Impact of the Security of Payment Act in New South Wales on clients, contractors and subcontractors

Transcription

1 Impact of the Security of Payment Act in New South Wales on clients, contractors and subcontractors Thomas E Uher, Faculty of the Built Environment, The University of New South Wales ( t.uher@unsw.edu.au) Michael C Brand, Faculty of the Built Environment, The University of New South Wales ( michaelb@fbe.unsw.edu.au) Abstract The Building and Construction Industry Security of Payment Act 1999 (NSW) ( the Act ) was introduced primarily to improve security of payment for small scale subcontracting firms. Nevertheless, the aim of the study was to examine the impact of the Act on subcontractors, contractors and clients in New South Wales ( NSW ). Data for the study comes from a review of relevant literature by authors in the security of payment field, on-going research by the authors, data collected and published by the NSW Department of Commerce, and face-to-face interviews conducted by the authors with three expert adjudicators in NSW. From subcontractors perspective, the impact of the Act has been largely a positive one with subcontractors being highly successful at adjudication. Contractors, on the other hand, have been exposed to ambush claims by subcontractors, which is viewed as an unintended result of the strict time demands the Act places on the parties. Whilst no direct evidence is available to reliably establish the impact (if any) of the Act on client organisations, there is an emerging trend that clients most commonly schedule to pay $nil in response to payment claims. Further research is needed to establish the reasons for this trend. Keywords: Adjudication, Impact, New South Wales, Security of payment 1. Background 1.1 Introduction of the Act The main reason for the introduction of the Building and Construction Industry Security of Payment Act 1999 (NSW) (hereafter referred to as the Act ) was to improve security of payment of small scale subcontracting firms by eradicating the practice of clients and contractors of arbitrarily delaying or denying payment [1]. While subcontractors are seen as the main benefactors of the Act, the provisions of the Act also extend to contractors, suppliers of materials and suppliers of services, who also experience security of payment problems. The only party excluded from the provisions of the Act are clients who enter into a construction 1274

2 contract for the carrying out of residential building work whereby the client resides in, or proposes to reside in, the residential building. It is generally accepted that parties to the construction industry who seek payment under a construction contract for work carried out, services rendered or materials supplied experience consistent failure in receiving payment [2]. This practice not only affects profitability of those parties but it also causes serious cash flow problems particularly to smaller firms [3]. The Act sets out to ensure that any person who undertakes to carry out construction work or who undertakes to supply related goods and services under a contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services [4]. The provisions of the Act are designed to reduce or eliminate delay in payment by introducing a range of revolutionary measures such as: a statutory right to progress payment; the use of default provisions for progress payment in the absence of express contractual provision; nullifying the effect of pay when paid and paid if paid clauses in a contract; introducing a fast process of notification and adjudication where a claim is disputed; giving security for a disputed payment when so determined by an adjudicator; and giving a claimant a statutory right to suspend work and the right to lien over unfixed materials [5]. The Act is the first security of payment legislative scheme introduced in Australia. It is based on the philosophy of rapid adjudication of payment claim disputes introduced in the UK in the form of the Housing Grants, Construction and Regeneration Act However, the NSW Act is substantially different in its structure and operation from its UK counterpart. Following the NSW example, similar legislative schemes have since been introduced in Victoria, Queensland, Western Australia, New Zealand and Singapore, with Malaysia planning to introduce its own legislation in the near future. This paper examines the impact of the Act on the main parties to the New South Wales construction industry, namely, subcontractors, contractors and clients. Data for this paper comes from the literature review, on-going research by the authors and the information on the operation of the Act published by the NSW Department of Commerce. 1.2 Overview of the Act The Act establishes a law that operates separately from, but in parallel with, a construction contract. A claimant of a progress payment claim may elect to seek a payment claim under the contract or under the Act. A payment claim, which is not endorsed as a claim under the Act, is processed strictly in accordance with the provisions of a contract. However, a payment claim endorsed as being made under the Act gives the claimant access to powerful provisions of the Act, which, in some cases, over-ride terms of a contract. The parties are unable to contract out of the Act [6]. The Act applies to any construction contract, whether written or oral, or partly written and partly oral [7]. The provisions of the Act include, inter alia: a statutory entitlement to progress payments regardless whether the relevant construction contract makes provision for 1275

3 progress payment [8]; nullifying the effect of pay when paid and paid if paid clauses in a construction contract [9]; imposing a fast process of notification leading to adjudication of a payment claim where a claim is disputed [10]; giving a claimant a statutory right to suspend work [11]; and giving a claimant a statutory right to exercise a lien over unfixed plant or materials supplied by the claimant [12]. The Act provides a mechanism for resolving payment claim disputes in a quick and inexpensive adjudication. This involves having the matter determined by a neutral adjudicator and ensuring that an adjudicated amount of payment claim is recoverable by the claimant. The Act intended that an adjudicator s determination as to payment of a progress claim was to be merely interim pending final determination of the dispute in other proceedings. The intent was, however, misunderstood by the NSW courts in the first few years of the operation of the Act, insofar as the courts regarded an adjudicator as a quasi-judicial tribunal and decisions of adjudicators as final. For reason of error of law the courts set aside many adjudication determinations. The decision of the NSW Court of Appeal in Brodyn Pty. Ltd. trading as Time Cost and Quality v Philip Davenport & Ors [2003] NSWCA 394 reinstated the original intent of the Act and consequently removed the possibility of setting aside adjudication determinations for reason of error of law. However, respondents have been successful in exploited other apparent ambiguities in the Act upon which the courts continue to declare adjudication determinations void. This issue lies outside the scope of this paper and will not be discussed any further. The evolution of the security of payment law in the NSW construction industry can be found in Uher & Brand [13]. The Act requires that if the respondent disputes the claimant s payment claim, which the claimant endorsed as a claim under the Act, the respondent is required to provide the claimant with a payment schedule within 10 business days of the claim being served. The payment schedule is a written response to the payment claim in which the respondent details the reasons for withholding payment. If the respondent chooses not to provide a payment schedule and not to pay the claimed amount by the due date for payment, the claimed amount becomes a statutory debt. The claimant may then either: (a) proceed to recover a statutory debt due in a court of competent jurisdiction; or (b) to have the dispute determined by an adjudicator. In case the claimant chooses to have a payment dispute determined by an adjudicator, the claimant is required to issue a notice to the respondent that the claimant intends to have a payment claim dispute referred to adjudication. By virtue of the notice, the respondent is given a second chance to provide a payment schedule within 5 business days. Thereafter, the claimant would lodge and adjudication application to the Authorised Nominating Authority (ANA) within the time specified in the Act. The ANA will appoint an independent adjudicator to determine the payment dispute. Only if the respondent has issued a payment schedule, the respondent is permitted by the Act to substantiate the reasons for withholding payment in an adjudication response lodged with the adjudicator. Not later than 10 business days of the adjudicator s acceptance to adjudicate the matter, the adjudicator will issue to the parties an adjudication determination. 1276

4 If the respondent fails to pay the adjudicated amount to the claimant within the time specified by the adjudicator, the claimant may request the ANA to issue a certificate of adjudication. When filed in a court of competent jurisdiction, the adjudication certificate automatically becomes judgement for the adjudicated amount, without the need for a summons or a hearing. Furthermore, the Act provides a claimant with a right to suspend work pending payment, and a right to exercise a lien over unfixed plant or materials supplied by the claimant to the extent of the unpaid amount of the progress claim. Observance of the strict time constraints in which claimants, respondents and adjudicators are required to operate is the essence of the Act. The consequence of non-compliance with the time constraints may result in rights, otherwise available to claimants and respondents under the Act, being lost [14]. 2. Impact on Subcontractors The underlying objective of the Act is to give subcontractors (as claimants) a right to make, and a process to recover, progress payments. Subcontractors, particularly the small ones, are expected to benefit most from the provisions of the Act. Because of their limited financial resources, they are commonly unable to pursue recovery of progress payments through arbitration, litigation or other dispute resolution mechanisms under the contract and apart from withdrawing labour services, have no other means of recovering delayed payments. Needless to say, unscrupulous contractors are able to take full advantage of financially weak subcontractors by delaying or devaluing payments without good reason. Payment claims that fall under the provisions of the Act are those that have been endorsed as payment claims under the Act. Thus, claimants are free to decide whether or not they intend, should the need arise in the future, to rely on the Act in pursuing recovery of a progress payment. To be able to exercise the option of either endorsing or not endorsing a payment claim under the Act, a claimant needs to be familiar with the Act and its provisions. According to Brand & Uher [3] this is not always the case as small sized subcontractors are often the least knowledgeable group of claimants of the essential requirements of the Act. They reported that only 33% of the subcontractors surveyed endorsed payment claims under the Act. Accepting that the aim of the Act was to improve security of payment of predominantly subcontracting firms operating in the NSW construction industry, it was anticipated that subcontractors would be the most frequent claimants under the Act. This hypothesis was verified by the literature. Two surveys carried out by the authors in NSW show between 53% and 71% of all claimants to be subcontractors [15]; [16], while in Queensland, where almost an identical security of payment legislation operates, subcontractors account for around 63% of all claimants [17]. 1277

5 While subcontractors are mainly claimants under the Act by virtue of being near or at the end of the supply chain, it is possible that where they further sublet work under their subcontracts, they may become respondents to payment claims made by their sub-subcontractors. The Queensland experience shows that this occurs in only about 4.7% of cases. No statistics on this issue are available for NSW. However, unpublished research by the authors suggests that subcontractors account for up to 10% of respondents. Statistics published by the NSW Department of Commerce [18] show that claimants are highly successful in adjudication under the Act. The data shows that claimants are fully successful (i.e., they receive the full amount claimed) in about 43% of all adjudication determinations and that they receive at least a half of the claimed amount in about 74% of all adjudication determinations. On average, for all adjudication determinations made in NSW, claimants receive around 70% of the claimed amount. The Department s statistics also show that claimants making smaller claims are more successful than those making larger claims; see Table 1. For example, for payment claims less than $5,000 in value claimants recover on average around 89% of the claimed amount, while for large claims of over $750,000 in value they only recover on average 24% of the claimed amount. Table 1: Average claimed, scheduled and adjudicated amount Range of claims determined (AUD) Av. Claimed (AUD) Av. Determined (AUD) (% of Av. Claimed) < 5,000 2,920 2,604 (89.2%) 5,000-9,999 7,318 6,582 (89.9%) 10,000-24,999 16,688 13,300 (79.7%) 25,000-39,999 31,968 25,816 (80.8%) 40,000-99,999 63,634 44,714 (70.3%) 100, , ,381 99,446 (62.4%) 250, , , ,112 (73.0%) 500, , , ,014 (52.7%) 750,000 9,456,585 2,291,368 (24.2%) Considering that a majority of claimants are subcontractors, the above statistics clearly confirms that subcontractors are highly successful in adjudication under the Act, particularly those making smaller payment claims. Because of their high rate of success in adjudication, subcontractors (as claimants) are not expected to pay a high share of the adjudication fees. Although no statistics are available for NSW, Uher & Brand [16] reported that only around 5% of claimants and 79% of respondents were required to pay the full amount of adjudication fees. In the remaining cases the parties shared the cost of adjudication. They also reported that it is common practice among 1278

6 adjudicators to require the losing party to adjudication to pay the full amount of adjudication fees. The Queensland experience suggests that claimants pay on average 23% of the adjudication fees and, for payment claims under $5,000, as low as 1.42% [17]. The Queensland statistics shows that claimant s share increases with an increase in the amount claimed. For example, claimants share of the adjudication fee with regard to payment claims in excess of $50,000 is on average around 30%. This indicates that claimants are less successful in securing a satisfactory outcome from adjudication of large payment claims. In-depth knowledge of the Act not only help subcontractors (as claimants) to comply with relevant provisions of the Act in their effort to improve the probability of a successful adjudication outcome, but it may also encourage them to use the Act to their advantage. Kennedy [19] alludes to the ambush scenario employed by claimants in the UK construction industry. He describes two instances of ambushes: (i) when a payment claim is made against the respondent at the most inconvenient time for the respondent or (ii) when a claimant makes a payment claim prepared over a period of time, which is supported by a large volume of information and documentation. There is no published information available which would confirm presence of the above two instances of ambushes in NSW. However, there is no shortage of anecdotal evidence indicating the prevalence of ambush claims being made under the Act. For the purpose of gathering data on the issue of ambushes, the authors conducted face-to-face interviews with three expert adjudicators in NSW. The adjudicators interviewed agreed anonymously that the practice of ambushes is ripe in NSW. Specifically, they identified the period just prior to Christmas shut-down period as being popular for the lodgement of payment claims. Since a respondent has only 10 business days to provide a payment schedule in response to a payment claim, and in consideration of the fact that January is a common holiday period for construction industry organisations, the possibility that a respondent may fail to provide a payment schedule is being exploited. The expert adjudicators agreed that this practice is employed by both subcontractors and contractors. They also agreed that there is evidence of the use of elaborate payment claims prepared by claimants over a long period of time with the assistance of claim consultants. When such a payment claim is made, the respondent has only 10 business days to prepare a payment schedule and, after the claimant lodges an adjudication application, only 5 business days to prepare a detailed adjudication response. Clearly, while the claimant is able to prepare a claim over a long period of time, the respondent is constrained by the Act in preparing a detailed defence within a relatively short time frame. According to the expert adjudicators, this practice is perpetrated mainly by contractors. Another example of the alleged abuse of the Act by claimants is referred to as adjudicator shopping. Davenport [20] reports that when a claimant is dissatisfied with the result of an adjudication determination by one adjudicator, the claimant is free to submit the same claim to a second adjudicator, hoping for a better result. The Act attempts to prevent adjudicator 1279

7 shopping by requiring that, in determining the adjudication application, the adjudicator gives the work the same value as that previously determined. For example, if the first adjudicator determines the value of work to be $10,000, in a subsequent adjudication the second adjudicator is required to give the work the same value of $10,000 unless the adjudicator is satisfied that the value of the work has changed. However, if the first adjudicator rejects a variation claim because in the adjudicator s opinion the alleged work was not a variation, it is arguable whether or not the first adjudicator actually determined the value of that claim. It may well be that the second adjudicator may allow the claim if deciding that it was a valid variation. Whilst Davenport [20] does not explain whether adjudicator shopping is wide spread, he points to a number of legal cases that indicate that this practice is being employed by contractors. While it has been shown that subcontractors experience success in pursuing payment claims through adjudication under the Act, Uher & Brand [15] reported that only about a half of subcontractors, who have pursued a payment claim under the Act are satisfied with the adjudication process, particularly in relation to its time and cost efficiency. This finding may, at the first glance, appear to be surprising considering that subcontractors have largely been successful at adjudication. However, in the context of the results of the authors previous research [3], which uncovered low level of knowledge and understanding of the adjudication process among subcontractors, it may well be that subcontractors have an unreasonably optimistic expectations of what the Act can deliver. The Act neither guarantees payment to subcontractors of the full amount claimed nor does it guarantee any payment. It only provides a powerful mechanism for a rapid and inexpensive resolution of payment claim disputes. It prescribes the manner in which claimants must prepare and serve payment claims and adjudication applications, and the time frame for making them. Non-compliance with such provisions may invalidate a payment claim or some parts of it, or may reduce the claimant s entitlement to payment. It is suggested that subcontractors satisfaction with the adjudication process under the Act could be greatly enhanced through improved level of knowledge of the main provisions of the Act. In conclusion it is evident that subcontractors are benefiting from the Act. More effort is however needed to enhance knowledge of the Act among particularly small sized subcontractors to improve their awareness of the benefits of the Act. 3. Impact on Contractors The role of contractors as claimants under the Act was briefly referred to previously. Under the main contract, contractors make progress payment claims against clients, and those claims when endorsed under the Act, may be pursuit through adjudication. Although the NSW Department of Commerce does not report the proportion of adjudication applications submitted by contractors (as claimants) against clients, the research of Uher & Brand [16] suggests that contractors represent around 22% of all claimants. However, the predominant role of contractors under the Act is that of respondent. 1280

8 It was previously established that claimants, as both subcontractors and contractors, are generally highly successful in adjudication of payment claims. It emerges from Table 1 that claimants of larger payment claims, who presumably are contractors, have been less successful than claimants of smaller claims. The reason for large payment claims being less successful in adjudication than smaller claims is unclear. Assuming that large payment claims are predominately made by contractors, it may well be that such claims are either more vigorously defended by clients, or inflated, or both. Brand & Uher [3] reported that the cost of preparing large payment claims (in terms of their dollar value) is considerably higher than the cost of preparing small claims. Although no data is available on the cost of responding to payment claims, it seems plausible to assume that such cost would be relatively high for large payment claims. Brand & Uher [3] reported that claimants are assisted by law firms or claim consultants in the preparation of large payment claims. If claimants seek assistance of lawyers or claim consultants, it is logical that respondents would do the same. The presence of lawyers or claim consultants in mounting a response to a large payment claim would support the proposition that large payment claims are more vigorously opposed, which could account for their lesser success at adjudication. Furthermore, the expert adjudicators interviewed by the authors confirmed the presence of ambushes, particularly those involving very large payment claims supported by voluminous written submissions. Although respondents have only a very limited time to respond to such claims, with the aid of specialist law firms they are able to mount a formidable defence. According to the expert adjudicators, the potential for uncovering parts of such large payment claims which, for example may over-value the work claimed, or may include unapproved variations, or may be unsubstantiated, is relatively high. Assuming that adjudicators are consistent in arriving at their determinations irrespective of the amount claimed, the authors are inclined to conclude that a vigorous defence mounted by respondents in defence against large payment claims is a contributing factor for such payment claims being less successful for claimants at adjudication. Based on the data in Table 1, which shows that the average adjudicated amount is about 70 percent of the average claimed amount across the whole range of claims determined, and taking views of the expert adjudicators into account, there can be no doubt that claimants attempt to inflate payment claims, particularly in the case of larger claims. To what extent small payment claims are inflated (if at all) is unclear. Considering that small size subcontractors working knowledge of the Act and its requirements is generally only superficial, and that they do not generally seek assistance from lawyers in making payment claims and lodging adjudication applications [3], it may well be that the reason for the reduction in the value of small payment claims at adjudication is the failure of claimants to fully substantiate payment claims. While the Act has over its first six years of operation in NSW markedly improved security of payment, it 1281

9 has thus far been ineffective in preventing claimants from inflating and respondent from undervaluing payment claims. Uher & Brand [15] reported that contractors (as claimants) are generally satisfied with the operation of the Act. However, the authors unpublished survey of a small sample of respondents suggests that in the role of respondents to payment claims, contractors are less satisfied with the Act. This is not an unexpected result considering that as respondents contractors are largely unsuccessful at adjudication. The reason for contractors being more successful as claimants than respondents at adjudication is unclear. As a potential claimant and respondent, they would be expected to be familiar with the Act and have in-depth knowledge of the Act s various provisions. It is open to conjecture as to why contractors, as respondents, generally fail at adjudication. It may well be that contractors simply have little or no time to respond to payment claims endorsed under the Act and may well be due to a large number of payment claims being made in the same claim period. Since contractors are required to issue a payment schedule within 10 business days of receiving a payment claim, the sheer number of claims and the limited time available for their processing may require contractors to focus on defending larger payment claims as their top priority at the expense of smaller ones. This may also explain why contractors, as respondents, fail to issue a payment schedule. The failure to issue a payment schedule dramatically weakens respondents ability to defend against a payment claim because the Act bars respondents making a submission to the adjudicator in the form of an adjudication response. Based on a research sample of 98 adjudication determination, Uher & Brand [16] reported that about one quarter of the respondents did not issue a payment schedule in response to a payment claim. Of those respondents, 77% were required by adjudicators to pay to claimants the full amount of payment claim; the consequence for not issuing a payment schedule is clearly an onerous one. Another interesting outcome of Uher & Brand s research [16] is that when respondents provide a payment schedule, they most commonly schedule the amount that they are prepared to pay as $nil; see Table 2. The least preferred amount that respondents are prepared to pay is the full amount of a progress payment claim. They found that clients are more likely to schedule to pay a $nil in a payment schedule when responding to a payment claim from contractors than contractors who respond to a payment claim from subcontractors. They explained that the reason for that trend is likely to be related to contractors superior knowledge of contract conditions, which enable contractors to make a realistic assessment of subcontractors entitlement to payment under the contract. It may also be that contractors superior knowledge of the Act helps them to realise the futility of denying payment in the presence of powerful provisions for recovery of payment in the Act. 1282

10 Table 2: The amount of payments specified by respondents. Scheduled amount as a % of claimed amount Frequency 0% (nil payment) 45 (62.5%) < 100% (partial payment) 21 (29.2%) 100% (full payment) 6 (8.3%) TOTAL 72 (100%) Probably the most detrimental provision of the Act from the contractors point of view is barring of a pay when paid provision in a construction contract. Contractors have relied extensively on a pay when paid clause in subcontract conditions to improve their cash flow to the detriment of subcontractors. Although contractors continue to insert such a clause into subcontracts documents, they are unable to rely on it in an attempt to delay payment to a subcontractor, when a payment claim is endorsed under the Act. Contractors are therefore required to more carefully plan and manage their cash flow considering that they may need to pay their subcontractors prior to receiving payment for the same work from the client. They also need to ensure that the terms of payment are defined in subcontract documents; otherwise the default provisions of the Act for making a payment claim and for the due date for payment, which are the last day of the named month and 10 business days respectively, would apply. In sum, the unique role of contractors under the Act as both claimants and respondents gives them the opportunity to better understand the operation of the Act and its various provisions, and use that knowledge in better defending against payment claims from subcontractors and maximising the adjudicated amount of progress payment claims served on clients. 4. Impact on Clients No published information whatsoever is available on the impact of the Act on client organisations. The authors will attempt to extrapolate the data from their previous research studies to draw some inferences of the likely impact of the Act on clients. They will also rely on the expert advice provided by the three adjudicators interviewed. As discussed previously, the frequency of issuing a payment schedule by clients is similar to that of contractors. However, it was noted that clients most commonly schedule to pay $nil in response to a payment claim. The reason for this is the subject of speculation. It is common knowledge that construction clients often withhold payment as a result of a dispute with a contractor under the main contract, whether that dispute is related to a progress payment claim or not. It is possible that clients employ the same approach even when a payment claim is endorsed as a payment claim under the Act. It may be that they are not aware of the fact that since the Act is only concerned with payment claim disputes in relation to a construction contract, other disputes between the parties cannot be used as a reason for withholding payment. This conclusion is plausible considering that respondents will, on average, pay at least 24% of 1283

11 the claimed amount in adjudication; see Table 1. It may also be that clients reason for scheduling to pay $ nil in the payment schedule is their reaction to what they perceive to be an ambit payment claim. Further research is needed to provide an objective explanation of this trend. An interesting aspect of the Act is that it excludes construction contracts for carrying out of residential building work where a client or owner of that residential building resides in or proposes to reside in. The rational behind this is that residential clients may not be familiar with the Act and its provisions, and thus could potentially fail to issue a payment schedule, the result of which could have serious consequences to such clients. However, while a payment claim made by a contractor against a client residing in a residential building is not a valid payment claim under the Act, payment claims of subcontractors against the contractor are, provided they are endorsed under the Act. It means that while subcontractors may rely on the adjudication process under the Act to recover payment, the contractor is denied assess to the Act. Perhaps this imbalance will need to be redressed in future revisions of the Act. 5. Conclusions From subcontractors perspective, the impact of the Act has been largely a positive one. Subcontractors (as claimants) have been highly successful at adjudication under the Act, particularly those making smaller payment claims. However, despite the positive impact, subcontractors generally have been shown to have a low level of working knowledge and understanding of the adjudication process. Thus, the extent of the positive impact is unclear. The impact of the Act on respondents, both contractors and clients, appears to be much less positive; respondents success rate at adjudication is relatively low while respondents share of the adjudication fees, as determined by the adjudicator, is higher than that of claimants. Of concern for respondent contractors and clients is the emerging practice of claimants to submit ambush claims, which arise by virtue of the strict time constraints imposed on the parties by the Act, and the practice of adjudicator shopping by unsatisfied claimants to a previous adjudication. Both of these practices, whilst not illicit under the Act, were clearly not intended to arise. Finally, no direct evidence is available to reliably establish the impact (if any) of the Act on client organisations. In addition to being subject to ambush claims and adjudicator shopping in the same way as respondent contractors, it emerges that clients most commonly schedule to pay $ nil in response to payment claims. Reasons put for this trend are that clients are likely to have superior knowledge of contract conditions and superior knowledge of the Act than contractors. However, further research is needed to firmly establish the reasons for this trend. 1284

12 References [1] Iemma, Rt. Hon. (1999) Second Reading Speech (Hansard), Building and Construction Industry Security of Payment Bill (NSW), NSW Legislative Assembly, 8 September. [2] Commonwealth of Australia. (2002) Royal Commission into the Building and Construction Industry: Security of Payment in the Building and Construction Industry, Discussion Paper 12, Canberra. [3] Brand, M. C. and Uher, T. E. (2004) The performance of the Security of Payment Act in the Australian construction industry, in Elmahdy H, (Ed.), proceedings of the CIB World Building Congress, Toronto, Canada, CD-ROM, Paper 250. [4] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 3. [5] Cahill, R., Leacock, R., Ellis, J. and T. Reed. (2000) Security of payment: the Building and Construction Industry Security of Payment Act 1999 (NSW), Australian Construction Law Newsletter, Issue 71 (May/June), pp [6] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 34. [7] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 7. [8] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 3(2). [9] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 12. [10] Building and Construction Industry Security of Payment Act 1999 (NSW), ss [11] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 27. [12] Building and Construction Industry Security of Payment Act 1999 (NSW), s. 11(3). [13] Uher, T. E. and Brand, M. C. (2007) The evolution of adjudication law in the construction industry in New South Wales, proceedings of the CIB 2007 World Building Congress, Cape Town, South Africa, May, pp [14] Davenport, P. (2004) Adjudication in the building industry, The Federation Press, Sydney. [15] Uher, T. E. and Brand, M. C. Claimant s view of the performance of adjudication in New South Wales, accepted for publication in Journal of Engineering, Construction and Architectural Management on 19/09/06. [16] Uher, T. E. and Brand, M. C. (2005) Analysis of adjudication determinations made under security of payment legislation in New South Wales, International Journal of Project Management, 23(6), pp [17] Anon. (2007) Claimant and respondent statistics, Building and Construction Industry Payments Agency (BCIPA), Report month January [18] Anon. (2006) Building and Construction Industry Security of Payment Act 1999 progress report. Reporting Month 30 June 2006, NSW Department of Commerce, Sydney. 1285

13 [19] Kennedy, P. (2005) A small step towards zero payment-default but a giant leap towards greater efficiency, proceedings of the International Forum on Construction Industry Payment Act and Adjudication, September 2005, Kuala Lumpur, CIDB, pp [20] Davenport, P. (2006) Adjudicator shopping, Australian Construction Law Newsletter, Issue 111 (Nov/Dec), pp