Building and Construction Industry Security of Payment Act 2009

Lisa Papanicolaou  |  Kate Taylor

Key takeouts

In South Australia parties to contracts with the Crown under which the total amount payable over the contract term exceeds $4 million (excluding GST) will now have a reduced ability to enforce payment and will not be entitled to seek adjudication.

Building and Construction Industry Security of Payment (Exemption) Amendment Regulations 2025

The Building and Construction Industry Security of Payment Act 2009 (SA) (SA Act) object  is to ensure that a person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services.

A recent amendment to the Building and Construction Industry Security of Payment Regulations 2011 (SA) restricts a person’s right to enforce payment and seek adjudication if they are a party to a ‘prescribed contract’. A prescribed contract for the purpose of the SA Act is a contract with the Crown under which the total amount payable over the contract term exceeds $4 million (excluding GST).

Notably:

• a payment claim made under a prescribed contact becomes due and payable in accordance with the terms of contract, and not on the due dates specified in the SA Act;
• the respondent to a payment claim will not automatically become liable to pay the full amount of the payment claim where no payment schedule has been served;
• the claimant will not have a right to suspend works due to non-payment under the SA Act; and
• the parties to a prescribed contract cannot commence an adjudication application to recover unpaid amounts.

In addition, the amendment provides that the SA Act does not apply to services provided under a prescribed contract.