National review of security of payment legislation by John Murray AM

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The long-awaited national review of security of payment legislation by John Murray AM has been released.

The ‘Murray Report’ recommends harmonised security of payment laws across Australia by selecting various provisions of each state’s and territory’s model and emphasises the importance of the Commonwealth, states and territories working together to implement those recommendations.

Some of the key recommendations of the Murray Report:

  1. Reference dates to be replaced with an entitlement to make a payment claim every named month, or more frequently if so provided under the contract;
  1. Payment claims to identify a detailed breakdown of the amount claimed; the time period within which the respondent is to provide a payment schedule; and should be endorsed as a claim made under the legislation (among other related requirements);
  1. Supporting statements to accompany payment claims submitted to a head contractor to the principal (requiring a statement that subcontractors and suppliers have been paid);
  1. All adjudicators are to be trained, registered, graded and appointed to disputes by a new regulator;
  1. The introduction of statutory trusts for subcontractor payment and the adoption of an extended Christmas shutdown period; and
  1. Any parts of an adjudicator’s decision that falls into jurisdictional error, but does not affect the whole of the decision, can be severed;
  1. Claimants to be entitled to withdraw and make a new application if an adjudicator has not accepted its application within 4 business days, an adjudicator fails to determine an application within the prescribed timeframe or an adjudicator has given notice of their withdrawal from the adjudication;
  1. Parties entitled to make an application for a review of an adjudication determination if the adjudicated amount is equal to or greater than $100,000 of the scheduled amount, or $100,000 (or more) lower than the claimed amount.

The Australian Government is working with the states and territories through the Building Ministers’ Forum (BMF) to consider and respond to the findings and recommendations of the Murray Report.  Responsibility for this project has now transferred to the Department of Industry, Innovation and Science which provides secretariat support to the BMF.

We will keep you posted on developments and look forward to the proposed harmonisation of security of payment legislation.

Regards Brendan and Scott