July 9, 2018

On 21 December 2016, the Australian Government announced a national review on the existing Security of Payment (SOP) legislation. Mr John Murray AM was commissioned to conduct the review. The primary objective of which was to determine a suitable model for achieving consistent SOP legislation among jurisdictions and improving accessibility to parties. In conducting his review, Mr Murray consulted with various stakeholders across all levels of governments, businesses, unions and other industry bodies.

Mr Murrays’ final report was released to the public on 21 May 2018. The report identifies three ‘pillars’ which underpin the policy objectives of the legislation (and consequently, the recommendations made in the report), being:

  •   minimising complexities and administrative burden;
  •   providing equal rights and protections across jurisdictions; and
  •   promoting prompt payment.

The report includes 86 detailed recommendations. The overriding recommendation of the report is the need to achieve national harmonisation of SOP legislation.

At a high level, the report identifies a number of other significant recommendations, including:

  •   the adoption of a single regime for making claims under the Act that does not differentiate between claims on the basis of being ‘complex’ or ‘standard’.
  •   that the legislation should not apply to a claimant corporation that is in liquidation.
  •   the abolishment of ‘reference dates’. The report recommends providing a claimant with an entitlement to submit a payment claim each month (or more frequently if the contract provides).
  •   an express requirement that all payment claims include an endorsement that the claim is made under the Act.
  •   a number of recommendations regarding the establishment of a system for the review of adjudicator decisions.
  •   that certain unfair contract terms be deemed to be void, including unreasonable notice requirements.
  •   the introduction of a deemed statutory trust model for all payments within the contractual “chain”.

The Australian Government, through the Building Ministers’ Forum, is working with the States and Territories in considering the recommendations made by Mr Murray in his report.

The text of the full report can be found here.

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