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Additional Recovery Options Under the Building Industry Fairness (Security of Payment) Act 2017 September 22, 2020

The Building Industry Fairness (Security of Payment) Act 2017 (BIFA) was introduced in 2017 to replace the Building and Construction Industry Payments Act 2004.

BIFA altered some of the formal requirements relating to payment claims, payment schedules and the timing of some steps in the adjudication process.
Amendments to The Building Industry Fairness (Security of Payment) Act 2017 will come into effect on 1 October 2020. These amendments introduce additional avenues for applicants in the adjudication process to recover adjudicated amounts, including:

1. a head contractor registering a charge over property of the developer for unpaid adjudication amounts; and
2. a claimant serving on a higher party in the contractual chain a payment withholding request (PWR) to withhold monies from the respondent.

Examples of the latter may be a subcontractor serving a PWR on a developer to withhold monies from payment to the head contractor or a head contractor serving a PWR on the financier of the principal.

Once the higher party is given a PWR, they must retain an amount up to the amount stated in the PWR. However, there is no obligation to retain more than what the higher party owes the respondent. A higher party that fails to retain the amount becomes jointly and severally liable with the respondent for paying the adjudicated amount.

These options are in addition to the presently available options such as:
1. give a written notice of intention to suspend work; and
2. lodge the adjudication certificate as a judgement debt in court.

For advice or information regarding any building and construction issues including payment claims, contact Director of Dispute Resolution, Scott Eustace, at [email protected] or phone 3439 8880.

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