The Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”) came into effect on 26 March 2000. Its stated object is to ensure that any person who carries out construction work (or who supplies related goods and services) is able to obtain progress payments in respect of that work. The Act thus establishes a default progress payment regime, and a complementary adjudication process in the event of dispute as to the amount to be paid. It also enhances the range of actions which may legitimately be taken by a contractor or subcontractor in the face of the refusal of a principal or head contractor to make timely payment. This article outlines the key provisions of the Act. In particular, it will look at the application of the Act, and the mechanisms by which progress claims are made and enforced. And, although there is as yet no case law concerning the Act, we will draw on some developments in the United Kingdom which may point to the direction New South Wales courts will take in dealing with adjudication of progress payment disputes.

The Act seeks to obviate a commonplace scenario in the building and construction industry. This is where a developer, on the basis of an unjustified claim or set-off, withholds payment to a contractor, or where a contractor does the same to a subcontractor. The Act undertakes to establish a regime within which contractors (in the case of a head contract) and subcontractors (in the case of a subcontract) who carry out construction work or supply related goods and services are entitled to receive, and are able to recover, a prescribed form of progress payment. The regime established by the Act is two-fold: it creates a statutory right to timely payment for work

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