SECURITY of payment for builders and their subcontractors could become a reality if the Construction Contracts Bill is soon passed.
The bill is on the agenda for the special parliamentary sitting in Albany and will, if made law, disallow common construction contract terms such as ‘pay when paid’.
Minter Ellison construction lawyer Greg Steinepreis said the Government had opted for UK-style implied terms rather than the statutory approach taken by other State governments.
Some of those implied terms include interest on overdue payments, ownership of goods and duties as to unfixed goods on insolvency.
The Court Government first proposed this type of legislation in 1996, and the Gallop Government made a promise to have such legislation introduced. For one reason or other, its path through parliament has been delayed and there are fears that it will still not be passed before the next election.
Electrical Contractors Association executive director Rod Hale said while the legislation could also have negative impacts for his organisation’s members – the law would also apply to how subcontractors dealt with their suppliers – he said it was essential it was brought in as quickly as possible.
“The only thing we want is to get this thing up and running. If it has problems, let’s review it in a short period of time,” he said.
The Master Builders Association is also keen to see the legislation introduced.
Its executive director, Michael McLean, said the legislation would put in place a legal right for head contractors as well as their subcontractors.
“One of the concerns we have with the legislation, though, is the provision that prevents terms allowing for payment after 50 days,” he said.
“There are some cases where such a payment term is appropriate.”
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