The short answer is that you may well have problems that you never dreamed of.
The reality is that apart from a few laws of the Federal Government (such as tax, defence, marriage, divorce and trade practices), each of the states is effectively a separate entity that was a former British colony with its own laws.
The fact that they are all on the same continent and we all drive on the same side of the road does not alter the fact that a lot of laws end at each state border and new ones start.
Laws relevant to the building industry that are different in each state due to legislation, court cases or procedure are:
| • | Road rules; |
| • | Workers compensation; |
| • | Long service leave; |
| • | Industrial relations; |
| • | Workplace health and safety; |
| • | Security of payment / BIF; |
| • | Sale of goods; |
| • | Reservation of title / Romalpa clauses; |
| • | Debt recovery processes; |
| • | Subcontractors’ Charges / Workmens’ Liens; and |
| • | The contracts that you are required to enter into with consumers and other contractors in the industry. |
The list above is long. The differences between each state can be quite large. Let’s face it, this article is just not big enough and you do not have the time to read all of that detail.
The purpose of this article is to highlight the extent to which you should be aware that the laws can be significantly different in each state and you should not feel comfortable about that small job just over the border unless you have undertaken a full business development program for that environment just as if you were going to set up business in Singapore. Yes that’s right. Singapore, another British colony with laws very similar to ours to the extent that they drive on the left side of the road.
But is clearly a different country where most of us would not even think of setting up business because we do not know enough about the differences and we do not have local knowledge.
The same issues about differences apply to the different laws in each of the states within Australia.
Reservation of title clauses are a very good example of the differences in procedure.
What may be the correct way to enforce a reservation of title in one state (e.g. New South Wales) could get you arrested for stealing in another (e.g. Queensland).
A contract with a home owner that is adequate in one state may well get you prosecuted and fined in another. If you enter into a New South Wales contract with a Queensland homeowner to work on a house in Queensland you might even wind up not being able to enforce payment at all.
While some of you may look at your contracts and see a clause that refers to the law of a particular state applying (usually the state you are in), there can be real questions about whether that clause is effective in many cases and the legislation relating to most of the issues I have set out above operates in the state where the work is being done no matter what the contract says about which laws will apply.
The result is that if you entered into a contract in the Northern Territory with a contract that says that Northern Territory law applies but the project is in Victoria:
| 1. | you would have to comply with the Victorian workplace health and safety legislation; |
| 2. | if you have problems with recovering money and want to use the security of payment legislation then it is the Victorian process that you would have to follow; and |
| 3. | the Victorian courts are where you would have to enforce the debt. |
This would be the same for each of the states. While security of payment in each of the states has a lot of similarities there are differences that could mean you do not get paid if you do not have local knowledge.
The result is that you need lawyers and accountants in the other state that have the local knowledge. Many a gung ho company from Sydney or Melbourne has gone to one of the less populous states thinking they were going to teach the locals a lesson only to get carved up and eaten by the natives.
So, be very careful before you step across a border, even if it is only a short distance, because the natives may not be as friendly as they look, their laws are on their side not yours and you will probably have to go interstate to enforce your rights to get paid without any of the protections you have become used to in your own state.