Security of Payment WA: The 2021 Act and New Adjudication Regime

What it is

The Building and Construction Industry (Security of Payment) Act 2021 (WA) is the current statute governing progress payments and adjudication for construction work in Western Australia. It replaced the older Construction Contracts Act 2004 (WA) in three staged phases starting 1 February 2022, and the rollout was complete across all contracts by 1 February 2024.

The new Act is closer to the East Coast model used in NSW and Victoria. That is a significant change. The 2004 regime required the claimant to wait for a payment dispute to crystallise before applying for adjudication. The 2021 Act front-loads the timeline with a statutory payment claim, a payment schedule and tight default deadlines.

Who it applies to

The Act applies to construction contracts for construction work or related goods and services carried out in WA. It covers head contractors, subcontractors, suppliers and consultants on residential, commercial and civil projects.

There is an owner-occupier carve-out. Section 9 excludes construction contracts for the construction of a single dwelling-house, or for renovating, altering, extending, repairing or restoring a single dwelling-house, where the contract is between the head contractor and the resident owner. The Act still applies down the chain between the head contractor and its subbies and suppliers.

Payment claims

Under section 24 a payment claim must:

• be in writing
• identify the work and the contract
• state the claimed amount
• state that it is made under the Act

The claim can be served at the times set by the contract. If the contract is silent the default reference period is monthly.

A head contractor must also lodge a head contractor declaration confirming that subcontractors have been paid amounts due. False declarations are an offence.

Payment schedule and default deadlines

A respondent has 15 business days to give a payment schedule under section 25, or a shorter period if the contract specifies one. The schedule must:

• identify the payment claim
• state the scheduled amount
• give reasons for withholding any amount

If the respondent does not give a schedule within the statutory period it becomes liable for the full claimed amount on the due date. The claimant can recover the amount in court or apply for adjudication.

Note that the WA scheme uses a longer default schedule period than NSW or Victoria. Check the contract carefully because parties can shorten the deadline but not extend it past the statutory maximum.

Adjudication

Adjudication applications under section 26 must be made within 20 business days of the scheduled amount being due, or of the date the respondent missed the schedule. The application is lodged with an authorised nominating authority. The adjudicator must determine the application within 10 business days of acceptance, subject to extensions.

The State Administrative Tribunal hears reviews of adjudication decisions on limited grounds, in line with the previous WA regime. Determinations are otherwise enforceable as judgment debts.

Retention trust scheme

The 2021 Act introduced a Project Bank Account-style retention trust scheme. Head contractors holding retention money from subcontractors must hold it in a designated retention money trust account. This is a WA-specific feature aimed at protecting subbies if the head contractor becomes insolvent.

What this means for TradeLens compliance

WA builders need to retrain anyone trained on the old Construction Contracts Act regime. Reference dates, payment-schedule deadlines and adjudication windows are all different. The retention trust scheme also creates new financial control obligations that intersect with progress claim cycles. A simple monthly cadence with calendared statutory deadlines is the safest baseline.