The exposure draft of the Building and Construction Industry (Security of Payment) Bill 2020 (WA) (Bill) was recently released to stakeholders for review. If enacted, the Bill will replace the current Construction Contracts Act 2004 (WA)(CCA) with a security of payment regime that has similarities to the security for payment regimes in the eastern States.
Some notable features of the Bill include:
- Provision for unfair time-bars to be rendered void;
- Change in maximum time for payment of payment claims – the current maximum allowable period for payment is 42 days. The Bill will reduce the maximum allowable time for payment, which will vary in accordance with the claimant’s position in the contracting chain. For example, claims from head contractors to principals/owners will now need to be paid within 20 business days of the claim (or any lesser period in the contract); claims by subcontractors to head contracts paid within 30 business days (or any lesser period in the contract);
- The rapid adjudication process will be more consistent with those in the eastern States, and include the concept of payment schedules. If a respondent fails to provide a payment schedule, they will not be entitled to provide an adjudication response. If a respondent provides a payment schedule, the adjudication response will be limited only to the reasons for withholding payment set out in the payment schedule. This will encourage respondents to consider and articulate their reasons for withholding payment at an early stage; and
- The introduction of a deemed retention trust scheme. The scheme will apply across the supply chain in WA whenever cash retention or security is withheld under a construction contract, despite any term in a contract to the contrary.
We at Pragma Lawyers will be monitoring the Bill and its progress through consultation and further stages.