Chapter 15 What is Security of Payment Legislation?

The legislation is aimed at ensuring that:

  • contractors and subcontractors in the construction industry are paid for the construction work they perform; and
  • payment is made on time without the need for costly and lengthy litigation where payment is disputed.

The legislation was introduced primarily for the benefit of subcontractors, but it applies equally to other industry participants including contractors, consultants, manufacturers and suppliers.

Security of payment legislation was first introduced in New South Wales, followed by Victoria, Queensland, Western Australia, the Northern Territory and, in 2009, the Australian Capital Territory, South Australia and Tasmania. Although the legislation in each jurisdiction is similar, there are some important differences to be aware of.

This chapter looks at each jurisdiction and addresses:

  • when does the legislation apply;
  • what rights do contractors have;
  • what must a principal do when faced with a claim;
  • what are a contractor’s rights if not paid; and
  • how does a contractor enforce its rights.