Under the SOP Act, if you are not paid you have a protected right to suspend work on a project. This right is separate to any right you have under your contract.
Your protected right to suspend work under the SOP Act means if you do suspend work and your Head Contractor/Principal attempts to remove any work from your contract due to that suspension, you are entitled to claim for any loss or expense suffered as a result of the removal.
In addition, you will not be liable for any costs or losses suffered by your Head Contractor/Principal arising from your suspension If you suspend work under the SOP Act.
When can you suspend work?
You can suspend work in 3 scenarios, all related to your Head Contractor/Principal failing to pay you. Those scenarios are:
How do you suspend work?
Before you can suspend work, you must give your Head Contractor/Principal at least 2 business days’ notice that you intend to suspend work. That notice must specify which section of the SOP Act you are relying upon.
An interactive template draft suspension notice is included in this pack on the following page.
When do I have to go back to work?
After suspending work, you are required to recommence work within 3 business days of receiving payment in full from your Head Contractor/Principal.
In NSW (and most states and territories in Australia), a party contracts to carry out construction work (or supply related goods and services) is able to seek progress payments pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”). Oftentimes, the party required to pay (“the respondent”) disagrees with the amount claimed under the payment claim. In those circumstances, the Act requires the respondent to serve a payment schedule.
What is a payment schedule?
A payment schedule is the written notice required under section 14 of the Act. If the respondent disagrees with the amount claimed and refuses to pay the full amount of a payment claim, the Act requires the respondent to serve a payment schedule in writing stating the reasons for withholding payment.[1]
What constitutes a valid payment schedule?
A payment schedule must[2]:
What is the timeframe for serving a payment schedule?
Under the Act, if the respondent does not intend to pay the claimed amount in full by the due date, a payment schedule is required to be served within 10 business days after the valid payment claim has been served (or within the time required by the contract, whichever time expires earlier)[3].
What if the respondent failed to serve a valid payment schedule in time?
If a respondent does not intend to pay the claimed amount in full and fails to serve a valid payment schedule within the timeframe, then the claimant becomes liable to pay the claimed amount in full (See our article What is a “Statutory Debt” Under the Building and Construction Industry Security of Payment Act? for more details).
If you require further assistance or have any questions, please get in touch with our building and construction team.
[1] Section 14, Building and Construction Industry Security of Payment Act 1999 (NSW).
[2] Section 14 (2) and (3), Building and Construction Industry Security of Payment Act 1999 (NSW).
[3] Section 14(4), Building and Construction Industry Security of Payment Act 1999 (NSW).
The security of payment legislation in Australia is used help parties who has carried out construction works or supplied related goods and services to assist in the recovery of outhandling payments for what work or supplies they have provided. Each state and territory has their own slightly different legislation, but all are based on the New South Wales Act.
The New South Wales Act is the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) and it applies to anyone who has agreed to perform construction works or provide related goods and services. The Act applies to construction contracts that are formal written documents but also even informal arrangements (such as by text message or telephone call) where one party agrees to perform works for the other.
The Act creates a statutory entitlement to a monthly progress payment. This is a right that is separate to any right you have in your contract. It also creates the forum, known as Adjudication, where disputes over that statutory entitlement are heard.
In comparison to litigating a matter in court, the process under the Act is a far a quicker method to obtain an outcome (which can be enforced) if there is a dispute over a progress payment. Using the Act takes approximately 6 – 10 weeks start to finish. Typical building and construction disputes in Court will take 12 months or longer before you achieve an outcome.
Parties that are able to claim under the Act, known as Claimants are generally compromised of the following:
Adjudication allows a Claimant who believes that they are owed money under a construction contract, to promptly obtain payment from the respondent, based on an assessment of their claim to be decided by a qualified and independent adjudicator. Claimants use the Act securing payment without the need for extensive (and expensive) court hearings.
To commence a claim under the Act and proceed with the adjudication process, there must be a written valid payment claim made against a party to a construction contract for outstanding monies due.
If receiving a claim from a subcontractor, the “Respondent” must issue a valid payment schedule within 10 business days (unless the Contract provides for a shorter period) explaining why they are not paying the claimed amount. The consequences of not issuing a payment schedule can be significant.
If the Claimant is dissatisfied with the Respondent’s response, they can then file for Adjudication.
When using the Act, strict timelines apply and parties should consider obtaining legal advice to ensure they complying with the technicalities of the process under the Act as failure to comply may have serious financial consequences.
Contact our Building & Construction Law Team for any queries regarding the Building and Construction Industry Security of Payment Act 1999 (NSW).
You can make a payment claim to receive anything that is owed to you for construction work or goods and services you have provided under the terms of a contract or within the last 12 months (whichever is the later).
Section 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) (and relevant security of payment legislations in other states and territories), governs what a payment claim must include. Typically, provided you have complied with the Act, a regular monthly invoice will qualify as being also a statutory payment claim under the Act.
The checklist is similar except for the requirement to state that the claim is made under the Act.
Section 7 of the Act provides that a head contractor must serve a payment claim on the principal with supporting statement indicating that it relates to that payment claim. Payment claims made may also include relevant attachments for the Respondents reference such as:
A payment claim can only be issued once per month. The time for issuing a claim is either the date provided for in the contract (for example, the “25th of the month”) or if the contract doesn’t specify a date, the last day of the month.
A claim issued early will be invalid, however a claim issued after the relevant date has arisen (for example, the 25th of the month) will be valid provided it doesn’t try to claim for work that was performed after that date.
A progress claim must be made within 12 months from the last day the construction work was last carried out or when the related goods and services was last supplied, unless stated otherwise in the construction contract. In the case of a construction contract that has been terminated, only one payment claim may be served after date of termination.
Multiple payment claims can’t be made in relation to the same month. However, if a previous month’s payment claim remains unpaid, it can be included in a fresh month’s payment claim.
There are various ways you can challenge a Will. Some of the most common types of Will disputes are family provision claims and claims based on a Will being invalid.
Invalid Will claims are typically based on suggestions of suspicious circumstances around the making of the Will. Common reasons for a contested Will on grounds of invalidity include –
For a Will to be considered valid, the Will-maker must have knowledge of the content and be able to approve it. Therefore, the issue of validity may arise if the maker is given false or misleading information.
Wills can also be challenged as invalid if it is suspected that its fraudulent or was forged. Examples of fraud in will-making include when a maker is tricked into signing, or misled as to what was in the Will. Forgery refers to when one suspects the Will was not actually made by the Will-maker.
Certain legal requirements must be met for a Will to be considered formal and valid. These include that it must be made in writing, signed, and witnessed by two adult people who are present when the Will-maker signed it.
Who Can Challenge the Will?
Certain people can challenge a Will, including a person that has an interest in the estate and there are suspicious circumstances, or otherwise the grounds for a Will dispute are met. Prior to a Grant of Probate or Letters of Administration being given by the Court so the estate can be dealt with, a person looking to make certain claims can lodge what is known as a caveat with the relevant Supreme Court Registry. This works to notify the Court that there is an issue with the Will, and does not allow a Grant to be made until the caveat is withdrawn, challenge heard, or the Court overrides the caveat. It is also possible to contest a Will after a Grant has been made.
You need to be careful to ensure that you have reasonable grounds for bringing a Will dispute. If you bring a claim that is very weak or without merit, the Court will not look favourably upon you and there can be major, costly consequences. The following case is a good example of where a Will dispute should not have been brought.
Case Study: The Estate of Alberto Magri (No 2) [2022] NSWSC 1779
In the case of the Estate of Alberto Magri, Alberto’s six children and ex-wife were set to inherit the estate in equal parts according to his Will. At the time of her father’s passing, one of the children was involved in separate Court proceedings involving her own son and his father. This daughter chose to disclaim (i.e. reject) her inheritance, as she did not one want them to receive any of these moneys or for it be eaten up by court system, and signed a Deed to this effect.
The daughter later decided against this, and brought Court proceedings against the estate. She argued that the Will was forged, amongst other claims. Ultimately, the Court dismissed her claims for lack of merit. Further, due to the unreasonableness of the claims, the daughter was made to pay the legal costs and the Court ordered that this could come out of her interest in the estate.
On 22 February 2023, NSW declared its surcharge taxes inconsistent with several international treaties. Western Australia has not issued any similar announcement, and the WA foreign surcharge regime remains unchanged.
Western Australia imposes a Foreign Buyer Duty surcharge of 7% on the acquisition of residential property by foreign individuals, foreign corporations and foreign trusts. This surcharge applies in addition to standard transfer duty.
WA does not impose a foreign owner surcharge land tax, but its Foreign Buyer Duty surcharge continues to apply to residential purchases.
There has been no government or court finding that WA’s surcharge is inconsistent with treaties involving New Zealand, Finland, Germany or South Africa, and no refund mechanism has been announced.
If you are a citizen of New Zealand, Finland, Germany or South Africa and have paid Foreign Buyer Duty in Western Australia, please contact our Perth conveyancing team to discuss whether any relief or restructure options are available.
ACT Property Transactions Unaffected: No Foreign Surcharge Duties Apply
On 22 February 2023, NSW announced that its Surcharge Stamp Duty and Surcharge Land Tax were inconsistent with international treaties. The ACT does not impose any equivalent foreign surcharges, meaning this issue does not arise in the ACT.
The ACT does not charge foreign purchaser surcharge duty or a foreign owner surcharge land tax.
All buyers, including Australian citizens, permanent residents and foreign citizens, pay the same duty and land tax rates.
As the ACT does not impose foreign surcharges, there is no inconsistency with international treaties, and no refund process applies for foreign purchasers or foreign owners.
If you are a citizen of New Zealand, Finland, Germany or South Africa and own or intend to purchase land in the ACT, our Canberra conveyancing team can advise you on ACT-specific duty, land tax and leasehold requirements.
Queensland Foreign Surcharges Remain Fully Enforced Despite NSW Treaty Ruling
On 22 February 2023, the NSW Revenue Office confirmed that its Surcharge Stamp Duty and Surcharge Land Tax were inconsistent with certain international treaties. Queensland has not made any similar announcement, and Queensland’s foreign surcharge regime remains fully in force.
Queensland imposes Foreign Acquirer Duty (FAD) on foreign individuals, companies and trusts acquiring residential property. This surcharge is an additional 7% on top of ordinary transfer duty. Queensland also imposes the Absentee Owner Surcharge Land Tax, which applies annually at an additional 2% to the taxable land value for foreign individuals who do not ordinarily reside in Australia.
Unlike NSW, Queensland has not recognised any exemptions for citizens of New Zealand, Finland, Germany or South Africa, nor have any courts declared Queensland’s surcharge obligations inconsistent with treaty arrangements.
Foreign purchasers or landholders should assume that all Queensland surcharges continue to apply, and no refunds are currently available.
If you are a citizen of New Zealand, Finland, Germany or South Africa who has paid Foreign Acquirer Duty or Absentee Owner Surcharge Land Tax in Queensland, please contact our Brisbane conveyancing team to discuss your circumstances.
NSW Surcharge Duties Declared Inconsistent with International Treaties
On 22 February 2023, the NSW Revenue Office has released a statement confirming that the NSW Revenue Office’s imposition of Surcharge Stamp Duty & Surcharge Land Tax in relation to property within NSW is inconsistent with an international treaty that was entered into by the Federal Government with the governments of New Zealand, Finland, Germany & South Africa.
Surcharge Stamp Duty is imposed on foreign citizens who buy property in NSW at the time of purchase. The surcharge was as much as an additional 8% of the price of the property. Surcharge Land Tax is a yearly tax that is imposed on foreign citizens who continue to own property in NSW. The current tax rate is 4% of the rateable value of the property. These surcharges may also be imposed on foreign citizens who also hold a permanent residency visa in Australia.
The NSW Revenue Office will no longer require the payment of Surcharge Stamp Duty or Surcharge Land Tax for citizens of New Zealand, Finland, Germany & South Africa. This may also apply to foreign corporations, trusts and partnerships that have affiliations with these nations.
If you are a citizen of New Zealand, Finland, Germany or South Africa and paid Surcharge Stamp Duty or Surcharge Land Tax on property within NSW after 1 July 2021, please get in contact with our Sydney conveyancing team or Newcastle conveyancing team, as you may be eligible for a refund.
When an employee is hired, they are generally required to provide any relevant documentation or information which may impact their ability to work for the employer. It is important that an employee understands what pre-employment representations are required to be disclosed prior to commencing employment as often failure to disclose can result in disciplinary action, including termination. Common examples of pre-employment representations that are included in most contracts of employment include representations with respect to skills and qualifications, as well as representations with respect to fitness for work and medical conditions that may impact the employee’s ability to perform the inherit requirements of their position.
In circumstances where an employee brings a general protections claim alleging they have been subject to adverse action (including termination) due to their disability or on other discriminatory grounds, section 351 of the Fair Work Act 2009 (Cth) emphasises that the Court must be satisfied that the reason for the employee’s termination was due to their physical or mental disability or other discriminatory grounds. In that regard, it was confirmed in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (Barclay), that:
“the question of why an employer took adverse action against an employee is a question of fact arising from the operation of interdependent provisions of the Fair Work Act.”
As such, where an employee, during the course of employment, is diagnosed with a physical or mental health condition, the employee generally has a direct obligation to notify their employer of the diagnosis. Such notification must be done seriously. As was noted in Barclay, the employee sending a text message stating that he was “an autistic freak of nature” was not as a full and frank disclosure of his medical condition.
Recently in Debus v Condor Energy Services Limited [2022] the Court was required to examine an employee’s claims of disability discrimination. The employee claimed that their employment was terminated during the probation period on account of disability discrimination as the employee suffered mental health issues and was diagnosed with autism.
In that case, the employment conditions required the employee to acknowledge that they had made full and frank disclosure of information such as any mental or physical disability and any prescribed medication the employee was required to take. The relevant employment condition stated:
“by accepting this offer you confirm that you have disclosed to the Company all information including medical and worker’s compensation information that could reasonably be held to be relevant to your ability to safely and competently perform your role”.
Despite the employee signing and acknowledging this employment condition, in examining the facts, the Court found that the employee did not disclose their mental health issues to the employer and other medical conditions, including the employee’s diagnosis of autism. As a result, the employee’s claims of disability discrimination were dismissed.
Key Takeaways
This article was prepared with the assistance of Ebony Billett.