Security for Payment - Clear words needed to limit reference dates in building contracts

Limiting exposure to ambush payment claims under the Building and Construction Industry Payments Act 2004 (BCIPA) is a serious issue for owners/developers and for main contractors.

Following the Jedfire decision in 2009, it was thought that using a formula of words which permitted progress claims to practical completion, at practical completion and at the final claim stopped reference dates (and therefore payment claims) arising during the defects liability period.

A recent NSW decision has created uncertainty as to whether this view is correct.

It is accepted law that a contractual modification of the relevant laws will not be effective unless it is clearly stated that the contract is to supplant the stipulations stated. The contractual modification cannot however contract out of BCIPA. If it does so, it is void to that extent.