Ensuring Business Cash Flow in the Building and Construction Industry

Maguire & McInerney was recently contacted by one of our clients who is a director of a company working in the building industry.  The client was having a great deal of difficulty obtaining payment for an account from another business.  He did not want to commence Court proceedings due to expenses and delay involved, but needed to resolve the situation fairly quickly because his business (like any business) needed the cash flow.  

The client was not aware of the provisions of an Act called the Building & Construction Industry Security of Payments Act (NSW) 1999 (the “Act”).  This Act provides an extremely effective way for monies to be recovered where the debt is in any way related to the building and construction industry. 

The key features of the Act are:-

1. A very broad definition of ‘construction work’ such as to incorporate a range of diverse fields such as telecommunications, painting, electrical work, as well, of course, as all general construction work;

2. The whole purpose of the Act is to ensure that payments for the provision of services, the supply of goods, and the completion of construction work are not held up by a refusal of a person to pay for such work or services;

3. The Act provides an alternate to litigation, namely Adjudication, and this is a very efficient way to have a decision made very quickly on a claim and then to immediately be able to recover it;

4. If an Adjudication is made and it is ignored by the other party, that Adjudication can be registered with the Court as if it was an actual Order of the Court, and can then be recovered straight away as if it was a Judgment of the Court.

Mark McDonald and Matthew Barnes at Maguire & McInerney are available to advise any clients working in this area to help to ensure your continued business cash flow.