Major changes to the QLD construction industry passed by parliament

Yesterday, parliament passed the Building Industry Fairness (Security of Payment) Bill 2017
(the Bill). This marks the most significant raft of changes to the Queensland building and construction industry since the introduction of security of payment legislation in 2004.

Our previous update outlined the significant changes that will be introduced by the Bill, and our subsequent update addressed the introduction of Project Bank Accounts (PBAs), including the discrepancies in the proposed changes and the storm of uncertainty surrounding PBAs.

Although the Bill ultimately received bipartisan support, it was strongly criticised by the opposition Liberal National Party for being rushed through parliament and requiring substantial amendment. A total of 143 amendments were made to the original draft of the Bill in response to wide-ranging industry concerns, including those expressed in the submissions of key stakeholders. Despite those amendments, we anticipate that the passing of the Bill will be met with significant concern from various industry stakeholders, and there is still uncertainty surrounding the operation of key and essential aspects of the reforms.

In what provides at least some level of comfort for the industry, there will be:

1. at least one year between the implementation of PBAs for government projects (Phase 1) and the implementation of PBAs industry-wide (Phase 2); and
2. an independent review and report on the effectiveness of these reforms that will commence no later than September 2018.

The government believes that it will be able to “iron out” the problematic issues that will arise in relation to PBAS before the commencement of Phase 2.

Amendments to PBA provisions

The key amendments to the PBA provisions of the Bill are outlined in the table below:

BCIPA replacement provisions

From commencement of the new act, the provisions replacing the Building and Construction Industry Payments Act 2004  (BCIPA) will apply to all contracts whether entered into before or after commencement of the act, except for “unfinished matters” as defined in the Bill (i.e. if a payment claim is served prior to the commencement of the amendments, the provisions BCIPA will continue to apply to any step taken in respect of that payment claim).

The key amendments made to the BCIPA replacement provisions include:

1. a payment schedule will not be required to be provided if the subcontractor’s payment claim is paid in full by the required time;
2. the ability to prescribe (by regulation) further requirements for information to be included in a payment schedule;
3. the proposed limitations on the size of an adjudication application have been abandoned;
4. an adjudicator may decide the adjudication application in a longer period than the time prescribed if the parties agree in writing or the claim relates to a complex claim and the parties have failed to reach an agreement.

Staying up to date

The majority of the reforms will commence by proclamation (at a date yet to be fixed by parliament).

CDI Lawyers will keep you abreast of any further developments with respect to the Bill and its effect on the Queensland building and construction industry.

Key contacts:

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader’s specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.