Security, but no Master Key

By far the majority of my work, these days, is either interstate or international. In even a dispute arising under the biggest South Australian project with which I am currently dealing (no names, no pack drill, but it is a very large project) is being dealt with in New South Wales (I am pretty much the only lawyer based in South Australia involved in the dispute).

Also, the majority of my work (not all of it, of course) deals with the adjudication of disputes under what is known, in Australia, as the security of payment legislation[1]. I do not think I have dealt with any security of payment issues in the ACT. But I have been instructed, and have acted, in security of payment disputes in every other state and territory. And of course New Zealand.

It is utterly bizarre that there is a different statutory regime in every State and Territory. I have particular sympathy for the specialist subcontractors who enter into contracts all around Australia. These contracts are often for many tens of millions of dollars, and the commercial people who are responsible for these contracts cannot reasonably be expected to get their heads around the different legislation in every State and Territory in Australia.

The Queensland legislation, now called Building Industry Fairness (Security Of Payment) Act 2017 contains (according to my computer’s count) 40,900 words. Victoria’s effort, on the other hand, known as the Building and Construction Industry Security of Payment Act 2002, contains a mere 17,539 words. Both of these outstrip the most populous state, New South Wales, where the legislation is 15,750 words. These counts do not include regulations made under the primary legislation.

But prolixity is not everything. I think we have to give the prize for sheer Byzantine obscurity to the Victorian legislation. It has this unique and obscure concept of excluded amounts, which was originally intended to spike the guns of claimants. But the law is like a balloon. Push it in at one point, and it expands in another.

It is, quite frankly, bonkers that every State and Territory has a different security of payment regime. A number of bodies and reports have remarked the same thing, including the Society of Construction Law Australia and John Murray in his report the federal government. It would be perfectly legitimate, in constitutional terms, for the federal government to intervene, since the overwhelming majority of security of payment issues can be dealt with as a matter of corporations law. But right now, of course, the Federal Government has other fish to fry.

But there is a also a more permanent thing here. Australia is a relatively rich country. It has about 25 million people in its population, but only a very small fraction of this is necessary for the production of its wealth. Something has to be found for all the other people to do. And one of those things is vastly inflated governmental and legal interference in almost every respect of human endeavour and commercial life. There are those who believe that it is perfectly legitimate, and indeed desirable, to involve the courts and lawyers in completely pointless exercises, such as pleadings battles which boil down to arguments about the counting of angels dancing on pinheads. It all makes work, as Flanders and Swann used to say, for the working man to do.

Traditionally, it is military world wars which tend to break that mould. And the coronavirus might be regarded as something akin to a war in this regard. Australia is two or three weeks behind Europe, but can expect something akin to martial law before long. Human rights lawyers will, of course, complain. But one conceivable positive outcome is that these catastrophic times do sometimes disturb the complacent ossification of administrative and legal systems.

We shall see.




[1] It is a misnomer, based on what is now a historical obscurity. But the name has stuck.

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