Romaldi’s challenge to the enforceability of the adjudicator’s decision in Adelaide Interior Linings has been rejected by the Full Court.

The decision is here: Romaldi v AIL [2013] SASCFC 124

The amendment proposed by the opposition to the Building and Construction Industry Security of Payment Amendment Bill 2013 (NSW) has been accepted, and the Parliament website reports that the Bill is now awaiting Assent.

What happens next? Well, presumably there will be Assent, but logic would suggest that the amendments will not be proclaimed until the necessary regulations have been prepared, and these are going to be the subject of further industry consultation Continue reading →

I posted earlier on the amendments proposed in NSW to their Security of Payment legislation.

Yesterday, the opposition got through an amendment in the Legislative Council, giving the power for the government by regulation to legislate for statutory retention money trusts.

The Hansard debate makes for frightening reading. Continue reading →

The Road to Hell

In February of 2013, Bruce Collins QC’s final report into insolvency in the construction industry in New South Wales was released. It was a lengthy thought-provoking document which canvassed a number of interesting ideas about how the problem of construction insolvency might be addressed. It made some 44 recommendations, central to many of which was the concept of a statutory construction trust.  The idea of such a trust is hardly at the libertarian end of the spectrum – it is to say that a party who undertakes to carry out work for a principal for an agreed sum is not permitted to be paid that sum. Instead, it must be paid into a trust, so it may be shared out among other parties who have undertaken part of the work as subcontractors. It is a bold notion which has gained some traction in large government contracts in the UK[1], but not one which the NSW government is presently prepared to embrace.  Instead, it has cherry-picked a number of the other recommendations out of the report. These are embodied in the Building and Construction Industry Security of Payment Amendment Bill 2013 which, at the time of writing is rapidly passing its way through the legislative process.

Bizarrely, the Bill is anathematic to the central recommendation of the construction trust, and seems set, if passed, not only to reduce the effectiveness of the existing Security of Payment legislation, but itself being the cause of increased insolvency and to cause a mass criminalisation of the NSW construction market. This article examines how Bill works, and why there is good reason to fear these results. Continue reading →

This short paper has just been published in Australian Construction Law Newsletter:

Three Early Security of Payment Cases in South Australia

 Robert Fenwick Elliott[i]

The Building and Construction Industry Security of Payment Act 2009 (SA) (closely modelled on the NSW Act) was enacted in December 2009, but challenges under it have only just started reaching the courts.  In part, this is because the Act does not apply to contracts entered into before 10th December 2011, and in part because it has taken a while for potential cases to work their way through the system.  But there have now been three cases which provide an early indication of the reception that the Act has received from the courts.

The Adelaide Interior Linings case first came before the District Court as Romaldi Constructions v Adelaide Interior Linings [2013] SADC 39 (3 April 2013).  Judge Barrett granted an injunction restraining the enforcement of the determination for $51,219.83, saying:

 I find that there is a real risk of the defendant’s inability to repay the adjudication sum if the injunction is not granted. I find that the balance of convenience favours the granting of the injunction.

The decision was remarkable, because Continue reading →