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ARTICLE · 14 OCTOBER 2023

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Unlicensed contractors can claim under the Security of Payment Act

Bartier Perry Solicitors
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Highlights significant risk to consumers and developers by not knowing the requirements of the Security of Payment Act.

AustraliaReal Estate and Construction
David Creais
David Creais
Breitil Sulaiman
Breitil Sulaiman
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The Supreme Court, in its recent judgment of Sunshine East Pty Ltd v CBEM Holdings Pty Ltd, reached the surprising and worrying conclusion that a builder who is not licensed and has failed to obtain mandatory insurance under the Home Building Act 1989 is still entitled to payment under the Building and Construction Industry Security of Payment Act 1999.

Although the judgment is consistent with the objective of the Security of Payment Act as an interim payment scheme for the benefit of contractors, it is unlikely that those who drafted the Security of Payment Act intended that it could be used by a contractor operating in breach of the law to obtain payment, particularly in an unsophisticated consumer situation.

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