Security of Payment Act 1999: Analysis and Court Action Relation

This assignment provides a detailed analysis of the Building and Construction Industry Security of Payment Act 1999 in New South Wales. It explores the Act's working mechanisms, reasons for its introduction, its relationship to court actions, and amendments concerning the rights of subcontractors. The Act aims to ensure fair and timely payments to construction industry participants, addressing historical issues of exploitation and payment insecurity. The analysis covers the Act's applicability to construction contracts, the process for payment claims and schedules, and the rights of claimants to suspend work for non-payment. It further discusses how the Act empowers subcontractors and provides avenues for dispute resolution through adjudication and court actions, emphasizing the Act's role in fostering a more equitable construction industry in NSW.

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 1
BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999
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BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999
Introduction
New South Wales commonly abbreviated as NSW is one of the State in Australia found
on the Eastern part or region. It borders several States, for example, it borders Victoria to the
West, Queensland to the North, and South Australia to the West and to the East it borders the
Tasman Sea (Act 2016). This makes New South Wales one of the best State in Australia. Due to
its industrialization and development of infrastructure, it led to the rise of conflict and
misunderstanding between the contractors, sub-contractors and the owners of the tende5rs to be
contracted due to the issue of payment and its security. Due to this reason, the government
through its elected legislators and other institutions mandated to ensure smooth running and
operations of payment of contractors came up with an Act to curb this problem. They introduced
the Building and Construction Industry Security of Payment Act 1999 which helped to solve the
problem affecting the construction industry. In this essay, it will highlight several things within
the Act. For example, the way this Act works, the reason for its introduction, and how this Act in
reference to Court actions and the amendment that has had recently been made.
1. The working of the Act
The Building and Construction Industry Security of Payment Act of 1999 aims to cover
the payments for works carried out of constructions and any related services and goods which
were supplied during and under construction period of contracts and for any other purpose
related in the building and constructions industry (Uher and Brand 2018). According to section
seven of this Act, this Act is only applicable to any construction contract whether written or
partly written or even oral or partly oral. It also must be within the provision of the law of New

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 3
South Wales. This Act works to the claimant who has a construction contract as defined by the
Act in place with the debtor (Ashworth and Perera 2018). In this Act, for it to be effective to the
claimant, must submit or serve the payment claim within twelve months of working on that
project failure to which the claim may not be effective before the law or the Act. Also, for the
Act to work, the payment claim ought to fulfill all the necessities and the requirement that the
Act requires. In the event of preventing or defending in adjudication, the debtor is required to
serve or provide the claimant with the payment schedule (Wales 2017).
Additionally, under this Act, the claimant is allowed and legalized to serve or provide
notice to the debtor to suspend works if the debtor has not cleared the agreed payment by the day
of payment. This meant that workers can serve the boss with notice of not reporting to the work
if the payment is delayed without good reason and the boss cannot fire or suspend the worker.
Also, this Act provides that the claimant has a right to request for the withholding of his or her
payment on the contractor once adjudication application is made (Brien 2017). Similarly, the
Claimant cannot use this Act against the debtor who are still at the premise and residence where
the construction works were carried out. Too, this Act provides that the claimant provides one
payment claim in every reference date unless otherwise explained and agreed by the contracts.
This Act came to curb the exploitation which has been done to the workers or claimants more so
within the construction areas were denied their pay by the contractors and other debtors (Brand
and Davenport 20160.
2. Reason for the introduction of this Act
In New South Wales, people who took Part in construction work either through direct
taking part of my supply of good and services to be used during the construction were mistreated
and most subcontractors were not paid their dues at the right time and that no strong law that

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 4
could be used to fight for their right. As a result, the government of New South Wales introduced
this Act in 1999 which was an amendment in order to take care of the claimants more so who
worked or supplies goods and services to the construction companies (Brand and Uher 2017).
Also, this Act was introduced in order to ensure that individuals working in the construction
industry receives progressive payment from their bosses in the construction contract.
Additionally, the Act provides statutory entitlement to all progressive payment done to the
people working with construction industries. Moreover, this Act was introduced to ensure that
people who undertake works in the construction industries receive their payment and also able to
recover their progressive payment done to the construction contract p.17.
In addition to the above reason why this Act was introduced, building and construction
industry security of payment Act 1999 provide ways in which claimants or person whose
progressive payment has not be paid. According to Stephenson and Harrison (2016), these ways
include making claim to the court by the person affected or claimant, legalizing and allowing the
provision of payment schedules among others. Also, the Act was brought forth in order to ensure
that the claimant can be able to raise any other grievances affecting them at the contraction
industry. The claimant may have other entitlement under the contract of construction and
therefore, this Act was introduced in order to ensure that all contracts agreed in construction
contract are fulfilled to the claimant (Cahill et al 2018). The Act of building and construction
industry security of payment is one of the Act that the State of New South Wales ever had
because construction industry in this State offers employment to most members of the State that
is Citizen and also one of the main sources of revenue to the government of New South Wales.
The mistreatment and exploitation of workers and suppliers of goods and services in this
industries made the legislators and other relevant bodies and institution mandated to be in charge

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 5
of this sector to come up with Act and regulations that will regulate the operations and working
within this industry and ensure that in case of any mistreatment, exploitation, and claim, the
claimant can legally raise concerns and legal measure be taken to the contractor (Cheung et al
2015).
3. The working of the Act in relation to court actions
Building and construction industry security of payment Act 1999 as stated earlier aims at
ensuring that justice and the rights of the claimant are taken care of without discrimination and
favor and that contractors and other relevant authorities and institutions do not exploit the
workers both the suppliers and the workers at the construction industry. This Act as provided by
the legislators has it mechanism or operations and working before the court actions. In relation to
court action, this Act cannot apply if the claimant is part of the contract or any other
circumstances that may be seen to compromise the adjudication process (Supardi, Adnan and
Mohammad 2016). The process and the adjudication process under this Act and in relation to the
court are supposed to be in written form and the claimant ought to nominate an authority
responsible for adjudication. In the application of adjudication under several sections within this
Act, the application should be made some days after the due day or date for the payment has
passed. This before the court provides the basis of a reasonable judgment that the debtor refused
to honor the contract an agreed (Enemark, Williamson and Wallace 2015).
The application of this adjudication ought to be accompanied by the application fee
which caters for the adjudicators. Failure of this application fee, the claim may not be determined
and even the adjudication team may not be formed in order to listen for the claimant's claim and
instruct the debtor pay the claimant. After the claimant has applied for adjudication, a copy of the
case must be served to the respondent or the claimant. If the claimant fees that justice has not be

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 6
served to him or her by the adjudicating team, he or she can reapply for re-adjudication but this
time around, a different team hears the case for the purpose of fairness and justice. Moreover, in
court, the claimant must have the legal and up to date construction contract. This proves that the
applicant was in an agreement with the said construction industry and fails or even delayed to
settle the payment as agreed in the contract. Lack of this contract before the court may make the
Act not applicable because no prove or evidence that the claimant worked with the said
constructions company. This Act before the law works within the jurisdiction of New South
Wales. This is because it is a sovereign State that therefore, its laws and regulations governing
several institutions are implemented within its borders. Also, this Act does not apply to those
who lend or to those who are repaying (Hughes, Champion and Murdoch 2016). It was only for
the construction contracts so as to ensure that the contractors do not exploit the claimants and
that their business is protected by the government. Under this Act, the court allows that the
applicant must ensure that he or she has worked with the construction company not less than
twelve months so as to fail a successful and legal adjudication (Mohamed 2018).
4. Amendment of the Act on the rights of the subcontractors
The building and construction industry security of payment Act 1999 was introduced in
order to be able to solve the problems and conflict between the subcontractors and the owners of
the property because of the issues of payment. As a result, this Act gave powers and rights to the
subcontractors so as to make them powerful and worthy and their due without exploitation and
injustices by the owners of the properties and contracts. Some of the rights given by this New
South Wales Act of 1999 includes; the subcontractors were given right to provide and instruct
the payment to withhold that it is so. This makes the claimant be in control of their payment and
ability to make choices about their payment (Moore 2018). Also, the subcontractor is the only

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 7
person or individual mandated by the Act to make or even fail adjudication. This makes it
possible and it gives hope to the subcontractors who for a long period have been exploited by the
contractors who are the owners of properties. More importantly on this amended rights of the
subcontractors is that the relayed or the unpaid payment was subjected to interests thus making
the subcontractors benefit. As a result, the problem of payment insecurity was addressed by this
Act (Uher and Brand 2015).
Conclusion
In conclusion, therefore, building and construction industry security of payment Act 1999
in New South Wales provided an opportunity for the development and security of the payment of
many subcontractors who worked with construction industries because in most cases they were
not paid or even delayed for a long time without pay and this affected the economy of New
South Wales negatively. With the introduction of this Act and its amendment, payment security
and be realized for the subcontractors. Also, with the enactment of this Act, less conflict in the
construction industry has reduced because the main cause of those problems and conflict was
undressed.

BUILDING AND CONSTRUCTION INDUSTRY SECURITY AND PAYMENT ACT 1999 8
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