Security of Payment Acts (“SOPA”)

Security of payment’ means enforcing the entitlement of contractors, subcontractors, consultants or suppliers to promptly receive payments due under the terms of their contract.

In general, the security of payment problem relates to the arbitrary devaluation, late payment and/or non-payment of progress claims – which has in the past been a persistent problem for those who perform construction work in, or supply goods and services to, the construction industry.

The “construction industry” includes industrial and commercial (and domestic, with some limitations) building & construction, wherever occurring – including ‘above-ground’ building & construction involved in the mining industry.

All States and Territories in Australia have now introduced legislation (a SOPA) to counter the tactic of some principals and contractors in delaying payments, or unduly reducing the value of payments, so as to enhance their cash flow at the expense of subcontractors and suppliers.

Adjudication Applications

The SOPA’s introduced a unique form of ‘rapid adjudication’ of disputes over progress payment amounts, whereby, an independent Adjudicator makes a binding determination as to the amount of progress payment to be paid to a Claimant by a Respondent.

If the Respondent does not pay the adjudicated amount by the relevant date, the Adjudicator’s determination is then registered as a judgement in a court via a relatively straightforward administrative process and is enforceable accordingly.

Croesus provides the services of certified Adjudicators available to carry out these functions.

However, Adjudicators do not personally choose Claimants (or vice versa); Claimants make an adjudication application to an Authorised Nominating Authority, which nominates one of a number of registered Adjudicators on its panel to undertake the adjudication.


Authorised Nominating Authorities (ANA’s)

An Adjudicator can only be appointed by an Authorised Nominating Authority (ANA), chosen by the Claimant.

ANA’s are appointed pursuant to each State/Territory SOPA. Currently, there is a total of 8 or 9 ANA’s that have been appointed across all legal jurisdictions.