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ARTICLE · 21 JUNE 2024

Seeking Payment Upstream From The Principal

Vincent Young
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After lodging a payment withholding request under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) on a principal, a subcontractor may utilise the Contractors...

AustraliaReal Estate and Construction
Brett Vincent
Brett Vincent
Angie Kim
Angie Kim

After lodging a payment withholding request under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) on a principal, a subcontractor may utilise the Contractors Debt Act 1997 (NSW) (CDA) to seek payment directly from the principal instead of the respondent/contractor.

This alternative means of seeking payment for work done can be a godsend in a high-risk industry where solvency is often in issue. However, it is not always easy to follow because the process is not clearly set out, and in fact, starts in the SOPA. This article seeks to clarify the process and what it means for you.

General

Under s 26A of the SOPA,1 upon lodging an adjudication application a subcontractor can also lodge a payment withholding request (PWR) on the 'principal contractor' (defined as the entity who pays the respondent for the work or materials that the respondent engaged the claimant to carry out or supply to carry out/supply,2 which is normally the

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