Proposed changes to the Building and Construction Industry Security of Payments Act 2002 On 9 March 2023, the Victorian Legislative Assembly passed a motion for an inquiry into proposed changes to the Building and Construction Industry Security of Payments Act 2002 ('Act').
The committee formed to make the inquiry has now finalised its recommendations in a newly publish report, based on the Murray Review 2017 and submissions by adjudication authorities, adjudicators and legal practitioners. The proposed changes in summary, include among others: - The Act to encompass construction contracts with homeowners and not just developers. - Only allowing respondents “one shot” in responding to a payment claim with their reasons for not making payment in their Payment Schedule, and not allowing new reasons to be raised in the Adjudication process, which is currently unique to Victoria. - Repealing the concept of “excluded amounts” and abolishing non-claimable contract variations. - Removing the concept of “reference dates” and introducing a statutory right to make a payment claim - The definition of “business days” under the Act be amended to exclude, Saturdays and Sundays, Victorian public holidays, and the period between 22 December and 10 January inclusive. - Notice-based time bar clauses to be declared ‘unfair’ by an adjudicator, a court, an arbitrator (or other expert appointed by the contracting parties) - Prohibiting unfair construction contract clauses and, in doing so, nullify their effect. - Extend the time limit on making a payment claim to six months - Provide an entitlement to claim retention money under the Act and empower an adjudicator to decide whether retention money is to be returned It is hoped that the proposed recommendations to amend the Act, improve payment and business practices within the Victorian construction industry, and bring the Act more closely in-line with that in other states, ultimately making a step towards national consistency and harmonisation of this legislation.
