Payment Disclaims

I posted a while ago about the recent changes to Security of Payment Legislation in NSW in The Road to Hell.  The changes came into effect for the purposes of contracts entered into from 21st April this year.  One of the changes is to remove the requirement that payment claims state that they are made under the Act; potentially, any document which identifies some work done and puts a price to it might be a payment claim.

That is bad news for head contractors, not least because it is now a criminal offence for them to make a payment claim that is not accompanied by “supporting statement” saying what amounts have been paid, and what claimed amounts have not been paid, to subcontractors (there is a prescribed form for this in the new Regulation).

Despite a determined effort by the new amendments to muddy the waters as between statutory entitlements and contractual entitlements, I wonder how many NSW head contractors will be adding wording like this to their contractual applications for interim payment:

This is not a payment claim under section 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW), and no sum is hereby claimed to be due pursuant to section 8 of that Act.

By expressly disclaiming in this way, a head contractor will presumably be free to get on with life as normal – making his contractual claims for payment without having to serve a section 13(7) statement.  On those rare occasions when he wants to make a claim under the Act, he will simply add a statement to the opposite effect.

Shortly, SoCLA will be having a session in NSW on this topic, at which I will contribute. Feedback on this would be welcome

2 thoughts on “Payment Disclaims

  1. We don’t need any more additional paperwork to an already overloaded red tape filled industry!

  2. Pingback: Babushka Contracting | Robert Fenwick Elliott

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