Common Security of Payment Act Cases

[Sample situation]

Mark is a 38-year-old contractor based in Sydney. He is involved in a commercial building project. He was able to finish the work ahead of the deadline agreed by him and his principal. He then issues a payment claim for the work he has done. In the contract, they agreed that a payment or a payment schedule must be issued within 10 business days since the issuance of the payment claim. However, 10 business days had passed and he hadn’t heard anything from his principal. Eventually, the principal responded with a payment schedule 3 days after the 10-day deadline, and it went on like that until the third time of claiming for construction work. This delay in payments that Mark experienced is subject to the Security of Payment Act NSW.

For Mark to make sure that he doesn’t experience this again, he may ask for legal assistance and advice from a building lawyer who has the right knowledge and experience in Security of Payments. Mark has the right to demand for payment on the date or deadline that he and his principal agreed on.

[Sample situation]

Karl is a 40-year-old subcontractor based in Sydney. He had just finished working on the electricals of a commercial building project. He issued a payment claim for the work he has done. However, his principal issued a payment schedule stating that only half of the agreed amount will be paid to him. No reasons were stated in the payment schedule. He tried to reach out to his principal to talk their situation over, but his principal was no longer contactable. This short payment case can be subject to the Security of Payment Act.

Karl may consult a construction lawyer and have his rights to pursue an adjudication enforced. He has the right to get the full amount that he and his principal agreed on in the beginning of their contract.

[Sample situation]

DJ is a 39-year-old supplier based in Sydney. He was able to provide materials for the second phase of the building project he’s in and eventually proceeds to claim for the work he has done. He issued a payment claim on their agreed reference date and expects to receive a payment or payment schedule within 10 business days. Unfortunately, after their agreed deadline, he didn’t receive anything from his principal. He tried several times to contact him, but couldn’t reach to him. This non-payment incident can be subject to the Security of Payment Act NSW.

DJ may seek the help of a legal expert specialising in building and construction to apply for adjudication. He may also consider suspending his work with his principal until he gets rightfully paid. DJ has the right to get paid for the construction work he has done and doesn’t deserve to get ripped off.

There are also other instances that can be subject to the Security of Payment Act. This can be a reference date that wasn’t stated in the contract or a variation that the principal has knowledge of and is being charged to him by the contractor. The thing is, it’s important to seek the legal advice of a construction lawyer to assess if it qualifies under the Security of Payment Act.

Learn More: Adjudication Process >