In September this year, the Queensland Government passed the Building and Construction Industry Payments Amendment Act 2014 (Amendment Act).  The Amendment Act (incorporating recent amendments made in November 2014) is expected to commence by 22 December 2014.

Following the passing of the Amendment Act, the industry raised concerns as to how transitional provisions of the Amendment Act would apply, particularly given the impending Christmas shut down period.

Consequently, on 26 November 2014, the Queensland parliament passed transitional amendments to the Amendment Act which is intended to eliminate any confusion with working out different timeframes and procedures in the period of transition.  The following is a non-exhaustive summary:

  1. New procedures of the Amendment Act, including the definition of “business day”, will apply to all payment claims (and subsequent adjudications) made after the commencement date, notwithstanding whether a contract existed at that point in time.
  2. Where payment claims are served on a respondent before the commencement date, the former Building and Construction Industry Payments Act 2004 (Former Act) will apply. However, this process will differ, in some of the following ways:
    1. All functions of authorised nominating authorities (ANAs) will be assumed by the Queensland Building and Construction Commission (QBCC) Adjudication Registrar. In particular, this means that all adjudication applications will be lodged with the QBCC Adjudication Registrar.
    2. Any adjudication application already lodged with an ANA but not referred to an adjudicator must be referred by the ANA to an adjudicator.
    3. Application of new section 35B BCIPA, by the Amendment Act,which deals with the withdrawal of an adjudication application.
    4. Application of new section 100(4) BCIPA, by the Amendment Act, which deals with treatment by court of a decision affected by jurisdictional error.
    5. The new definition of “business day” will apply.
  1. There will be two transitional provisions applying to the time in which claimants under existing contracts can lodge a payment claim under the Former Act:
    1. Under section 17A(2)(b) or (3)(c), the Amendment Act allows for a new six month maximum period for serving a payment claim.However, for six months following the commencement date, the maximum period will be extended to 12 months.
    2. Under section 17A(3)(b), a contractor can make a payment claim 28 days after the expiry of the end of the last defect liability period under the contract.  

Our Comments

The new security of payments adjudication changes are a major part of a broader building and construction law reforms agenda of the Queensland government.  Other parts of that agenda are the subject of a discussion paper on Better Payment Options as noted in our previous article here.  The changes to the Building and Construction Industry Payments Act 2004 are far reaching and should certainly be considered by both contractors and principals in Queensland.  In due course, the changes will no doubt provide an interesting comparison to security of payment adjudication statutory schemes in other States.