On 7 December 2020, Premier Mark McGowan announced that the Honourable Kim Beazley AC, Governor of Western Australia, had prorogued State Parliament
As a result, all bills that have not been passed will lapse and will need to be re-introduced in the next session following the election on 13 March 2021.
Consequently, Western Australia's move to a more harmonised national approach to security of payment legislation will be put on hold. The Building and Construction Industry (Security of Payment) Bill 2020 (WA) (Bill), which was passed by the WA Legislative Assembly on 10 November 2020, promised a drastic departure from the Construction Contracts Act 2004 (WA).
Drawing upon similar legislation in New South Wales, the Bill, should it be enacted by the next State Parliament, would:
- Introduce a statutory payment regime requiring payment of progress payments within 20 business days after a payment claim is made by a head contractor to a principal, or within 25 business days after a payment claim is made by a subcontractor, unless the contract prescribes an earlier date.
- Necessitate the use of payment schedules setting out the reasons for respondents who dispute any part of a payment claim. Critically, the proposed legislation would prevent a respondent from raising in an adjudication reasons for non-payment that were not adequately provided for in the payment schedule. Should a respondent fail to provide a payment schedule within 15 days of receiving a payment claim, it will become liable to pay the claimed amount on the date for payment and will be barred from providing a response to any future adjudication application (subject to a "second chance" opportunity following a claimant's notice to adjudicate). Alternatively, the claimant may choose to recover the unpaid portion as a debt due in a court of competent jurisdiction.
- Replace a claimant's right of review of adjudication determinations by the State Administrative Tribunal, with a limited right of review by a senior adjudicator for certain types of determinations.
- Further narrow the "mining exemption" to the extent that considerably more types of construction work would fall within the ambit of security of payment legislation.
- Allow adjudicators, arbitrators and courts to declare noticebased time bars unfair and of no effect if compliance with the provision in that particular case is not reasonably possible or would be unreasonably onerous.
- Grant the Building Commission and Building Services Board broader powers to prevent entities with a history of insolvency, not paying adjudication debts or engaging in "phoenixing" from registering as a building contractor.
- Require retention money in the vast majority of construction contracts to be held on trust, with the parties having limited recourse to the security.