the payment after receiving the claim of payment. The section
13 of the NSW Act is also altered to eliminate some contracts (Ashworth and Perera, 2015).
Conclusion
As per the above analysis, it can be concluded that the Building and Construction Industry
Security of Payment Act 1999 creates a complete obligations and privileges to the progress
payments. This helps in securing and claiming the progress payments in building industry and
construction industry. It signifies an important step forward for Victoria. In past times, there
was no legislation in that area. The Building and Construction Industry Security of Payment
Act 1999 (NSW) Act considerably glasses New South Wales Act. Many difficulties with
legislature are carried by as consequences of this. The constant nature of the structures will
support all the parties involved to include the necessities into their work practices, exercise,
and see their new privileges and new accountabilities.
In respect of the latest solid requirement for settlement of payment entitlements in NSW, the
Building and Construction Industry Security of Payment Act 1999 (New South Wales) has
debatably prospered in attaining the sustenance of the important part of the construction
industry or the building industry to which it implies. As per this, it will see that the aim of the
Building and Construction Industry Security of Payment Act 1999 (New South Wales) is

ESSAY 7
usually being attained. As per this, it is clear that the obligation in the Act of sanctioning
payment claims inspires interaction between the parties. On the other hand, the consequences
show a remarkable adverse alteration since the 2004 study in applicants’ view of how
authorization of payment entitlements influences working association between the parties.

ESSAY 8
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