Welcome to Construction Insights, your fortnightly resource for staying informed on the evolving landscape of construction law and industry developments. Published every two weeks, this update ensures you stay current with the latest developments in the field.
Case update: Payment schedules in the spotlight
Supreme Court confirms narrow scope for challenging adjudication decision – the importance of a compliant payment schedule
In Baguley Build Pty Ltd v Olcon Concrete & Construction Pty Ltd & Anor [2025] QSC 126 the Supreme Court of Queensland has confirmed the limited grounds available to challenge an adjudication decision under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFSOPA).
Olcon issued a payment claim for $137,075.40. Baguley responded with a payment schedule for $nil, stating only that its “Reasons for withholding payment have not changed” from earlier claims – without repeating or clearly identifying those reasons. When Baguley later tried to expand on those reasons during adjudication, the adjudicator rejected them as “new reasons” not included in the original payment schedule.
Baguley argued on appeal that this was a jurisdictional error. The Court disagreed. It found the adjudicator was entitled to reject any reasons not properly made in the original payment schedule.
Takeaway
This case highlights the importance of making sure your payment schedule is complete and specific from the outset – especially if you intend to dispute a claim.
Read the full judgement here: PDF – Baguley Build Pty Ltd v Olcon Concrete & Construction Pty Ltd & Anor [2025] QSC 126 | SUPREME COURT OF QUEENSLAND – TRIAL DIVISION
New South Australian Regulations exempt certain Government contracts from SOPA
On 1 May 2025, the Building and Construction Industry Security of Payment (Exemption) Regulations 2025 (SA) came into force introducing a noteworthy change to the operation of the Building and Construction Industry Security of Payment Act 2009 (SA) (SOPA).
Under the new regulations, key provisions of SOPA will not apply to contracts with the Crown where the total contract value exceeds $4 million (excluding GST). In effect, government contracts in this category will be carved out from the usual mechanisms for progress payments and adjudication under the Act.
Key implications for prescribed contracts include:
- Payment terms: Payment claims must adhere to contractual timeframes rather than statutory SOPA deadlines.
- Liability for non-response: Failure to serve a payment schedule will not automatically render the Crown liable for the claimed amount.
- Suspension of works: Claimants will not have a statutory right to suspend works due to non-payment.
- Adjudication restrictions: Parties cannot pursue adjudication to recover unpaid amounts.
This development significantly limits the Crown’s exposure to adjudication and curtails the scope for SOPA-based disputes over payment claims. The reform is likely to prompt interest from other jurisdictions, particularly those seeking greater contractual control and reduced statutory risk on high‑value government projects. Queensland contractors – watch this space!
New building regulator for Victoria
In a significant reform, the Victorian Parliament has passed the Building Legislation Amendment (Buyer Protections) Act 2025 (Vic), introducing a new regulatory agency – the Building & Plumbing Commission (BPC) – and enhanced consumer protections in the building industry.
Key changes:
- Unified regulation: The BPC consolidates the Victorian Building Authority (VBA), Domestic Building Dispute Resolution Victoria (DBDRV), and the Domestic Building Insurance (DBI) function of the Victorian Managed Insurance Authority (VMIA), creating a one-stop shop for regulation, dispute resolution, and insurance.
- Enhanced Powers: The BPC can issue rectification orders for defects identified post-occupancy, compel developers of buildings over three storeys to notify the regulator before occupancy for final inspections in an attempt to more effectively ensure compliance with building codes / regulations.
- First-Resort Insurance: A new statutory insurance scheme allows homeowners to claim for defective work without waiting for builder insolvency or disappearance, addressing previous limitations of the last-resort model.
- Developer Bonds: Developers of residential buildings over three storeys are required to provide a bond (initially proposed at 2% of construction cost) to cover potential defects, though this has faced industry scrutiny over cost implications.
These reforms aim to strengthen consumer confidence and accountability in Victoria’s building sector. However, industry stakeholders have raised concerns about increased regulatory burdens and potential impacts on construction costs. The BPC and its new powers will be implemented progressively over 2025 / 2026 in consultation with industry stakeholders.
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