In the not so distant past the only course of action to recover a debt was essentially to go and see a solicitor and take the builder to court.
Then some of the states introduced Tribunals to hear certain construction disputes and the construction industry cheered thinking all of their payment problems were solved. The problem was that there were dark undercurrents in the Tribunals and trade contractors were still having to incur costs and were still having trouble getting paid.
So the various states have introduced security of payment legislation and once again the construction industry cheered thinking the wrath of almighty beings and processes were going to be visited upon those who dared to fail to pay any amount that a trade contractor felt they were owed.
Once again, mysterious dark currents have come into play and many trade contractors are finding that the security of payment legislation does not mean that you automatically get paid an amount claimed despite the moral righteousness of the trade contractor.
So, what are the issues for trade contractors and what are those mysterious dark currents that cause them so much trouble. It is simple. Tribunals and security of payment adjudicators apply exactly the same law that is applied in the courts.
There is no provision for Tribunals or adjudicators to simply award what they think is fair or just based on their gut assessment.
So, you are going to ask what is the use of Tribunals and security of payment legislation. The answer is that:
| 1) | they are faster because the time limits for each party to do what it has to do is short; |
| 2) | the rules of evidence are less strict; and |
| 3) | there are less procedural steps that you have to go through. |
However, the big issue is that:
| 1) | The law you must comply with is the same as going to court; |
| 2) | What you must prove is the same as going to court; |
| 3) | The standard to which you must prove your case is the same as going to court; |
| 4) | The extent to which you must demonstrate compliance with your contract is the same as going to court. |
The result is that trade contractors that were having trouble recovering in court will still have trouble in a tribunal or security of payment process if they have not done all they have to do under the contract and dealt with all of the bits or paper required by the contract.
The expression that doing the work is only 60% of the process of getting paid and the paperwork required by the contract is the other 40% is perfectly true.
The other point that should be obvious to you is that if you demonstrate that you know what you are doing and comply with your contract in detail the builder is not going to try and make you the trade contractor that does not get paid on that project. They will pick on someone else.
There is also a dark side of the procedures of Tribunals and security of payment processes in that the fast process makes it more frantic and expensive to get your case together in time to meet the deadlines.
The really bad news about the security of payment processes are that everything is done on paper requiring a very clear setting out of the contract, the dispute and documents evidencing contractual compliance. There is no opportunity for defects in paper to be rectified by the cross examination of witnesses as you would in court or a tribunal.
To make it very clear, the idea that “She’ll be right mate” and you are going to get an easier run through a Tribunal or security of payment process if your case is a bit dodgy is WRONG. The truth is that a case that is to be dealt with by a security of payment process needs to be more perfect than if you take the same case to court.
In order to get the most benefit out of the security of payment legislation you must be fully aware of what you have to do to administer your contract.