Do you have a small building or construction project that requires hiring contractors for a small job or ongoing-work? It is important to consider the legislative provisions that regulate how and when you pay these workers. The Construction Contracts (Security of Payments) Act 2004 (“the NT Act”) is state based legislation that regulates the payments for work delivered in the building and construction industry.

If you are undertaking a small or large scale building project, LawPath’s expert debt recovery lawyers can help you better understand your rights and obligations when hiring contractors.

What is the Security of Payments Act (NT)?

In the Northern Territory, the building and construction industry is regulated by the Construction Contracts (Security of Payments) Act 2004 which protects the rights of construction workers and suppliers to claim progress payments for work or goods delivered. The Act applies to all construction contracts entered into after 1 July 2005 within the Northern Territory and provides a streamlined adjudication process for contractual disputes.

Entitlement to payment

Under the Act, contractors are entitled to receive progress payments under any construction contract including contracts that are written, oral or a combination of both. The Act also protects the contractor’s right to payment where the contracts were expressed to be governed by the law of another state or place (other than NT).

The definition of construction work is more widely construed in the Act compared to other states and includes building work and related trades which protects the rights of suppliers and designers providing construction related services. However the Act does not cover construction work relating to mining or any wholly artistic work.

Interest is payable on the unpaid amount of a progress payment and is calculated at the rate of interest prescribed in the Supreme Court Act (NT) where the contract does not have a provision for interest on overdue payments.

Payment Claims

Where there is a progress payment owing for construction work and a claim has been made by the owed party, the Act specifies that payment must be made within 28 days after a payment claim has been received. If full payment for the goods or services is not made within the due date, a notice of dispute must be provided to the claimant within 14 days of the claim.

Notice of dispute

If a person does not intend to pay the total amount claimed, they must provide a notice of dispute within 14 days receiving the payment claim. A notice of dispute is a notice in writing that must be addressed to the claimant to inform them if the claim is being rejected either because it is not in accordance with the contract; or because there is a dispute around an item in the claim. The notice of dispute must identify the name of the party giving notice and state reasons as to why the person disputes the item(s) in the claim.

Adjudication

The Act provides that where there is a dispute between the parties regarding the amount claimed, the contractor may make an application for adjudication. The contractor must submit their application within 90 days after the dispute arises to the other party, the nominated adjudicator or a prescribed appointer. Where there is no nominated adjudicator in the contract, a prescribed appointer will appoint an adjudicator within 5 working days of the application.

Breach of the Act

The Construction Contracts (Security of Payments) Act 2004 protects the rights of contractors and suppliers under a construction contract to receive and recover progress payments for carrying out work and supplying related goods and services. A determination made by an adjudicator may be enforced as a judgment for a debt in Court.

<pIf you have a payment dispute or are looking to hire a contractor, LawPath’s experienced debt recovery lawyers can advise you on your rights and obligations.

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Jennifer Wang

Jennifer is a Paralegal, working in our content team, which aims to provide free legal guides to facilitate public access to legal resources. With a keen interest in media and IP law, her research focuses on the evolving role of the law to navigate new and emerging information platforms.