BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT BILL

Committee Stage

In committee (resumed on motion).

(Continued from page 4196.)

Clause 26.

The Hon. J.A. DARLEY: I move:

Page 18, after line 7 [clause 26(1)]—After paragraph (b) insert:

or

(c) an adjudicator who accepts an adjudication application notifies the claimant and the respondent that he or she has withdrawn from the adjudication.

The amendment is intended to ensure that an adjudicator can withdraw from an adjudication. This situation would probably be likely to arise only where the adjudicator has accepted an adjudication application but on further consideration has become aware of a possible conflict of interest.

I have been advised by one adjudicator that, on the surface, it may not be apparent to an adjudicator that a conflict exists and that, when it does arise, the only mechanism available to overcome it is to call the parties in, explain the situation and allow them to decide how to progress with the matter.

In some cases, the parties may not have an objection to the adjudicated proceeding to determine the application. However, the amendment would provide the adjudicator with that ability if, in the circumstances, they considered it appropriate to withdraw. I am sure that there are other situations, such as illness, that could also lead to an adjudicator wishing to withdraw, and this amendment would facilitate that process.

This amendment, together with the next three amendments, which are all consequential in nature, are all minor amendments aimed at improving the bill and making it that little bit better. The amendments do not change the operation of the bill in any significant way, but they do provide clarity for the parties involved. I urge all honourable members to support the amendments.

The Hon. D.W. RIDGWAY: The opposition supports the amendment.

The Hon. D.G.E. HOOD: Family First also supports the amendment.

The Hon. R.P. WORTLEY: Having talked to the Hon. Mr Darley, he has provided a little more clarity, and we support the amendment.

Amendment carried.

The Hon. J.A. DARLEY: I move:

Page 18, line 8 [clause 26(2)]—Delete 'those circumstances' and substitute:

the circumstances specified in subsection (1)(a) or (b)

This amendment is a consequential amendment relating to the previous amendment.

Amendment carried.

The Hon. J.A. DARLEY: I move:

Page 18, after line 12—After subclause (2) insert:

(2a) In the circumstances specified in subsection (1)(c), the application is discontinued and the claimant may make a new adjudication application under section 17.

This amendment is also a consequential amendment. It provides that, where an adjudicator withdraws from an adjudication application pursuant to subsection (1)(c) as inserted, the application is discontinued and the claimant may make a new adjudication application under section 17. The amendment essentially makes it clear that the claimant is still entitled to pursue adjudication in relation to the dispute.

Amendment carried.

The Hon. J.A. DARLEY: I move:

Page 18, lines 14 and 15 [clause 26(3)]—Delete 'becomes entitled to withdraw the previous adjudication application under subsection (2).' and substitute:

(a) becomes entitled to withdraw the previous adjudication application under subsection (2); or

(b) is notified by the adjudicator that he or she has withdrawn from the adjudication.

Again, this is a consequential amendment relating to the previous amendments.

Amendment carried; clause as amended passed.

New clause 26A.

The Hon. J.A. DARLEY: I move:

Page 18, after line 17—After clause 26 insert:

26A—Claimant may discontinue adjudication

A claimant may withdraw an adjudication application at any time before the application is determined by notice in writing served on the respondent, the adjudicator and the authorised nominating authority to whom the application was made.

Again, like the previous set of amendments relating to the withdrawal of an adjudicator, this amendment is intended to make it clear that a claimant may also withdraw an adjudication application at any time prior to a determination by an adjudicator. This is to be done by serving the respondent, the adjudicator and the nominating authority to whom the application was made with written notification of that intention. Like the previous amendments relating to the withdrawal of an adjudicator, this amendment is simply aimed at providing clarity for the parties.

The Hon. D.W. RIDGWAY: I indicate that the opposition supports the amendment.

New clause inserted.

Clauses 27 and 28 passed.

Clause 29.

The Hon. J.A. DARLEY: I move:

Page 19, lines 30 to 32 [clause 29(1)(b)]—Delete paragraph (b) and substitute:

(b) if no such amount is agreed—the hourly rate (if any) prescribed by regulation adjudicator in addition to reasonable expenses; or

(c) if no such amount is agreed and no hourly rate has been prescribed—such amount, by way of fees and expenses, as is reasonable having regard to the work done and expenses incurred by the adjudicator.

This amendment relates to an adjudicator's fees. The amendment is intended to overcome any concerns regarding unreasonable adjudication fees by providing for the option of having those fees prescribed by regulation. Clause 29 of the bill provides that an adjudicator is entitled to be paid for adjudicating the adjudication application such amount by way of fees and expenses as agreed between the adjudicator and the parties to the adjudication or, if no such amount is agreed, such amount by way of fees and expenses as is reasonable having regard to the work done and expenses incurred by the adjudicator.

The amendment seeks to broaden clause 29 by also providing the further option of having an hourly rate prescribed by regulation which would be payable where there is no agreement between the adjudicator and the parties to the adjudication. Where there are no fees prescribed by regulation, the effect of the amendment is to revert back to the current position in the bill.

I have had several discussions with key stakeholders and other industry experts regarding the issue of an adjudicator's fees. Certainly, from the stakeholder's point of view, they would like a system that is affordable and, therefore, accessible. Industry experts have indicated that the fees payable should vary depending on the complexity of the adjudication application and the experience of the adjudicator. For instance, an adjudication application worth $50,000 will not cost as much and may not necessarily require an adjudicator with as much experience as an adjudication worth $1 million.

The fees should be flexible enough to provide for this situation and, certainly, if there is to be an hourly rate prescribed by regulation, those rates should take into account the degree of complexity or the level of experience required. I am advised that in New South Wales complaints in relation to an adjudicator's fees are virtually negligible. In the one instance that was highlighted to me where the adjudicator was overcharging, the adjudicator was dropped by the nominating authority. I am extremely mindful of the issues raised with me by stakeholders in relation to the affordability of this process. This legislation will represent a first for those stakeholders so it is, in some ways, difficult to predict whether the issue of adjudicator fees will result in any of the concerns raised by those who oppose the current fee structure.

With that in mind I move this amendment to allow these concerns to be addressed either now or in the future. I am certain that stakeholder groups and industry representatives alike would be keen to be involved in any consultation regarding the regulations. If there are concerns raised by stakeholders regarding adjudicator fees later down the track, we could revisit the issue. I urge all honourable members to support this amendment.

Amendment carried; clause as amended passed.

Remaining clauses (30 to 35) passed.

Schedule 1.

The Hon. J.A. DARLEY: I move:

Clause 2, page 22, line 33 [Schedule 1, clause 2(6)]—Delete subclause (6) and substitute:

(6) Section 30(3)—delete 'unless the building work contractor has requested the payment by notice in writing given to building owner or an agent authorised to act on behalf of the building owner.' and substitute:

unless—

(a) the building work contractor has requested the payment by notice in writing to the building owner or an agent authorised to act on behalf the building owner; or

(b) the domestic building work contract is a contract to which the Building and Construction Industry Security of Payment Act 2009 applies (in which case the provisions of that act relating to progress payments apply).

This is a consequential amendment relating to the exclusion of owner-builders, as already outlined. There are a small number of contracts which may fall within the ambit of the bill, and it would be only because they do not relate to premises that the party for whom the work is carried out resides in or proposes to reside in. I urge all honourable members to support the amendment.

Amendment carried; schedule as amended passed.

Title passed.

Bill reported with amendments.

Third Reading

Bill read a third time and passed.