Building Industry Fairness (Security of Payment) Act 2017

This Act may be cited as the Building Industry Fairness (Security of Payment) Act 2017.

Chapter 9, part 1, divisions 1 to 4 commence on a day to be fixed by proclamation.

The Acts Interpretation Act 1954, section 15DA does not apply to chapter 9, part 1, divisions 1 to 4.

Note—

The Acts Interpretation Act 1954, section 15DA, provides for the automatic commencement of certain Acts 1 year after they are assented to.

The main purpose of this Act is to help people working in the building and construction industry in being paid for the work they do.

The main purpose of this Act is to be achieved primarily by—

requiring the use of statutory trusts for particular contracts related to the building and construction industry; and

granting an entitlement to progress payments, whether or not the relevant contract makes provision for progress payments; and

establishing a procedure for—

making payment claims; and

responding to payment claims; and

the adjudication of disputed payment claims; and

the recovery of amounts claimed; and

enabling the use of a statutory charge in favour of subcontractors for payment of the work they do.

This Act binds all persons, including the State, and, as far as the legislative power of the Parliament permits, the Commonwealth and the other States.

The dictionary in schedule 2 defines particular words used in this Act.

A contract is a subcontract for another contract if—

performance of the contract contributes to the performance of the other contract because the work, required to be carried out under the contract, will form all or part of the work required to be carried out under the other contract; and

the contribution mentioned in paragraph (a) is not merely coincidence.

Example for paragraph (b)—

the purchase of tools from a retail store

To remove any doubt, it is declared that—

the contribution mentioned in subsection (1)(a) may be indirect because the contract contributes to the performance of 1 or more other subcontracts in order to contribute to the other contract; and

Note—

A subcontract that contributes directly to a contract would have 1 entity that is both a party to the subcontract and a party to the contract.

a contract may be a subcontract for another contract regardless of whether any party to the contract is also a party to the other contract.

If the party to a contract, who is required to carry out work under the contract, subcontracts all or part of the work—

the resulting subcontract is a subcontract for the contract; and

the person required to carry out the work under the subcontract is a subcontractor for the contract; and

the work required to be carried out under the subcontract is the subcontracted work for the contract.

The categories of subcontracts are first tier subcontracts, second tier subcontracts, third tier subcontracts and so on.

A subcontract is a first tier subcontract for a contract if—

performance of the subcontract contributes directly to the performance of the contract; and

1 person is both a party to the subcontract and a party to the contract.

A subcontract is a second tier subcontract for a contract if—

performance of the subcontract contributes to the performance of the contract only by also contributing to the performance of another subcontract for the contract; and

no party to the subcontract is also a party to the contract; and

1 person is both a party to the subcontract and a party to the other subcontract.

A subcontract is a higher subcontract for another subcontract if—

performance of the other subcontract contributes to the performance of the subcontract because the work, required to be carried out under the other subcontract, will form all or part of the work required to be carried out under the subcontract; and

both subcontracts are subcontracts for the same contract.

Example—

A first tier subcontract would be a higher subcontract for a third tier subcontract if the work required to be carried out under the third tier subcontract will form all or part of the work required to be carried out under the first tier subcontract.

The main purpose of this chapter is to ensure that funds paid to the contracted party for particular contracts are held in a trust to protect the interests of subcontractors.

In this chapter—

amendment, of a contract, includes a variation of the contract or a change in the contract price.

approved financial institution means a financial institution approved by the commissioner under section 55.

building means a fixed structure that is wholly or partly enclosed by walls or is roofed.

contract administration, in relation to project trust work wholly or partly designed by a person, includes the following—

preparing tender documentation and calling and selecting tenders;

preparing, or helping the person’s clients with the preparation of, contracts;

preparing additional documentation for the person’s clients or building contractors;

arranging and conducting on-site meetings and inspections;

arranging progress payments;

arranging for certificates, including certificates from a local government, to be issued;

providing advice and help to the person’s clients including during the maintenance period allowed under a contract.

contracted party, for a contract, means the party to the contract who is required to perform work under the contract, whether by—

carrying out the work personally; or

directly or indirectly causing the work to be carried out.

contracted work, for a contract, means the work required to be carried out under the contract.

contracting party, for a contract, means the party to the contract for whom the contracted work is to be carried out.

contract price see section 9.

hospital and health service means a Hospital and Health Service established under the Hospital and Health Boards Act 2011, section 17.

mechanical services work see the Queensland Building and Construction Commission Act 1991, schedule 2.

project trust contract means a contract for which a project trust is required under section 12.

project trust subcontract see section 9A.

project trust work see section 8A.

protected work...

State authority—

means—

an agency, authority, commission, corporation, instrumentality, office, or other entity, established under an Act or by authority of the State for a public or State purpose; or

a corporation that is—

owned or controlled by the State, a local government or an entity mentioned in subparagraph (i); and

prescribed by regulation to be a State authority; or

a subsidiary of a corporation mentioned in subparagraph (ii); or

a part of an entity mentioned in subparagraphs (i) to (iii); or

a hospital and health service; but

does not include an entity prescribed by regulation not to be a State authority.

trust records means records required to be kept and retained under section 52.

variation, of a contract, means an addition to, or an omission from, the contracted work.

Project trust work means any of the following work—

the erection or construction of a building;

the renovation, alteration, extension, improvement or repair of a building;

the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building;

any site work (including the construction of retaining structures) related to work of a kind mentioned in paragraph (a), (b) or (c);

the preparation of plans or specifications for the performance of any other work mentioned in this subsection;

contract administration if carried out by a person for the construction of a building wholly or partly designed by the person;

fire protection work within the meaning of the Queensland Building and Construction Commission Act 1991, schedule 2;

site testing within the meaning of the Queensland Building and Construction Commission Act 1991, schedule 2 and classification carried out in preparation for the erection or construction of a building on the site;

the carrying out of a building inspection;

the inspection or investigation of a building, and the provision of advice or a report, for the following—

termite management systems for the building;

termite infestation in the building;

work performed by an architect under the Architects Act 2002 in the architect’s professional practice if the work is associated with a building;

work performed by a registered professional engineer under the Professional Engineers Act 2002 in the engineer’s professional practice if the work is associated with a building;

work performed by a surveyor under the Surveyors Act 2003 in the surveyor’s professional practice if the work is associated with a building;

electrical work under the Electrical Safety Act 2002 if the work is associated with a building;

the erection of scaffolding that is associated with a building;

earthmoving and excavating that is associated with a building;

certification work performed by a building certifier under the Building Act 1975 in the certifier’s professional practice if the work is associated with a building;

the assessment of energy efficiency of a building;

work performed by a fire safety adviser under the Building Fire Safety Regulation 2008 if the work is associated with a building;

the laying of wet pour rubber, including the laying of a blended mix of graded rubber particles and binder to provide a continuous surface if the work is associated with a building;

the installation of prefabricated components of a building;

mechanical services work that is associated with a building.

Project trust work also includes work prescribed by regulation to be project trust work.

However, project trust work does not include work prescribed by regulation not to be project trust work.

s 8B om 2024 No. 14 s 18

The contract price, for a contract, means the amount the contracted party is entitled to be paid under the contract or, if the amount can not be accurately calculated, the reasonable estimate of the amount the contracted party is entitled to be paid under the contract.

In working out the amount under subsection (1), an amount for GST is not to be included.

A subcontract for a project trust contract is a project trust subcontract if, when the subcontract is entered into—

the subcontract is a first tier subcontract for the contract; and

the subcontracted work under the subcontract is or includes 1 or more of the following—

architectural services;

contractor or trade work;

a professional engineering service;

services or work prescribed by regulation for this paragraph; and

the subcontract is not excluded by regulation from being a project trust subcontract.

A subcontract does not cease to be a project trust subcontract because of—

an amendment of the subcontract; or

an amendment of subsection (1) or a regulation made for subsection (1).

If a contract becomes a project trust contract after it is entered into, a subcontract of the contract then in existence becomes a project trust subcontract if it would have been a project trust subcontract had it been entered into when the contract became a project trust contract.

A subcontract that was not, at the time it was entered into, a project trust subcontract becomes a project trust subcontract if—

the subcontract is amended; and

the subcontract would have been a project trust subcontract had it been entered into in its amended form, including any earlier amendments, at the time it was amended.

In this section—

architectural services see the Architects Act 2002, schedule 2.

contractor or trade work means—

work for which the subcontractor holds, or is required to hold, a licence under any of the following—

the Building Act 1975;

the Electrical Safety Act 2002;

the Plumbing and Drainage Act 2018;

the Queensland Building and Construction Commission Act 1991;

a regulation made under the Work Health and Safety Act 2011;

an Act or regulation prescribed by regulation for this paragraph; or

work prescribed by regulation to be contractor or trade work.

professional engineering service see the Professional Engineers Act 2002, schedule 2.