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The Commonwealth government’s long-awaited report on the Review of Security of Payment Laws by Mr John Murray AM was released in December 2017 with 86 recommendations suggesting that the “East Coast” model be adopted nationally. The East Coast Model was first introduced in 1999 in New South Wales, with other Eastern states having adopted similar legislation shortly after. The New South Wales Legislation has been heavily litigated over the past 20 years and has been subject to considerable refinement since its enactment to eliminate gaps within the legislation. The Murray Report rightfully suggests that the East Coast Model is the most effective model in successfully protecting the rights to payment of both Principals and Contractors.
Practically, the construction industry is a national industry which routinely operates across multiple jurisdictions. Having separate security regimes amongst states frustrates industry participants and increases complexity and administrative burden. What must now occur is a national approach to security of payment laws. This form of harmonisation has been enacted with respects to many other key legislations such as workplace health and safety and corporation’s laws. Security of payment laws are no less significant and are heavily relied upon by Australia’s national construction industry.
Our partner, Keith Redenbach, was commissioned by the Society of Construction Law to review the NSW laws in 2015 and called for the harmonisation of state legislation in early 2016. This recommendation has now been endorsed by the Murry Report and yet still no action is being taken. The immediacy of this need for harmonisation cannot be understated. The Commonwealth needs to adopt the findings of this report.
The full recommendations of the Murray report can be seen in the link below: