Introduction to the WA Act

The West Australia Government recognises that prompt payment is vital to the stability and efficiency of the building and construction industry. Too often, the party liable to pay for construction work or related goods or services (the respondent) has manufactured a dispute to deny or delay payment. In other situations, respondents have tried to string out the time for payment with promises of future work if the claimant just waits a bit longer.

The object of the Act is to provide an effective and fair process for securing payments to persons who undertake to carry out construction work, or to supply related goods and services, in the building and construction industry. Fundamentally, the Act seeks to maintain the industry cash flow and relieve subcontractors from undue financial pressures by ensuring that any party that contracts to carry out construction work, or supply related goods or services in WA is entitled to promptly receive and recover all progress payments that are due, including final payments and retention monies.

A "construction contract” is very broadly defined, meaning the Act applies to the vast majority of contracts entered into in the industry, including those for commercial, infrastructure, some residential (contract values above $500,000 including variations), and engineering construction works. It includes the supply of related goods and services.

The Act:

• Provides contractors (or claimants) with effective rights to get paid
• Prohibits and modifies certain contractual terms
• Improves protections for performance security.

The Act applies to:

• Any construction contract made after 1 August 2022. There are a few limited exclusions
• A construction contract that is written or oral
• A construction contract that is partly written and partly oral
• A construction contract that says it is to be governed by a law of a State or Territory outside of WA, but the work is carried out in WA.

The Act creates a statutory dispute resolution process (adjudication) that allows a party (the claimant) alleging they are owed monies under a construction contract to promptly obtain payment from the respondent, based on an assessment of the merits of the claim by an appropriately qualified and independent adjudicator. Adjudicate Today nominates the adjudicator and conducts training and mentoring programs for adjudicators.

The adjudication process is simple and rapid. Adjudicators must make their determination within 10 business days (unless the parties agree to extend the time to a maximum of an additional 20 business days) from date of receipt of any adjudication response or when it was due. If the respondent’s reasons for not paying don’t pass the adjudicators independent assessment, the respondent is generally liable for the progress claim, interest and the adjudication fees. If a respondent does not comply with an adjudication determination, the claimant may obtain from Western Australia Building and Energy a certified copy of the adjudication determination for lodgement at the appropriate court which registers it as a judgment debt. For most claims referred to adjudication, a lawyer should not be necessary.

In order to commence a claim under the Act, there must be a written Payment Claim made against a party to a construction contract (either written or oral) in relation to construction work or the supply of related goods and services for construction work in WA.

Time frames under the Act are all important. Claimants must take different actions based on whether a respondent serves or fails to serve a written response to the payment claim (the Act calls this the payment schedule) within defined times. Failure by the claimant to follow the strict requirements of the Act will cause an adjudication application to fail.

The information, wizards and flowcharts we publish on this website clearly describe how parties should proceed in preparing and responding to a payment claim, how to make and respond to an adjudication application and the timing and processes to be followed as required by the Act.

Our staff are trained to answer questions about how the Act works and what parties need to do to comply with it. We provide this information for free and without obligation. If parties proceed to adjudication, the adjudicator pays AT a service fee from his/her fees to cover our costs. Parties are only asked to pay the adjudicator's fee after the adjudication determination is received by AT.

Let's return to the WA flowchart.