BuildLaw Issue 35 April 2019 | Page 49

schedule based on placing a higher priority on promoting the interests of claimants rather than providing more leeway to accommodate any administrative oversights of respondents. Respondents should put appropriate systems and procedures in place to ensure that they are able to reply to a payment claim. This amendment will not only operate fairly on claimants, but is also consistent with one of the key objectives of the security of payment legislation which is to encourage good payment practices in the construction industry.
Creating a reference date at the date of termination of a construction contract
In the BCIP Act, the rights to progress payments rests on a valid reference date33 under a construction contract. By definition, a reference date means34 :
1) a date stated in, or worked out under, the contract as the date on which a claim for a progress payment may be made for construction work carried out or undertaken to be carried out, or related goods and services supplied or undertaken to be supplied, under the contract; or
2) if the contract does not provide for the matter –
(i) the last day of the named month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract; and
(ii) the last day of each later named month.
The BIF Act clarifies this definition of “reference date” so that in the event of termination of a construction contract which does not provide for, or purports to prevent, a reference date surviving beyond termination, the final reference date for the construction contract is the date the construction contract is terminated35. The Murray Report also recognised the need for this clarification because of the judicial interpretation of the reference date in the ACT Act36 in the case of Southern Han37, where the judge stated:
“It makes little sense for (the claimant) to have a continuing right to claim payment progressively













under the contract when the contract is terminated and any obligation to perform the work under the contract has come to an end.”
Despite this clarification, stakeholders still found the concept of a reference date very confusing38 . For example, claimants are unclear whether a payment claim given before or after the specific date set out in the construction contract will be regarded as a valid payment claim, in particular for security of payment legislation giving claimant’s the right to progress payments “from” each reference date39 . There is also concern that permitting a reference date to be determined or worked out by reference to the time period set out in a construction contract may undermine the primary objective of promoting prompt payment. Therefore, to avoid confusion of the interpretation of “reference date” across different states, the Murray Report recommends the abolishment of the expression “reference date” and the legislation should simply provide that a person who has undertaken to carry out construction work or to supply related goods and services under a construction contract is able to make a payment claim for every named month or more frequently if so provided under the contract.