Building Industry Fairness (Security of Payment) Act 2017 (Qld)

Building Industry Fairness (Security of Payment) Act 2017

An Act to provide for the security of payment in the building and construction industry by providing for effective, efficient, and fair processes for securing payment

Chapter 1    Preliminary

Part 1    Introduction

1   Short title

This Act may be cited as the Building Industry Fairness (Security of Payment) Act 2017.

2   Commencement

(1)Chapter 9, part 1, divisions 1 to 4 commence on a day to be fixed by proclamation.

(2)The Acts Interpretation Act 1954, section 15DA does not apply to chapter 9, part 1, divisions 1 to 4.

Note—

The Acts Interpretation Act 1954, section 15DA, provides for the automatic commencement of certain Acts 1 year after they are assented to.

3   The main purpose of Act

(1)The main purpose of this Act is to help people working in the building and construction industry in being paid for the work they do.

(2)The main purpose of this Act is to be achieved primarily by—

(a)requiring the use of statutory trusts for particular contracts related to the building and construction industry; and

(b)granting an entitlement to progress payments, whether or not the relevant contract makes provision for progress payments; and

(c)establishing a procedure for—

(i)making payment claims; and

(ii)responding to payment claims; and

(iii)the adjudication of disputed payment claims; and

(iv)the recovery of amounts claimed; and

(d)enabling the use of a statutory charge in favour of subcontractors for payment of the work they do.

Part 2    Application and operation of Act

4   Act binds all persons

This Act binds all persons, including the State, and, as far as the legislative power of the Parliament permits, the Commonwealth and the other States.

Part 3    Interpretation

5   Definitions

The dictionary in schedule 2 defines particular words used in this Act.

6   Subcontracts, subcontractors and subcontracted work

(1)A contract is a subcontract for another contract if—

(a)performance of the contract contributes to the performance of the other contract because the work, required to be carried out under the contract, will form all or part of the work required to be carried out under the other contract; and

(b)the contribution mentioned in paragraph (a) is not merely coincidence.

Example for paragraph (b)—

the purchase of tools from a retail store

(2)To remove any doubt, it is declared that—

(a)the contribution mentioned in subsection (1)(a) may be indirect because the contract contributes to the performance of 1 or more other subcontracts in order to contribute to the other contract; and

Note—

A subcontract that contributes directly to a contract would have 1 entity that is both a party to the subcontract and a party to the contract.

(b)a contract may be a subcontract for another contract regardless of whether any party to the contract is also a party to the other contract.

(3)If the party to a contract, who is required to carry out work under the contract, subcontracts all or part of the work—

(a)the resulting subcontract is a subcontract for the contract; and

(b)the person required to carry out the work under the subcontract is a subcontractor for the contract; and

(c)the work required to be carried out under the subcontract is the subcontracted work for the contract.

(4)The categories of subcontracts are first tier subcontracts, second tier subcontracts, third tier subcontracts and so on.

(5)A subcontract is a first tier subcontract for a contract if—

(a)performance of the subcontract contributes directly to the performance of the contract; and

(b)1 person is both a party to the subcontract and a party to the contract.

(6)A subcontract is a second tier subcontract for a contract if—

(a)performance of the subcontract contributes to the performance of the contract only by also contributing to the performance of another subcontract for the contract; and

(b)no party to the subcontract is also a party to the contract; and

(c)1 person is both a party to the subcontract and a party to the other subcontract.

(7)A subcontract is a higher subcontract for another subcontract if—

(a)performance of the other subcontract contributes to the performance of the subcontract because the work, required to be carried out under the other subcontract, will form all or part of the work required to be carried out under the subcontract; and

(b)both subcontracts are subcontracts for the same contract.

Example—

A first tier subcontract would be a higher subcontract for a third tier subcontract if the work required to be carried out under the third tier subcontract will form all or part of the work required to be carried out under the first tier subcontract.

Chapter 2    Statutory trusts

Part 1    Preliminary

7   Purpose of chapter

The main purpose of this chapter is to ensure that funds paid to the contracted party for particular contracts are held in a trust to protect the interests of subcontractors.

8   Definitions for chapter

In this chapter—

amendment, of a contract, includes a variation of the contract or a change in the contract price.

approved financial institution means a financial institution approved by the commissioner under section 55.

building means a fixed structure that is wholly or partly enclosed by walls or is roofed.

contract administration, in relation to project trust work wholly or partly designed by a person, includes the following—

(a)preparing tender documentation and calling and selecting tenders;

(b)preparing, or helping the person’s clients with the preparation of, contracts;

(c)preparing additional documentation for the person’s clients or building contractors;

(d)arranging and conducting on-site meetings and inspections;

(e)arranging progress payments;

(f)arranging for certificates, including certificates from a local government, to be issued;

(g)providing advice and help to the person’s clients including during the maintenance period allowed under a contract.

contracted party, for a contract, means the party to the contract who is required to perform work under the contract, whether by—

(a)carrying out the work personally; or

(b)directly or indirectly causing the work to be carried out.

contracted work, for a contract, means the work required to be carried out under the contract.

contracting party, for a contract, means the party to the contract for whom the contracted work is to be carried out.

contract price see section 9.

hospital and health service means a Hospital and Health Service established under the Hospital and Health Boards Act 2011, section 17.

mechanical services work see the Queensland Building and Construction Commission Act 1991, schedule 2.

project trust contract means a contract for which a project trust is required under section 12.

project trust subcontract see section 9A.

project trust work see section 8A.

protected work ...

State authority—

(a)means—

(i)an agency, authority, commission, corporation, instrumentality, office, or other entity, established under an Act or by authority of the State for a public or State purpose; or

(ii)a corporation that is—

(A)owned or controlled by the State, a local government or an entity mentioned in subparagraph (i); and

(B)prescribed by regulation to be a State authority; or

(iii)a subsidiary of a corporation mentioned in subparagraph (ii); or

(iv)a part of an entity mentioned in subparagraphs (i) to (iii); or

(v)a hospital and health service; but

(b)does not include an entity prescribed by regulation not to be a State authority.

trust records means records required to be kept and retained under section 52.

variation, of a contract, means an addition to, or an omission from, the contracted work.

8A   Meaning of project trust work

(1)Project trust work means any of the following work—

(a)the erection or construction of a building;

(b)the renovation, alteration, extension, improvement or repair of a building;

(c)the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building;

(d)any site work (including the construction of retaining structures) related to work of a kind mentioned in paragraph (a), (b) or (c);

(e)the preparation of plans or specifications for the performance of any other work mentioned in this subsection;

(f)contract administration if carried out by a person for the construction of a building wholly or partly designed by the person;

(g)fire protection work within the meaning of the Queensland Building and Construction Commission Act 1991, schedule 2;

(h)site testing within the meaning of the Queensland Building and Construction Commission Act 1991, schedule 2 and classification carried out in preparation for the erection or construction of a building on the site;

(i)the carrying out of a building inspection;

(j)the inspection or investigation of a building, and the provision of advice or a report, for the following—

(i)termite management systems for the building;

(ii)termite infestation in the building;

(k)work performed by an architect under the Architects Act 2002 in the architect’s professional practice if the work is associated with a building;

(l)work performed by a registered professional engineer under the Professional Engineers Act 2002 in the engineer’s professional practice if the work is associated with a building;

(m)work performed by a surveyor under the Surveyors Act 2003 in the surveyor’s professional practice if the work is associated with a building;

(n)electrical work under the Electrical Safety Act 2002 if the work is associated with a building;

(o)the erection of scaffolding that is associated with a building;

(p)earthmoving and excavating that is associated with a building;

(q)certification work performed by a building certifier under the Building Act 1975 in the certifier’s professional practice if the work is associated with a building;

(r)the assessment of energy efficiency of a building;

(s)work performed by a fire safety adviser under the Building Fire Safety Regulation 2008 if the work is associated with a building;

(t)the laying of wet pour rubber, including the laying of a blended mix of graded rubber particles and binder to provide a continuous surface if the work is associated with a building;

(u)the installation of prefabricated components of a building;

(v)mechanical services work that is associated with a building.

(2)Project trust work also includes work prescribed by regulation to be project trust work.

(3)However, project trust work does not include work prescribed by regulation not to be project trust work.

8B   [Repealed]

9   Meaning of contract price

(1)The contract price, for a contract, means the amount the contracted party is entitled to be paid under the contract or, if the amount can not be accurately calculated, the reasonable estimate of the amount the contracted party is entitled to be paid under the contract.

(2)In working out the amount under subsection (1), an amount for GST is not to be included.

9A   Meaning of project trust subcontract

(1)A subcontract for a project trust contract is a project trust subcontract if, when the subcontract is entered into—

(a)the subcontract is a first tier subcontract for the contract; and

(b)the subcontracted work under the subcontract is or includes 1 or more of the following—

(i)architectural services;

(ii)contractor or trade work;

(iii)a professional engineering service;

(iv)services or work prescribed by regulation for this paragraph; and

(c)the subcontract is not excluded by regulation from being a project trust subcontract.

(2)A subcontract does not cease to be a project trust subcontract because of—

(a)an amendment of the subcontract; or

(b)an amendment of subsection (1) or a regulation made for subsection (1).

(3)If a contract becomes a project trust contract after it is entered into, a subcontract of the contract then in existence becomes a project trust subcontract if it would have been a project trust subcontract had it been entered into when the contract became a project trust contract.

(4)A subcontract that was not, at the time it was entered into, a project trust subcontract becomes a project trust subcontract if—

(a)the subcontract is amended; and

(b)the subcontract would have been a project trust subcontract had it been entered into in its amended form, including any earlier amendments, at the time it was amended.

(5)In this section—

architectural services see the Architects Act 2002, schedule 2.

contractor or trade work means—

(a)work for which the subcontractor holds, or is required to hold, a licence under any of the following—

(i)the Building Act 1975;

(ii)the Electrical Safety Act 2002;

(iii)the Plumbing and Drainage Act 2018;

(iv)the Queensland Building and Construction Commission Act 1991;

(v)a regulation made under the Work Health and Safety Act 2011;

(vi)an Act or regulation prescribed by regulation for this paragraph; or

(b)work prescribed by regulation to be contractor or trade work.

professional engineering service see the Professional Engineers Act 2002, schedule 2.

Part 2    Project trusts

Division 1 Preliminary

10   Definitions for part

In this part—

head contract means a contract for project trust work that is not also a subcontract of another contract.

minimum contract price ...

project trust account means the account for a project trust at a financial institution.

related services ...

subcontractor beneficiary, for a project trust, means a subcontractor who is a beneficiary of the trust under section 11A.

10A   Who is a related entity

(1)A person is a related entity for another person if—

(a)for individuals—they are members of the same family; or

(b)for an individual and a corporation—the individual or a member of the individual’s family—

(i)is a majority shareholder, director or secretary of the corporation or a related body corporate of the corporation; or

(ii)has an interest of 50% or more in the corporation; or

(c)for an individual and a trustee of a trust—the individual or a related entity under another provision of this section is a beneficiary of the trust; or

(d)for corporations—they are related bodies corporate; or

(e)for a corporation and a trustee of a trust—the corporation or a related entity under another provision of this section is a beneficiary of the trust; or

(f)for trustees of 2 or more trusts—

(i)a person is a beneficiary of both trusts; or

(ii)a person is a beneficiary of 1 trust and a related entity under another provision of this section is a beneficiary of the other trust.

(2)Also, a person is a related entity for another person if the persons acquire interests in a land holding trust and the acquisitions form, evidence, give effect to or arise from what is substantially 1 arrangement.

(3)In this section—

family, for a person, means—

(a)the person’s spouse; or

(b)a parent of the person or the person’s spouse; or

(c)a grandparent of the person or the person’s spouse; or

(d)a brother, sister, aunt, uncle, nephew or niece of the person or the person’s spouse; or

(e)a child of the person or the person’s spouse; or

(f)a grandchild of the person or the person’s spouse; or

(g)the spouse of any person mentioned in paragraphs (b) to (f).

land holding trust see the Duties Act 2001, schedule 6.

related bodies corporate means bodies corporate that are related under the Corporations Act, section 50.

10B   When amount liable to be paid to subcontractor

For this chapter, a person who is a party to a subcontract is liable to pay an amount to the subcontractor if any of the following circumstances apply—

(a)the amount is due to be paid by the person to the subcontractor in accordance with the terms of the subcontract;

(b)under the subcontract, the amount is certified, or otherwise assessed, as payable by the person to the subcontractor;

(c)the person gives the subcontractor a payment schedule for the amount;

(d)the person is liable to pay the amount to the subcontractor under section 77;

(e)the person must pay the amount to the subcontractor under chapter 3, part 4 because of an adjudication of a disputed progress payment for the subcontract;

(f)the person must pay the amount to the subcontractor because of a final and binding dispute resolution process;

(g)a court or tribunal orders the person to pay the amount to the subcontractor.

10C   References to particular terms in this part

In this part—

(a)a reference to a contract in association with a reference to a project trust is a reference to the contract for which the trust is required; and

(b)a reference to a contracting party in association with a reference to a project trust is a reference to the contracting party for the contract for which the trust is required; and

(c)a reference to a contracted party in association with a reference to a project trust is a reference to the contracted party for the contract for which the trust is required; and

(d)a reference to a trustee in association with a reference to a project trust, or a project trust contract, is a reference to the trustee for the project trust; and

(e)a reference to a subcontract in association with a reference to a project trust is a reference to a subcontract of the contract for which the trust is required; and

(f)a reference to a subcontractor beneficiary in association with a reference to a project trust is a reference to a subcontractor beneficiary for the trust; and

(g)a reference to a trustee in association with a reference to a project trust account is a reference to the trustee for the trust to which the account relates.

Division 2 Project trusts

11   What is a project trust

A project trust is a trust—

(a)over amounts—

(i)payable in connection with a project trust contract or project trust subcontract; and

(ii)required to be deposited in the project trust account under this chapter; and

(b)primarily for the benefit of subcontractors for the project trust contract.

11A   Trustee and beneficiaries of project trust

(1)The contracted party for a project trust contract is both the trustee and a beneficiary of the project trust for the contract.

(2)The contracted party—

(a)becomes the trustee and a beneficiary of the project trust when the trust is established; and

(b)ceases to be the trustee and a beneficiary of the project trust when the trust is lawfully dissolved.

(3)A subcontractor for a project trust subcontract for a project trust contract is a beneficiary of the project trust for the contract.

(4)The subcontractor—

(a)becomes a beneficiary of the project trust when—

(i)a project trust subcontract is entered into with the subcontractor; or

(ii)a subcontract for which the subcontractor is the contracted party becomes a project trust subcontract; and

(b)ceases to be a beneficiary of the project trust when—

(i)the subcontractor is paid all amounts the subcontractor is entitled to be paid in connection with all project trust subcontracts for which the subcontractor is the contracted party; and

(ii)the trust is lawfully dissolved.

11B   What are the beneficial interests in a project trust

(1)The beneficiaries of a project trust for a contract have a beneficial interest in—

(a)for a subcontractor for the contract (as beneficiary)—all amounts the subcontractor is entitled to be paid in connection with project trust subcontracts; or

(b)for the contracted party for the contract (as beneficiary)—the remainder for the trust.

(2)In this section—

remainder, for a project trust, means the amount still held in trust after subtracting all amounts subcontractor beneficiaries are entitled to be paid in connection with project trust subcontracts.

Division 3 Contracts requiring project trusts

Subdivision 1 When project trust required

12   When project trust required for a contract

(1)This section applies to a contract entered into on or after the commencement of this section.

(2)A project trust is required for a contract if—

(a)the contract is eligible for a project trust under subdivision 2; and

(b)the contract is not exempted under subdivision 3; and

(c)the contracted party enters into a subcontract for all or part of the contracted work.

(3)The requirement starts on the first day a project trust is required under subsection (2).

(4)The requirement continues until the project trust is dissolved under section 21, regardless of any of the following changes—

(a)a variation, or any other amendment, of the contract;

(b)a change in the contract price;

(c)a change in the contracted work.

(5)If a project trust is required for a contract and a project trust is also required for a subcontract of the contract, separate project trusts are required for the contract and the subcontract.

13   [Repealed]

Subdivision 2 Eligible contracts

14   Eligibility of contract for project trust when contract entered into

(1)A contract is eligible for a project trust if—

(a)the contracting party is the State, a state authority, a local government, an individual, a private entity or a hospital and health service; and

(b)more than 50% of the contract price is for project trust work; and

(c)the contract price is—

(i)if the contracting party is the State or a hospital and health service—$1 million or more; or

(ii)otherwise—$10 million or more.

(2)Also, a contract is eligible for a project trust if—

(a)the contracting party is a State authority that has decided a project trust is to be established for the contract; and

(b)more than 50% of the contract price is for project trust work; and

(c)the contract price is $1 million or more.

(3)This section applies to a contract at the time the contract is entered into.

(4)In this section—

private entity—

(a)means a company or other entity that is owned by any entity other than the State; but

(b)does not include a State authority.

State does not include a State authority.

14A   Eligibility of contract for project trust when contract amended

(1)A contract does not cease to be eligible for a project trust because of an amendment of the contract.

(2)A contract that was not, at the time it was entered into, eligible for a project trust becomes eligible for a project trust on the amendment of the contract if—

(a)the contract is amended; and

(b)the contract would have been eligible for a project trust had it been in its amended form, including any earlier amendments, when it was entered into; and

(c)the amended contract—

(i)increases the original percentage of the contract price that is for project trust work by 30% or more; or

(ii)increases the original contract price by 30% or more.

14B   Multiple contracts at same site or adjacent sites

(1)This section applies if—

(a)the same parties enter into 2 or more separate contracts; and

(b)the separate contracts are for carrying out project trust work at the same site or adjacent sites.

(2)The separate contracts are taken to be a single contract (the larger contract) for the purpose of applying this division.

Example—

The larger contract would be eligible for a project trust if the contract would be eligible for a project trust under section 14.

(3)To remove any doubt, it is declared that the exemptions under subdivision 3 apply only to the larger contract and not to the separate contracts.

Note—

If the separate contracts are for small scale residential construction work under section 15C, the exemption under section 15C does not apply to exclude the separate contracts from being taken to be a single contract under subsection (2).

(4)This section does not apply to separate contracts entered into as a result of separate tender processes.

14C   Subcontracts with related entities require project trusts

(1)A subcontract is eligible for a project trust if—

(a)the subcontract is a first tier subcontract for a head contract; and

(b)a project trust is required for the head contract; and

(c)the subcontractor is a beneficiary of the project trust for the head contract; and

(d)the subcontractor is a related entity for the contracted party for the head contract.

Note—

The contracted party for the head contract would also be the contracting party for the subcontract.

(2)To remove any doubt, it is declared that the subcontractor continues to be a beneficiary of the project trust for the head contract.

14D   Prescribed contracts require project trusts

A contract is eligible for a project trust if it is of a type of contract prescribed by regulation.

14E   Prescribed subcontracts require project trusts

(1)A subcontract is eligible for a project trust if—

(a)the subcontract is a first tier subcontract for a head contract; and

(b)a project trust is required for the head contract; and

(c)the subcontractor is a beneficiary of the project trust for the head contract; and

(d)the subcontract is a type of subcontract prescribed by regulation.

(2)To remove any doubt, it is declared that the subcontractor continues to be a beneficiary of the project trust for the head contract.

Subdivision 3 Exempt contracts

15   Subcontracts generally

A project trust is not required for a subcontract unless it is a type of subcontract to which section 14C or 14E apply.

15A   Contracts with particular entities

A project trust is not required for a contract if the contracting party or contracted party is an entity prescribed by regulation.

15B   Contracts between the State and a state authority

A project trust is not required for a contract if the only parties to the contract are the State and a state authority.

15C   Contracts for small scale residential construction work

(1)A project trust is not required for a contract if the only project trust work to be carried out under the contract is residential construction work for less than 3 living units.

(2)For subsection (1)—

(a)a single detached dwelling is taken to be 1 living unit; and

(b)a residential unit is taken to be 1 living unit; and

(c)a duplex is taken to be 2 living units.

(3)In this section—

residential construction work means the type of work prescribed by regulation.

residential unit means a part of a building designed for separate occupation as a residence.

15D   Contracts for maintenance work

(1)A project trust is not required for a contract if the only project trust work to be carried out under the contract is maintenance work.

(2)In this section—

maintenance work—

(a)means—

(i)testing; and

(ii)taking samples and restoring the sample site; and

(iii)work required on an ongoing basis to—

(A)prevent deterioration or failure of a thing; or

(B)restore a thing to its correct operating specifications; or

(C)replace a component at the end of its working life; but

(b)does not include—

(i)improving a building to increase its capabilities or functions; or

(ii)improving a building to meet new statutory requirements applying to the building; or

(iii)a refurbishment or replacement of a building that extends the life of the building.

15E   Contracts for professional design, advisory or contract administration work

(1)A project trust is not required for a contract if the only work to be carried out under the contract is advisory work or design work carried out, either directly or indirectly, by—

(a)an architect under the Architects Act 2002; or

(b)a registered professional engineer under the Professional Engineers Act 2002; or

(c)a building designer; or

(d)a person who carries on a business as a landscape architect.

(2)Also, a project trust is not required for a contract if the only work to be carried out under the contract is contract administration carried out, either directly or indirectly, by a person mentioned in subsection (1) for the construction of a building wholly or partly designed by the person.

(3)In this section—

advisory work means—

(a)the inspection or investigation of a building; or

(b)the provision of advice or a report about a building.

building designer means a person who holds a licence of a class mentioned in the Queensland Building and Construction Commission Regulation 2018, schedule 2, part 11, 12 or 13.

design work means the preparation of plans or specifications for project trust work.

15F   Contracts with less than 90 days until practical completion

(1)A project trust is not required for a contract if there is less than 90 days between—

(a)the first day a project trust would, apart from this section, be required for the contract (the trigger date); and

Note—

If the effect of an amendment of a contract is that the contract becomes eligible for a project trust for the first time, the trigger date is the day the amendment takes effect. See section 14A.

(b)the day practical completion for the contracted work is expected to occur.

(2)If a project trust is not required for a contract because of subsection (1), the contracted party must review the application of this section to the contract each time an amendment of the contract is made that is likely to affect the day practical completion for the contracted work is expected to occur.

(3)In this section—

practical completion, for contracted work for a contract, means—

(a)practical completion as provided for under the contract; or

(b)if the contract does not provide for practical completion—when the contracted work would reasonably be estimated to be completed—

(i)in compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work; and

(ii)without any defects or omissions, other than minor defects or minor omissions that will not unreasonably affect the intended use of the work.

16   [Repealed]

Division 4 Project trust administration

Subdivision 1 Establishing project trusts

17   Establishment of project trust

Once a project trust is required for a contract under section 12, the trust is established by the first of the following being made after the trust is required—

(a)payment of an amount from the contracting party to the contracted party under the contract;

(b)payment of an amount from the contracted party to a subcontractor beneficiary for subcontracted work under the contract;

(c)a deposit in the project trust account as required under this chapter.

Subdivision 2 Project trust accounts

18   Contracted party must open project trust account

(1)If a project trust is required for a contract under section 12, the contracted party must open an account at a financial institution for the trust as required by this section.

Maximum penalty—500 penalty units.

(2)The project trust account must be opened within 20 business days after the contracted party enters into the first subcontract for the contract.

(3)However—

(a)if a project trust is not required for the contract until after an amendment of the contract; and

Note—

See section 14A about amendments of contracts affecting the requirement to establish a project trust.

(b)the contracted party entered into a subcontract for the contract before the amendment of the contract;

      the project trust account must be opened within 20 business days after the day the contract is amended.

(4)The project trust account must not be a virtual account or subordinate to any other account at a financial institution.

(5)There must not be more than 1 project trust account for the project trust.

(6)A provision of a contract that provides that the project trust account must be opened less than 20 business days after the contract is entered into is of no effect.

18A   Restrictions for project trust account

(1)A trustee must ensure the project trust account is held at an approved financial institution.

Maximum penalty—200 penalty units.

(2)A trustee must ensure the project trust account is held under a name that includes the trustee’s name and the word ‘trust’.

Maximum penalty—200 penalty units.

(3)A trustee must ensure that deposits of amounts to, and withdrawals of amounts from, the project trust account are made using only methods that create an electronic record of the transfer.

Maximum penalty—500 penalty units.

18B   Notice of project trust account’s opening, closing or name change

(1)This section applies if a trustee, or another person on behalf of a trustee, takes any of the following actions in relation to the project trust account—

(a)opens the account;

(b)changes the name of the account;

(c)closes the account;

(d)transfers the account.

(2)Within 5 business days after taking the action, the trustee must give to the contracting party, and must give to the commissioner using an approved way, a notice—

(a)stating the action taken; and

(b)including the information prescribed by regulation.

Maximum penalty—200 penalty units.

18C   Change of financial institution

(1)A trustee must not transfer the project trust account to an alternative financial institution unless—

(a)the alternative financial institution is an approved financial institution; and

(b)all amounts held in the account are transferred with the account to the alternative financial institution; and

(c)the trustee informs the contracting party, the commissioner and the subcontractor beneficiaries about the transfer as prescribed by regulation.

Maximum penalty—200 penalty units.

Note—

See, also, section 18B for the trustee’s obligation to inform the contracting party and the commissioner of closing and opening a project trust account.

(2)When transferring the project trust account to an alternative financial institution, the trustee may withdraw the amounts of interest credited to the account by a financial institution, if the withdrawal is authorised under section 51D.

(3)Nothing in this section enables the trustee to have more than 1 project trust account for a project trust at the same time beyond the period necessary to transfer the project trust account.

(4)In this section—

alternative financial institution, for a project trust account, means a financial institution that is not the financial institution at which the account is currently kept.

Subdivision 3 Payments to project trust account

19   All payments from contracting party to be deposited in project trust account

(1)This section applies to any of the following amounts paid by the contracting party to the contracted party in connection with a project trust contract—

(a)an amount paid in accordance with the terms of the contract;

(b)an amount paid because the contracting party is liable under section 77 to pay the amount to the contracted party in connection with the contract;

(c)an amount paid under chapter 3, part 4 because of an adjudication of a disputed progress payment relating to the contract;

(d)an amount paid because of a final and binding dispute resolution process relating to the contract;

(e)an amount paid because of a court order relating to the contract;

(f)an amount, paid for any other reason, that reduces the unpaid amount of the contract price for the contract.

(2)The contracting party must deposit the amount into the project trust account for the contract (the deposit obligation) unless—

(a)the amount was due to be paid before the trust was established; or

(b)the amount is paid into court; or

(c)the amount is to be withheld because of a payment withholding request given to the contracting party under section 97B; or

(d)the amount is paid directly to a person under chapter 4 in connection with a subcontractor’s charge; or

(e)the contracting party has a reasonable excuse for failing to deposit the amount into the account.

Maximum penalty—200 penalty units.

(3)Once the amount is deposited into the project trust account, the deposit is taken to be a payment made by the contracting party to the contracted party and discharges the contracting party’s liability to pay that amount to the contracted party.

(4)If an amount is paid to the contracted party or its agent in contravention of the deposit obligation, the contracted party must deposit the amount into the project trust account as soon as practicable after receiving the amount.

Maximum penalty for subsection (4)—200 penalty units or 2 years imprisonment.

19A   Limited purposes for which money may be deposited in project trust account

(1)A trustee must not cause an amount to be deposited into the project trust account for any purpose other than—

(a)paying the trustee, as the contracted party, an amount the contracting party must deposit into the account under section 19; or

(b)paying a subcontractor beneficiary an amount the subcontractor is entitled, or may become entitled, to be paid in connection with a project trust subcontract; or

(c)repaying an amount withdrawn from the account in error; or

(d)making another payment prescribed by regulation.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2)This section does not apply to an amount of interest credited to the project trust account by a financial institution.

Subdivision 4 Payments from project trust account

20   All payments to subcontractor beneficiaries to be paid from project trust account

(1)The contracted party for a project trust contract may only pay an amount to a subcontractor beneficiary of the project trust—

(a)from the project trust account; and

(b)by depositing the amount into the account of a financial institution nominated by the beneficiary.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2)To remove any doubt, it is declared that the obligation to pay an amount from the project trust account applies whether or not the amount is held in the account when it is to be paid.

Note—

See section 51 about covering shortfalls.

(3)The account nominated by the subcontractor beneficiary under subsection (1)(b) must be—

(a)controlled by the beneficiary; and

(b)if the beneficiary is also required to establish a project trust for its subcontract—the account for the project trust for the subcontract.

(4)This section does not apply to—

(a)a retention amount withheld from payment to a subcontractor beneficiary if the amount is deposited into a retention trust account of which the subcontractor is, or will be, a beneficiary; and

(b)a retention amount to be released to a subcontractor beneficiary from a retention trust account.

20A   Limited purposes for which money may be withdrawn from project trust account

(1)A trustee must not withdraw an amount from the project trust account for any purpose other than—

(a)paying a subcontractor beneficiary an amount the contracted party is liable to pay the beneficiary in connection with its subcontract; or

(b)paying the trustee, as the contracted party, an amount the contracting party is liable to pay the contracted party for contracted work but only to the extent a subcontractor beneficiary is not entitled to be paid for the same work; or

(c)returning an amount paid in error by the contracting party; or

(d)depositing a retention amount into a retention trust account; or

(e)making payment relating to the contract in accordance with an adjudication under chapter 3, part 4; or

(f)making payment relating to the contract as ordered by a court; or

(g)making another payment prescribed by regulation.

Maximum penalty—300 penalty units or 2 years imprisonment.

(2)A trustee must repay all amounts it withdraws in contravention of subsection (1) as soon as practicable after the trustee becomes aware the withdrawal is in contravention of that subsection.

Maximum penalty—300 penalty units or 2 years imprisonment.

(3)A trustee is taken to have withdrawn an amount from the project trust account if—

(a)the trustee authorises any person to make the withdrawal; or

(b)the trustee knowingly contributes to the withdrawal being made.

(4)This section does not apply to the withdrawal of an amount for the project trust account for—

(a)an amount of interest authorised to be withdrawn under section 51D; or

(b)an amount for fees charged by the approved financial institution for the project trust account.

20B   Order of priority

A trustee must not withdraw an amount from the project trust account to pay itself, or make another payment prescribed by regulation, unless there would still be a sufficient amount available in the account after the withdrawal to pay all amounts the contracted party is liable to pay subcontractor beneficiaries at the time of the withdrawal.

Maximum penalty—300 penalty units or 2 years imprisonment.

20C   Insufficient amounts available for payments

(1)This section applies if—

(a)a project trust is established for a contract; and

(b)the contracted party is liable to pay 2 or more subcontractor beneficiaries (each a claimant) an amount at the same time; and

(c)the total amount held in the project trust account is insufficient to satisfy in full all of the amounts liable to be paid to the claimants; and

(d)when an amount liable to be paid to a claimant is due to be paid, the contracted party has not complied with its obligation under section 51 to cover the insufficient amount.

(2)The amount to be paid by the contracted party to each claimant is to be reduced in proportion to the amounts liable to be paid to each.

Example—

If one subcontractor beneficiary is to be paid $50,000 and another subcontractor beneficiary is to be paid $30,000 but only $40,000 is available, the beneficiaries are to be paid $25,000 and $15,000 respectively.

(3)If the contracted party makes a payment complying with subsection (2), the party must, using an approved way, inform the commissioner of the payment as soon as practicable after making it.

Maximum penalty—100 penalty units.

(4)While there continues to be an insufficient amount held in the project trust account, the contracted party must not pay a subcontractor beneficiary unless the payment complies with subsection (2).

Maximum penalty—100 penalty units or 1 year’s imprisonment.

(5)Nothing in this section relieves the contracted party of the party’s liability to pay in full the amounts the subcontractor beneficiaries are entitled to be paid in connection with project trust subcontracts.

Subdivision 5 Ending project trust

21   Ending project trust

(1)Once a project trust is established for a contract, the trustee may dissolve the trust only if—

(a)there are no longer any subcontractor beneficiaries for the trust; or

(b)the only remaining work to be carried out under the contract is maintenance work.

(2)A project trust is dissolved by the trustee—

(a)closing the project trust account; and

(b)giving written notice to the commissioner of the trust having been dissolved.

(3)A trustee is taken not to dissolve the project trust by closing the project trust account if the account was only closed for the purpose of transferring the account to another financial institution under section 18C.

(4)When dissolving the project trust, the trustee may pay itself the following amounts—

(a)any amount for interest that the trustee is entitled to under section 51D;

(b)any remaining amount that is not owing to a subcontractor beneficiary.

(5)In this section—

maintenance work see section 15D(2).

21A   Unauthorised dissolution of project trust

(1)A person must not purport to dissolve a project trust before it may be dissolved under section 21(1).

Maximum penalty—500 penalty units or 1 year’s imprisonment.

(2)Without limiting subsection (1), the person is taken to purport to dissolve a project trust if the person closes the account for the trust while it is still required.

(3)Subsection (2) does not apply to a person transferring the project trust account to another financial institution under section 18C.

22   [Repealed]

Division 5 Information sharing

23   Notice of project trust before entering subcontracts

(1)The contracted party for a project trust contract must give each subcontractor a notice about the use of a project trust account (notice of project trust) as required by this section.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2)The notice of project trust must—

(a)be in writing; and

(b)include a statement that a project trust will be used for making payments to the subcontractor; and

(c)include the information prescribed by regulation.

(3)The notice of project trust must be given to the subcontractor—

(a)if the project trust is not yet established when the contracted party and the subcontractor enter into a subcontract—within 10 business days after the trust is established; or

(b)if the project trust is already established when the contracted party and the subcontractor enter into a subcontract—before the contracted party and the subcontractor enter into a subcontract.

(4)However—

(a)if a project trust is not required for a contract until after an amendment of the contract; and

Note—

See section 14A about amendments of a contract affecting the requirement to establish a project trust.

(b)the contracted party entered into a subcontract for the contract before the amendment of the contract;

      the notice of project trust must be given within 10 business days after opening the project trust account.

23A   Subcontractor beneficiary to be informed of particular withdrawals

(1)This section applies if—

(a)a withdrawal is made from a project trust account to make a payment to a subcontractor beneficiary; or

(b)a withdrawal is made from a project trust account to deposit an amount, withheld from payment to a subcontractor beneficiary, in a retention trust account for the benefit of the subcontractor beneficiary.

(2)Within 5 business days after making the withdrawal, the trustee for the project trust must give the subcontractor beneficiary a notice of the withdrawal that includes the information prescribed by regulation, unless the trustee has a reasonable excuse.

Maximum penalty—100 penalty units.

23B   Subcontractor beneficiary may request particular information

(1)A person who is, or was, a subcontractor beneficiary of a project trust may, in writing, request the trustee give the person the following information to the extent it relates to the person—

(a)a statement of balance for the project trust account;

(b)a copy of the transactions for the project trust account;

(c)a copy of the trust records;

(d)a copy of supporting statements given to the contracting party with the payment claims made by the trustee as the contracted party.

(2)The trustee must give the person the requested information within 10 business days after being given the request, unless—

(a)the trustee has a reasonable excuse; or

(b)the information is already available to the person; or

(c)the information has not changed since it was previously given to the person.

Maximum penalty—100 penalty units.

(3)The requested information must be given to the person in writing and any words used in the information to explain a transaction must be in the English language.

(4)It is not a reasonable excuse for the trustee to fail to comply with the request on the grounds that complying with the request might tend to incriminate the trustee or expose the trustee to a penalty.

(5)In this section—

supporting statement see section 75(9).

Division 6 Obligations of contracting party

24   Contracting party to report related entities

(1)This section applies if—

(a)a project trust is established for a contract; and

(b)the contracting party knows, or ought reasonably to know, that a subcontractor beneficiary is a related entity for the contracted party.

(2)The contracting party must, using an approved way, inform the commissioner of the matter within 5 business days after the party first becomes aware, or ought reasonably to have become aware, of the matter.

Maximum penalty—50 penalty units.

24A   Contracting party to report failure to establish project trust

(1)This section applies if the contracting party for a contract knows or ought reasonably to know—

(a)a project trust is required for the contract; and

(b)a project trust account has not been opened for the trust as required under section 18.

(2)The contracting party must, using an approved way, report the matter to the commissioner.

Maximum penalty—100 penalty units.

Division 7 Other matters

25   Contracted party to report related entities

(1)This section applies if—

(a)a project trust is established for a contract; and

(b)the contracted party enters into a subcontract with a related entity for the party.

(2)The contracted party must, using an approved way, inform the commissioner about entering into the subcontract with the related entity within 5 business days after entering into the subcontract.

Maximum penalty—200 penalty units.

25A   Limited liability of contracting party

Nothing in this part creates or supports a right of action against the contracting party for a contract by a subcontractor, or the contracted party, as a beneficiary of a project trust for the contract.

25B   No assignment of entitlement by contracted party

An assignment by the contracted party of an entitlement of the party to an amount held in trust for a project trust is of no effect.

Part 3    Retention trusts

Division 1 Preliminary

30   Definitions for part

In this part—

building contract see Queensland Building and Construction Commission Act 1991, section 67AAA.

minimum contract price means the contract price amount prescribed by regulation.

retention trust see section 31.

retention trust account means the account for a retention trust at a financial institution.

30A   References to particular terms in this part

In this part—

(a)a reference to a contract in association with a reference to a retention trust is a reference to the contract for which the trust is required; and

(b)a reference to a contracting party in association with a reference to a retention trust is a reference to the contracting party for the contract for which the trust is required; and

(c)a reference to a contracted party in association with a reference to a retention trust is a reference to the contracted party for the contract for which the trust is required; and

(d)a reference to a trustee in association with a reference to a retention trust or a contract for which a retention trust is required is a reference to the trustee for the retention trust.

Division 2 Retention trusts

31   What is a retention trust

A retention trust is a trust—

(a)over the following amounts—

(i)retention amounts withheld in the form of cash under particular contracts, inclusive of any GST related to those amounts;

(ii)deposits in the retention trust account as required under this chapter; and

(b)primarily for the benefit of the party who will be entitled to the retention amount.

31A   Who are the trustee and beneficiaries of a retention trust

(1)This section applies to a retention trust established for retention amounts withheld from payment under a contract (the retention trust contract).

(2)The contracting party is both the trustee and a beneficiary of the retention trust.

(3)The contracting party—

(a)becomes the trustee and a beneficiary of the retention trust when the trust is established; and

(b)ceases to be the trustee and a beneficiary of the retention trust when the trust is dissolved.

(4)The contracted party is a beneficiary of the retention trust.

(5)The contracted party—

(a)becomes a beneficiary of the retention trust when a retention amount is withheld from payment to the party under the retention trust contract; and

(b)ceases to be a beneficiary of the retention trust when paid all retention amounts it has a beneficial interest in and the trust is lawfully dissolved.

Note—

A retention amount need only be released to a contracted party when required under the relevant contract.

31B   What are the beneficial interests in a retention trust

(1)The beneficiaries of a retention trust have a beneficial interest in—

(a)for the contracted party as beneficiary—all retention amounts held in the trust that were withheld from payment to the contracted party; or

(b)for the contracting party as beneficiary—all amounts held in the trust after subtracting the beneficial interests mentioned in paragraph (a).

Note—

The contracting party’s beneficial interest will generally only exist once the contracted party’s beneficial interest has ended under subsection (2).

(2)However, the contracted party’s beneficial interest in a retention amount ends—

(a)if and when the contracting party becomes entitled to be paid the amount under the relevant contract; and

(b)to the extent the contracting party becomes entitled to be paid the amount under the relevant contract.

Example of when the contracting party becomes entitled to be paid a retention amount—

The contracting party becomes entitled under the contract to be paid a retention amount to pay for corrections to defects in the contracted work.

Division 3 When retention trusts required

32   When retention trust required

(1)A retention trust is required for a retention amount withheld from payment under a contract if—

(a)the contract is a withholding contract at the time the retention amount is withheld; and

(b)the retention amount is withheld by the contracting party in the form of cash.

(2)Also, a retention trust is required for a retention amount withheld from payment under a contract if—

(a)the contract was not a withholding contract at the time the retention amount was withheld but the contract has since become a withholding contract; and

(b)the contract is a first tier subcontract; and

(c)the retention amount was withheld by the contracting party in the form of cash; and

(d)the retention amount had not been released to the parties entitled to it at the time the contract became a withholding contract.

(3)The requirement starts, or is taken to have started, on the first day the contracting party withholds the retention amount from payment.

(4)The requirement continues until all of the retention amount has been released to the parties entitled to it under the withholding contract, regardless of any of the following changes—

(a)a variation, or any other amendment, of the contract;

(b)a change in the contracted work.

(5)This section does not apply to a retention amount withheld from payment under a contract if—

(a)the contracting party is the State, the Commonwealth, a state authority, a local government or another entity prescribed by regulation; or

(b)the contract price for the contract is at least the minimum contract price.

(6)In this section—

withholding contract means—

(a)a project trust contract that is—

(i)a head contract; or

(ii)a subcontract that is eligible for a project trust under section 14C or 14D; or

(b)a project trust subcontract for a project trust contract mentioned in paragraph (a).

Division 4 Retention trust administration

Subdivision 1 Establishing retention trusts

33   Establishment of retention trust

(1)This section applies if, under section 32, a retention trust is required for a retention amount withheld from payment under a contract.

(2)The retention trust is established by the contracting party withholding the retention amount from payment.

33A   Charge over retention amounts held in retention trust

(1)This section applies if, under section 32, a retention trust is required for a retention amount withheld from payment under a contract.

(2)In addition to the retention trust, the retention amount is also subject to a charge in favour of the contracted party for securing the release of the amount when the party becomes entitled to the amount.

(3)However, if and when the contracting party becomes entitled to be paid part of the retention amount under the contract, the charge is released over that part of the retention amount.

(4)The contracted party may enforce the charge as if the charge had been given to it under a written agreement between it and the contracting party.

(5)An act done to defeat, or purporting to operate so as to defeat, the charge is of no effect against the contracted party.

(6)The charge is declared to be a statutory interest to which the Personal Property Securities Act 2009 (Cwlth), section 73(2) applies.

(7)The charge is inclusive of any GST related to the amount.

Subdivision 2 Retention trust accounts

34   Contracting party withholding retention amount must open retention trust account

(1)This section applies if, under section 32, a retention trust is required for a retention amount withheld from payment under a contract.

(2)The contracting party must open an account for the retention trust at a financial institution—

(a)if the retention trust is required under section 32(1)—before the retention amount is withheld; or

(b)if the retention trust is required under section 32(2)—within 20 business days after the contract becomes a withholding contract.

Maximum penalty—500 penalty units.

(3)However, the contracting party need only establish 1 retention trust account for all retention amounts withheld by the party under any number of contracts for which it is the contracting party.

34A   Restrictions for retention trust account

(1)A trustee must ensure the retention trust account is held at an approved financial institution.

Maximum penalty—200 penalty units.

(2)A trustee must ensure the retention trust account is held under a name that includes the trustee’s name and the word ‘trust’.

Maximum penalty—200 penalty units.

(3)A trustee must ensure that deposits of amounts to, and withdrawals of amounts from, the retention trust account are made using only methods that create an electronic record of the transfer.

Maximum penalty—500 penalty units.

(4)A trustee must not close the retention trust account unless—

(a)all retention amounts held in the account have been released to the parties entitled to it under the relevant contracts; or

(b)the account is transferred to an alternative financial institution under section 34C.

Maximum penalty—200 penalty units.

34B   Notice of retention trust account’s opening, closing or name change

(1)This section applies if a trustee, or another person on behalf of the trustee, takes any of the following actions in relation to the retention trust account—

(a)opens the account;

(b)changes the name of the account;

(c)closes the account;

(d)transfers the account.

(2)Within 5 business days after taking the action, the trustee must, using an approved way, give the commissioner a notice—

(a)stating the action taken; and

(b)including the information prescribed by regulation.

Maximum penalty—200 penalty units.

34C   Change of financial institution

(1)A trustee must not transfer the retention trust account to an alternative financial institution unless—

(a)the alternative financial institution is an approved financial institution; and

(b)all amounts held in the account are transferred with the account to the alternative financial institution; and

(c)the trustee informs all contracted parties, from whom retention amounts held in the account have been withheld from payment, about the transfer as prescribed by regulation.

Maximum penalty—200 penalty units.

Note—

See, also, section 34B for the trustee’s obligation to inform the commissioner of closing and opening a retention trust account.

(2)When transferring the retention trust account to an alternative financial institution, the trustee may withdraw the amounts of interest credited to the account by a financial institution.

(3)In this section—

alternative financial institution, for a retention trust account, means a financial institution that is not the financial institution at which the account is currently kept.

Subdivision 3 Payments to retention trust account

35   All retention amounts withheld must be deposited in retention trust account

(1)This section applies if, under section 32, a retention trust is required for a retention amount withheld from payment under a contract.

(2)The contracting party must deposit the retention amount withheld under the contract in a retention trust account (the deposit obligation) as follows—

(a)if the retention trust is required under section 32(1)—when the retention amount is withheld;

(b)if the retention trust is required under section 32(2) and there is an existing retention trust account into which the retention amount may be deposited—within 5 business days after the contract becomes a withholding contract;

(c)if the retention trust is required under section 32(2) and there is no existing retention trust account into which the retention amount may be deposited—when the retention trust account is opened.

Maximum penalty—200 penalty units or 2 years imprisonment.

(3)A term of a contract is of no effect to the extent it is inconsistent with the deposit obligation.

(4)The retention amount to which the deposit obligation relates is inclusive of any GST related to the amount.

35A   Limited purposes for which money may be deposited in retention trust account

(1)A trustee must not cause an amount to be deposited into the retention trust account for any purpose other than—

(a)withholding a retention amount from payment under a contract for which the trustee is the contracting party; or

(b)repaying an amount withdrawn in error.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2)This section does not apply to a deposit of an amount that is interest earned on amounts held in a retention trust account.

Subdivision 4 Payments from retention trust account

36   Limited purposes for which money may be withdrawn from retention trust account

(1)A trustee must not withdraw an amount from the retention trust account for any purpose other than—

(a)paying a beneficiary who is a contracted party from whom a retention amount was withheld from payment; or

(b)paying the trustee, as contracting party, for the purpose of correcting defects or omissions in contracted work, or otherwise to secure, wholly or partly, the performance of a contract; or

(c)paying another person for the purpose of correcting defects or omissions in contracted work.

Note—

As the contracting party for a contract, the trustee’s ability to make a payment mentioned in paragraph (a), (b) or (c) would be governed by the contract under which the retention amount was withheld.

Maximum penalty—300 penalty units or 2 years imprisonment.

(2)A trustee must not withdraw an amount from the retention trust account for a payment mentioned in subsection (1)(b) until after the defects liability period, applying to the amount, ends.

Maximum penalty—300 penalty units or 2 years imprisonment.

(3)The trustee must repay all amounts the trustee withdraws in contravention of subsection (1) as soon as practicable after withdrawing the amount.

Maximum penalty—300 penalty units or 2 years imprisonment.

(4)The trustee is taken to have withdrawn an amount from the retention trust account if—

(a)the trustee authorises any person to make the withdrawal; or

(b)the trustee knowingly contributes to the withdrawal being made.

(5)This section does not apply to that part of a retention amount withheld from payment under a contract that is beyond the amount that may be lawfully withheld under the contract.

Note—

See the Queensland Building and Construction Commission Act 1991, part 4A for limits on retention amounts that may be withheld from payment under a contract.

36A   All retention amounts withheld to be released from retention trust account

(1)This section applies if a contracted party becomes entitled to the release of a retention amount held in a retention trust.

(2)The trustee must not release the retention amount other than by—

(a)withdrawing the amount from the retention trust account; and

(b)depositing the amount into the contracted party’s account at a financial institution.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

36B   [Repealed]

36C   [Repealed]

Subdivision 5 Ending retention trust

37   Ending retention trust

(1)If a retention trust is established for a retention amount withheld from payment under a contract, the trust is dissolved if all of the amount has been released to the parties entitled to it under the contract.

(2)On the dissolution of a retention trust, the trustee may pay itself all amounts held in the trust that are not owing to another beneficiary.

37A   Unauthorised dissolution of retention trust

(1)A trustee must not purport to dissolve the retention trust before it is dissolved under section 37(1).

Maximum penalty—500 penalty units or 1 year’s imprisonment.

(2)Without limiting subsection (1), a trustee is taken to purport to dissolve the retention trust if the trustee closes the retention trust account while the trust is still required under section 32.

(3)Subsection (2) does not apply to a trustee transferring the retention trust account to another financial institution under section 34C.

38   [Repealed]

39   [Repealed]

Division 5 Information sharing

40   Notice of retention trust before withholding retention amount

(1)If, under section 32, a retention trust is required for a retention amount withheld from payment under a contract, the contracting party must give the contracted party a notice about the use of a retention trust (notice of retention trust) as required by this section.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2)The notice of retention trust must—

(a)be in writing; and

(b)include a statement that a retention trust will be used for withholding retention amounts under the contract; and

(c)include the information prescribed by regulation.

(3)The notice of retention trust must be given to the contracted party before withholding the retention amount.

(4)However, if the retention trust account was not opened before the retention trust is required under section 32, the notice of retention trust must be given to the contracted party within 5 business days after opening the account.

40A   Beneficiary to be informed of transactions affecting retention amount

(1)This section applies if a trustee—

(a)deposits a retention amount into the retention trust account; or

(b)withdraws all or part of a retention amount held in the retention trust account.

(2)Within 5 business days after making the deposit or withdrawal, the trustee must give to the contracted party from whom the retention amount was withheld a notice of the deposit or withdrawal that includes the information prescribed by regulation, unless the trustee has a reasonable excuse.

Maximum penalty—100 penalty units.

(3)This section does not apply to the deposit of a retention amount if the trustee has informed the contracted party of the deposit under section 23A.

40B   Beneficiary may request particular information

(1)A person who is, or was, a beneficiary of a retention trust may, in writing, request the trustee give the person the following information to the extent it relates to the person—

(a)a statement of balance for the retention trust account;

(b)a copy of the transactions affecting the retention trust account;

(c)a copy of the trust records.

(2)The trustee must give the person the requested information within 10 business days after being given the request, unless—

(a)the trustee has a reasonable excuse; or

(b)the information is already available to the person; or

(c)the information has not changed since it was previously given to the person.

Maximum penalty—100 penalty units.

(3)The requested information must be given to the person in writing and any words used in the information to explain a transaction must be in the English language.

(4)It is not a reasonable excuse for the trustee to fail to comply with the request on the grounds that complying with the request might tend to incriminate the trustee or expose the trustee to a penalty.

(5)In this section—

trust records see section 52(1).

Division 6 Compulsory training

41   Retention trust training

(1)This section applies if, under section 32, a retention trust is required for a retention amount withheld from payment under a contract.

(2)If the trustee will not be responsible for administering the retention trust account, the trustee must nominate a person who is responsible for administering the retention trust account on behalf of the trustee.

(3)The trustee may change the nomination mentioned in subsection (2) at any time and must make another nomination if the previous nominee is no longer responsible for administering the retention trust account.

(4)The trustee must, using an approved way, inform the commissioner of each nomination made under subsection (2).

(5)The trustee must ensure each person nominated under subsection (2) completes the training prescribed by regulation (the retention trust training) within the period required by regulation.

Maximum penalty—100 penalty units.

(6)If the trustee does not nominate a person under subsection (2), the trustee must complete retention trust training within the period required by regulation.

Maximum penalty—100 penalty units.

(7)A regulation may—

(a)prescribe a fee for retention trust training; or

(b)provide for—

(i)an extension of time for a trustee or nominee to complete retention trust training; or

(ii)an exemption of a trustee from complying with subsection (5) or (6).

(8)Subsections (5) and (6) apply to a trustee subject to an extension or exemption under subsection (7) applying to the trustee.

(9)The trustee is liable for all costs associated with the trustee or a nominated person completing the retention trust training.

42   [Repealed]

43   [Repealed]

Division 7 Other matters

43A   No assignment of entitlement by contracting party

An assignment by the contracting party of an entitlement of the party to an amount held in trust for a retention trust is of no effect.

Division 8 [Repealed]

44   [Repealed]

45   [Repealed]

46   [Repealed]

47   [Repealed]

48   [Repealed]

49   [Repealed]

Part 4    Common provisions for project trusts and retention trusts

Division 1 Preliminary

50   Definitions for part

In this part—

account review report see section 57A(1).

auditor means—

(a)a person registered as an auditor under the Corporations Act, part 9.2; or

(b)a person prescribed by regulation to be an auditor.

chapter 2 requirement means a requirement, applying to a trustee under chapter 2, in relation to the administration of a trust account.

registered company auditor ...

trust account means a project trust account or retention trust account.

Division 2 Powers, obligations and restrictions for trustees

51   Trustee to cover shortfalls

(1)This section applies if there is an insufficient amount available in a trust account to pay an amount due to be paid to a beneficiary of the trust.

(2)The trustee must immediately deposit an amount equal to the shortfall in the trust account (a shortfall deposit).

Maximum penalty—100 penalty units or 1 year’s imprisonment.

(3)In this section—

shortfall, in a trust account, means an amount equal to the difference between the amount available in the trust account for payment and the amount to be paid from the account.

51A   Amounts in trust account unavailable for trustee’s debts

(1)An amount paid, or required to be paid, into a trust account under this chapter can not be—

(a)used to recover a debt owed to a creditor of the trustee; or

(b)attached or taken in execution under a court order or process for the benefit of a creditor of the trustee.

(2)Subsection (1)—

(a)applies in relation to the trustee, whether in the capacity of trustee or otherwise; and

(b)ceases to apply to an amount once lawfully withdrawn from the trust account; and

(c)does not apply to the extent it would interfere with the right of a beneficiary under this Act.

(3)In this section—

beneficiary, of a trust account, does not include a beneficiary who is also the trustee for the account.

51B   No power of trustee to invest

(1)The trustee for a project trust or retention trust must not invest the funds held in trust in any form of investment.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2)The trustee does not contravene subsection (1) only by earning interest on an amount held in a trust account that is paid by the financial institution at which the account is held.

51C   Trustee not entitled to payment for administration of trust or fees

(1)This section applies to costs incurred for—

(a)the administration of a project trust or retention trust; or

(b)fees payable in relation to a project trust or retention trust.

(2)The trustee for the project trust or retention trust is not entitled to recover the costs from a beneficiary or the funds held in trust for a beneficiary.

(3)In this section—

beneficiary, of a project trust or retention trust, does not include a beneficiary who is also the trustee for the trust.

51D   Interest earned on amounts held in trust account

(1)The trustee for a project trust or retention trust is entitled to receive all interest earned on amounts held in the trust account.

(2)The trustee may withdraw an amount equal to the interest earned on amounts held in the trust account once every 12 months or on the dissolution of the trust, unless the withdrawal would prevent the full payment of another amount that must be paid from the account.

51E   Employment or engagement of agents

(1)This section applies if the trustee for a project trust or retention trust employs, or otherwise engages, a person (an agent) to do any act relating to the trust on behalf of the trustee.

(2)The trustee is liable for all acts and defaults of its agent as if the acts and defaults were the trustee’s own acts and defaults.

(3)The costs of employing or engaging the agent are not recoverable from funds held in trust for the project trust or retention trust or from any beneficiary of the trust, other than the trustee.

51F   Power to delegate

(1)The trustee for a project trust or retention trust may delegate to a person resident in the State any powers of the trustee relating to the trust, other than this power to delegate.

Note—

See the Acts Interpretation Act 1954, section 27A about delegations of functions or powers.

(2)Subsection (3) applies if—

(a)a person (the delegate) is delegated a power of a trustee under subsection (1); and

(b)the delegate purports to—

(i)exercise a different power of the trustee; or

(ii)exercise the power while the delegation is not in force; or

(iii)exercise the power after the delegation has been revoked by the trustee or by operation of law; and

(c)another person relies on the purported exercise of the power by the delegate.

(3)Unless the other person had actual notice that the delegate was not authorised to exercise the power, the purported exercise of the power is taken to be as valid as if it were exercised under a delegation that was in force and authorised the purported exercise of the power.

(4)The costs relating to the delegation are not recoverable from funds held in trust for a project trust or retention trust or from any beneficiary for the trust, other than the trustee.

(5)The trustee must keep evidence of the delegation for a period of 7 years.

51G   Right of trustee to apply to Supreme Court for directions

(1)The trustee for a project trust or retention trust may apply to the Supreme Court for directions about—

(a)an amount held in trust; or

(b)the administration of the trust; or

(c)the exercise of a power by the trustee.

(2)A copy of the application must be given to all beneficiaries for the trust unless otherwise directed by the Supreme Court.

Division 3 Trust records

52   Trust records

The trustee for a project trust or retention trust must—

(a)keep records for the trust as prescribed by regulation; and

(b)retain the records for at least 7 years after the trust is dissolved.

Maximum penalty—300 penalty units or 1 year’s imprisonment.

52A   [Repealed]

Division 4 Oversight powers

Subdivision 1 Powers exercised by the commissioner

53   Register of project trusts and retention trusts

(1)The commissioner must maintain a register of the project trusts and retention trusts of which the commissioner has been notified.

(2)The commissioner may publish information about the project trusts and retention trusts in the way decided by the commissioner.

53A   Power to require particular information

(1)The commissioner may, by written notice, require any of the following entities to give stated information, or copies of documents, to the commissioner within the period stated in the notice (the compliance period)—

(a)the trustee for a project trust or retention trust;

(b)a beneficiary for a project trust or retention trust;

(c)a person that was a trustee or beneficiary mentioned in paragraph (a) or (b);

(d)an entity that has taken control of the financial affairs of a trustee or beneficiary mentioned in paragraph (a) or (b);

(e)a financial institution;

(f)an auditor;

(g)another person the commissioner believes has information about a project trust or retention trust.

(2)However, the requirement may relate to only the following information or documents—

(a)trust account records required to be kept under section 52;

(b)the contract to which the project trust or retention trust relates;

(c)information about amounts deposited into, or withdrawn from, a trust account;

(d)details of the financial institution at which a trust account is held;

(e)information that enables the commissioner to contact the beneficiaries of a project trust or retention trust;

(f)the details of an account at a financial institution into which a beneficiary of a project trust or retention trust is to be paid amounts from a trust account;

(g)other information the commissioner reasonably considers necessary to exercise the commissioner’s powers under this division or to investigate an entity’s compliance with this Act.

(3)The compliance period must not be less than 5 business days after the day the notice is given to the entity.

(4)The entity must comply with the requirement within the compliance period.

Maximum penalty—100 penalty units.

53B   Power to issue directions affecting trust accounts

(1)This section applies if—

(a)the contract for a project trust or retention trust (the trust contract) is terminated; or

(b)the contracted party for the trust contract becomes an insolvent under administration; or

(c)the commissioner reasonably suspects a trust account is not being used as required under this Act or is being used in a way that is inconsistent with this Act; or

(d)for a trustee that is a licensee under the Queensland Building and Construction Commission Act 1991—

(i)the trustee’s licence is suspended or cancelled; or

(ii)the trustee does not satisfy the minimum financial requirements under the Queensland Building and Construction Commission Act 1991.

(2)The commissioner may, by written notice, give the trustee—

(a)a direction that an amount not be withdrawn from a stated trust account without the commissioner’s written approval; or

(b)a direction that the trustee give the commissioner an account review report for 1 or more of the trust accounts for the trustee.

(3)The direction must include the information prescribed by regulation.

(4)If the commissioner gives a trustee a direction under subsection (2)—

(a)the commissioner must give a copy of the direction to the relevant financial institution; and

(b)the commissioner may end or withdraw the direction by giving written notice of the matter to each entity given the direction or a copy of the direction.

(5)The trustee must comply with the direction within the period stated in the notice unless the direction is withdrawn.

Maximum penalty—100 penalty units.

(6)In this section—

trustee means—

(a)if subsection (1)(a) or (b) applies—the trustee for the project trust or retention trust; or

(b)if subsection (1)(c) applies—the trustee for the trust account; or

(c)if subsection (1)(d) applies—the trustee mentioned in that subsection.

53C   Right of commissioner to apply to Supreme Court for directions

(1)The commissioner may apply to the Supreme Court for directions about an amount held in trust for a project trust or retention trust.

(2)A copy of the application must be served on all beneficiaries for the project trust or retention trust unless otherwise directed by the Supreme Court.

Subdivision 2 Special investigators

53D   Power to appoint special investigator

(1)The commissioner may, by written instrument, appoint an appropriately qualified person as a special investigator for 1 or more trust accounts.

(2)The function of a special investigator is to investigate a person’s compliance with the requirements of this Act relating to trust accounts.

(3)In carrying out the special investigator’s functions, the investigator may do any of the following—

(a)inspect trust records or another record relating to a trust account;

(b)prepare or construct incomplete trust records for a trust account;

(c)perform accounting tasks to establish the state of a trust account;

(d)report to the commissioner about the state of a trust account or a trustee’s compliance with this Act;

(e)require a financial institution or trustee to give copies of, or access to, documents relevant to trust accounts or money deposited into trust accounts;

(f)request a person to give copies of, or access to, documents relevant to any person’s compliance with this chapter;

(g)carry out another function, or exercise another power, prescribed by regulation.

(4)A special investigator holds office subject to any conditions stated in the investigator’s instrument of appointment, including any limitations on the exercise of a power.

(5)If a special investigator is appointed for a trust account, the commissioner must give the trustee for the account a notice stating the terms of the appointment and the investigator’s functions and powers.

(6)In exercising a power in relation to a person in the person’s presence, a special investigator must produce the investigator’s instrument of appointment for the person’s inspection before exercising the power.

(3)A reference in chapter 2 to a payment schedule includes a reference to a payment schedule made under the repealed Act, including as preserved under section 205.

(4)A reference in chapter 2 to a progress payment includes a reference to a progress payment the right to which arose under the repealed Act, including as preserved under section 205.

(5)A reference in chapter 2 to an adjudication under chapter 3, part 4 includes a reference to an adjudication under the repealed Act, part 3, division 2, including as preserved under section 205.

206   References to repealed Act

A reference in an Act or document to the repealed Act may, if the context permits, be taken to be a reference to this Act.

Part 3    Transitional provisions for the repealed Subcontractors’ Charges Act 1974

207   Definitions for part

In this part—

repealed Act means the repealed Subcontractors’ Charges Act 1974, as in force immediately before its repeal.

repealed, in relation to a provision, means that provision of the repealed Act.

subcontractors’ charge ...

subcontractor’s charge means a charge within the meaning of section 3 of the repealed Act.

208   Preservation of existing entitlement to subcontractors’ charges

(1)This section applies if, before the commencement, a subcontractor became entitled to a subcontractor’s charge under the repealed Act and the entitlement had not been extinguished or otherwise ended before the commencement.

(2)The entitlement to the subcontractor’s charge continues under this Act until it is extinguished or otherwise ends under this Act.

209   Unfinished matters for existing subcontractors’ charges to be dealt with under the repealed Act

(1)This section applies if, before the commencement, a subcontractor gave a person a notice of claim of charge for a subcontractor’s charge and, at the commencement, there are unfinished matters for the charge.

(2)Despite the repeal of the Subcontractors’ Charges Act 1974, the repealed Act continues to apply for the notice of claim and subcontractor’s charge, and any unfinished matters for the charge.

(2A)However, a reference to a subcontractor’s charge in section 117 includes a reference to a subcontractor’s charge mentioned in subsection (2).

(3)To remove any doubt, it is declared that if a subcontractor became entitled to a subcontractor’s charge before the commencement, but had not given a person a notice of claim of charge in relation to the charge, the person must secure the charge in accordance with this Act.

(4)In this section—

notice of claim of charge means a notice complying with repealed section 10(1)(a).

unfinished matter, for a subcontractor’s charge, includes a matter under the repealed Act that has yet to be started or completed, including, for example, the following—

(a)giving a person who holds a security a notice under repealed section 10(1)(aa);

(b)giving a person a notice of having made a claim under repealed section 10(1)(b);

(c)a person given a notice of claim of charge retaining money under repealed section 11;

(d)the giving of a contractor’s notice under repealed section 11(3).

(e)the use of securities for the subcontractor’s charge under repealed section 11A to 11D;

(f)the giving of information under repealed section 9A or 11E;

(g)the paying of money for the subcontractor’s charge;

(h)the enforcement of the subcontractor’s charge.

210   References to repealed Act

A reference in an Act or document to the repealed Act may, if the context permits, be taken to be a reference to this Act.

Part 4    Other transitional provision

211   [Expired]

Chapter 8A    Transitional provisions for Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020

211A   Definitions for chapter

In this chapter—

amendment Act means the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020.

former, for a provision of this Act, means the provision as in force immediately before amendment by the amendment Act.

211B   Continued application of former chapter 2 for particular building contracts

(1)This section applies in relation to a building contract—

(a)if the contract was entered into because of a tender process—for which the tender process was started before the replacement of chapter 2 by the amendment Act; or

(b)otherwise—entered into before the replacement of chapter 2 by the amendment Act.

(2)Chapter 2, as in force on the commencement, does not apply in relation to the building contract.

(3)Former chapter 2 continues to apply in relation to the building contract despite its repeal.

Note—

While former chapter 2 continues to apply to the building contract, the requirement to establish a project bank account under former section 13 might not apply to the building contract until an amendment of the contract. See former section 15.

(4)However, former chapter 2, part 5 applies in relation to the building contract, after the replacement of chapter 2, only if a principal was appointed as trustee for the relevant project bank account under former section 54 before the replacement of chapter 2.

211C   Transitioning to new scheme

(1)This section applies in relation to a building contract—

(a)if the contract was entered into because of a tender process—for which the tender process was started before the replacement of chapter 2 by the amendment Act; or

(b)otherwise—entered into before the replacement of chapter 2 by the amendment Act.

(2)If a project bank account is required for the building contract under former section 13 as applied under section 211B and the head contractor has not yet opened accounts at a financial institution for the project bank account, the head contractor may transition to the new scheme by opening a project trust account and, if necessary, a retention trust account for the contract as required under chapter 2.

Note—

The requirement to establish a project bank account under former section 13 might not apply to the building contract until an amendment of the contract. See section 211B and former section 15.

(3)If a project bank account is required for the building contract under former section 13 as applied under section 211B and the head contractor opened accounts at a financial institution for the project bank account before the commencement, the trustee for the project bank account may transition to the new scheme by complying with the following requirements within 6 months after the commencement—

(a)for the general trust account—

(i)the trustee must close the general trust account and transfer all funds held in the account to a project trust account at an approved financial institution; and

(ii)when opening the project trust account, the trustee must comply with section 18A; and

(iii)the transfer of the general trust account to the project trust account must comply with section 18B and, if necessary, section 18C; and

(iv)the transfer of the general trust account to the project trust account must be recorded in the trust records for the project trust account; and

(b)for the retention trust account—

(i)the trustee must close the retention trust account (the old retention trust account) and transfer all funds held in the account to a new retention trust account at an approved financial institution; and

(ii)when opening the new retention trust account, the trustee must comply with section 34A; and

(iii)the transfer of the old retention trust account to the new retention trust account must comply with section 34B and, if necessary, section 34C; and

(iv)the transfer of the old retention trust account to the new retention trust account must be recorded in the trust records for the project trust account; and

(c)for the disputed funds trust account—the trustee must close the disputed funds trust account.

(4)However, the trustee must not close the disputed funds trust account if—

(a)there are funds held in trust in the account; or

(b)there is a payment dispute relating to the building contract.

Note—

If a trustee can not close a disputed funds trust account, the trustee will not be able to transition to the new scheme.

(5)If the trustee transitions to the new scheme, the trustee must give notice of the transition, including the information prescribed by regulation, to each beneficiary affected by the transition.

Maximum penalty—200 penalty units.

(6)If a trustee transitions to the new scheme—

(a)section 211B ceases to apply in relation to the building contract from transition; and

(b)the trustee is not liable for any failure to comply with former chapter 2 to the extent the failure relates to the trustee complying with subsection (3) or (5).

(7)Despite former section 37(1) the trustee (as head contractor) may dissolve the project bank account to transition to the new scheme.

(8)Nothing in this section enables a trustee to deposit an amount into a retention trust account or project trust account that may not be deposited into the account under section 19A or 35A.

(9)In this section—

new scheme means project trusts and retention trusts under chapter 2 as replaced by the amendment Act.

211D   [Repealed]

211E   Transitional regulation-making power

(1)A regulation (a transitional regulation) may make provision about a matter for which—

(a)it is necessary to make provision to allow or facilitate the doing of anything to achieve the transition from the operation of this Act, as in force before its amendment by the amendment Act, to the operation of this Act, as in force after its amendment by the amendment Act; and

(b)this Act does not make provision or sufficient provision.

(2)A transitional regulation may have retrospective operation to a day not earlier than the day of the commencement.

(3)A transitional regulation must declare it is a transitional regulation.

(4)A transitional regulation expires 1 year after the day of the commencement.

Chapter 8B    Transitional provisions for Building and Other Legislation Amendment Act 2022

212   Definitions for chapter

In this chapter—

amendment Act means the Building and Other Legislation Amendment Act 2022.

former, in relation to a provision of the Act, means the provision as in force immediately before its amendment by the amendment Act.

213   Existing trust account reviews

(1)This section applies if—

(a)before the commencement, the trustee for a project trust or retention trust engaged an auditor to carry out a review of the trust account for the trust under former section 57; and

(b)immediately before the commencement—

(i)the review had not been completed; or

(ii)the account review report for the trust account required under former section 57A had not been given to the trustee.

(2)For the purposes of the review and report, former sections 57 and 57A continue to apply as if the amendment Act had not commenced.

214   Existing obligations to report serious breaches

(1)This section applies if—

(a)before the commencement, an auditor was required to notify the commissioner of a belief about a circumstance under former 57C; and

(b)immediately before the commencement, the auditor had not yet notified the commissioner.

(2)For the purposes of the notification, former section 57C continues to apply as if the amendment Act had not been enacted.

(3)However, if the review of the trust account in relation to which the notification requirement arose had not been completed immediately before the commencement—

(a)subsection (2) does not apply; and

(b)section 57C as in force after the commencement applies to the auditor in relation to the review.

Chapter 8C    Transitional provisions for Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2024

215   Definitions for chapter

In this chapter—

former, for a section of this Act, means the section as in force from time to time before the commencement.

new, for a section of this Act, means the section as in force from the commencement.

215A    Retention amounts

(1)New section 32 applies in relation to a retention amount withheld from payment whether before or after the commencement.

(2)Subsection (3) applies if—

(a)a retention amount was withheld from payment before the commencement; and

(b)immediately before the commencement, the retention amount was not required to be deposited in a retention trust account; and

(c)on the commencement, the retention amount is required to be deposited in a retention trust account.

(3)If this subsection applies—

(a)new section 34(2)(b) applies as if a retention trust account were required to be opened within 20 business days after the commencement; and

(b)new section 35(2)(b) and (c) apply as if the retention amount were required to be deposited in a retention trust account within 20 business days after the commencement.

215B    Changes affecting review of trust account

(1)This section applies if—

(a)before the commencement, the trustee for a project trust or retention trust engaged an auditor to carry out a review of the trust account for the trust under former section 57; and

(b)immediately before the commencement—

(i)the review had not been completed; or

(ii)the account review report for the trust account required under former section 57A had not been given to the trustee.

(2)For the purposes of the review and report, former sections 57 and 57A continue to apply as if the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2024 had not been enacted.

Chapter 8D    Validation provisions for Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Act 2024

215C    Definitions for chapter

In this chapter—

former, for a provision of this Act, means the provision as in force from time to time before the commencement.

registry summary, of an adjudication application, means a document given to the claimant by the registrar that includes at least the following details of the application—

(a)the name of the claimant;

(b)the name of the respondent;

(c)the date the application was made.

215D    Validation of non-compliance with former section 79(3)

(1)This section applies if, before the commencement—

(a)a claimant made an adjudication application; and

(b)the claimant did not give a copy of the adjudication application to the respondent as required under former section 79(3); and

(c)the claimant gave the respondent a registry summary of the adjudication application.

(2)The claimant is taken to have complied with former section 79(3).

215E    Validation of adjudication decision made before commencement—registry summary given to respondent

(1)This section applies if, before the commencement—

(a)an adjudicator purportedly made a decision under section 88 (the relevant decision) on an adjudication application; and

(b)the adjudicator did not have jurisdiction to make the relevant decision only because the claimant did not give a copy of the adjudication application to the respondent as required under former section 79(3); and

(c)the claimant gave a registry summary of the adjudication application to the respondent.

(2)Despite the absence of jurisdiction mentioned in subsection (1)(b)—

(a)the relevant decision is as valid as it would have been if the claimant had complied with former section 79(3) and the adjudicator had jurisdiction to make the decision; and

(b)anything done or purportedly done as a result of, or in reliance on, the relevant decision is taken to be, and always to have been, as valid and lawful as it would have been if, at the time the thing was done, the adjudicator had jurisdiction to make the relevant decision as mentioned in paragraph (a).

(3)This section applies even if a proceeding relating to the adjudication application has been commenced in a court.

215F    Declaration of court made before commencement that adjudication void is of no effect

(1)This section applies if, before the commencement, a court in a proceeding—

(a)declared that a decision made under section 88 on an adjudication application was void only because the adjudicator did not have jurisdiction to make the decision because the claimant did not give a copy of the adjudication application to the respondent as required under former section 79(3); and

(b)found that the claimant gave a registry summary of the adjudication application to the respondent.

(2)The declaration of the court is of no effect.

(3)Despite the declaration of the court—

(a)the decision made under section 88 is as valid as it would have been if the claimant had complied with former section 79(3) and the adjudicator had jurisdiction to make the decision; and

(b)anything done or purportedly done as a result of, or in reliance on, the decision made under section 88 is taken to be, and always to have been, as valid and lawful as it would have been if, at the time the thing was done, the adjudicator had jurisdiction to make the decision as mentioned in paragraph (a).

(4)If the adjudicator decided in the adjudication that the respondent was required to pay an adjudicated amount, for the purposes of section 90, the respondent is taken to have received a copy of the adjudicator’s decision on the day that is 30 business days after the commencement.

(5)If the court made any other order in the proceeding, including, for example, an order as to costs, a party to the proceeding may apply to the court to vary the order.

(6)The court may hear and decide an application under subsection (5) and make the orders it considers appropriate having regard to the operation of this chapter.

215G    Adjudication application must be re-decided if adjudicator decided before commencement that adjudicator did not have jurisdiction

(1)This section applies if, before the commencement—

(a)a claimant made an adjudication application; and

(b)the claimant did not give a copy of the adjudication application to the respondent as required under former section 79(3); and

(c)the claimant gave the respondent a registry summary of the adjudication application; and

(d)an adjudicator (the original adjudicator) was appointed under section 81; and

(e)the original adjudicator decided under section 84(2)(a)(i) that the original adjudicator did not have jurisdiction to adjudicate the application only because the claimant did not give a copy of the adjudication application to the respondent as required under former section 79(3).

(2)The decision of the original adjudicator is void and of no effect.

(3)On the commencement, the registrar is taken to refer the adjudication application to the original adjudicator for a decision.

(4)The original adjudicator must accept or reject the referral, unless the original adjudicator has a reasonable excuse, within 14 business days after the commencement by notifying the registrar of the acceptance or rejection.

(5)If the original adjudicator rejects the referral or does not accept it within the period required under subsection (4)—

(a)the registrar must refer the adjudication application to another adjudicator (the new adjudicator) within 4 business days after becoming aware of the rejection or failure; and

(b)no fee is payable for referring the adjudication application to the new adjudicator.

(6) The new adjudicator must accept or reject the referral, unless the new adjudicator has a reasonable excuse, within 4 business days after the referral under subsection (5)(a).

(7)If the original adjudicator or the new adjudicator accepts the referral—

(a)the adjudicator is taken to be appointed to decide the adjudication application; and

(b)the failure of the claimant to comply with former section 79(3) is taken not to deprive the adjudicator of jurisdiction to decide the adjudication application; and

(c)within 4 business days after the appointment, the adjudicator must give the claimant and the respondent a notice stating that—

(i)the decision of the original adjudicator mentioned in subsection (1)(e) is void under subsection (2); and

(ii)the respondent may give the adjudicator a response to the adjudication application within 15 business days after receiving the notice; and

(iii)the adjudicator will decide the adjudication application within 15 business days after the end of the period within which the respondent may give a response under subparagraph (ii); and

(d)the adjudicator must decide the adjudication application under section 88 within 15 business days after the end of the period within which the respondent may give a response under subparagraph (ii).

(8)For the making of a decision on the adjudication application by the original adjudicator or the new adjudicator under this section—

(a)the adjudicator may ask for further written submissions from either party and must give the other party an opportunity to comment on the submissions; and

(b)the time for deciding the adjudication application may be extended under section 86; and

(c)sections 89 to 97 apply in relation to the adjudication.

(9)For subsection (8)(b), section 86 applies as if a reference to section 85(1) were a reference to subsection (7)(d).

(10)To remove any doubt, it is declared that subsection (8) does not limit the application of this Act to the decision on the adjudication application by the original adjudicator or the new adjudicator under this section.

215H    Continuation of adjudication if adjudication not completed before commencement

(1)This section applies if, before the commencement—

(a)a claimant made an adjudication application; and

(b)the claimant did not give a copy of the adjudication application to the respondent as required under former section 79(3); and

(c)the claimant gave the respondent a registry summary of the adjudication application; and

(d)an adjudicator was appointed under section 81; and

(e)the adjudicator has not decided the adjudication application under section 88.

(2)The failure of the claimant to comply with former section 79(3) is taken not to deprive the adjudicator of jurisdiction to decide the adjudication application.

Note—

See also section 215D in relation to the failure to comply with former section 79(3).

(3)The adjudication application must be decided under part 4.

215I    No compensation payable by State

(1)This section applies if, before the commencement—

(a)the registrar gave a registry summary of an adjudication application to the claimant in the application; and

(b)the claimant gave the registry summary to the respondent in the application.

(2)No liability attaches to the commission, the registrar, a public service employee, or the State, and no compensation is payable by the commission, the registrar, a public service employee, or the State, in relation to—

(a)the giving of the registry summary by the registrar to the claimant; or

(b)anything done or purportedly done as a result of, or in reliance on, the registry summary being given by the registrar to the claimant.

Chapter 9    Amendment of this and other Acts

Part 1    Amendment of this Act

Division 3 Extended application of project trusts and retention trusts to particular contracts for $3 million or more

216   Amendment of s 14 (Particular contracts for project trust work)

Section 14(1)(c)(ii), ‘$10 million’—
omit, insert—

$3 million

Division 4 Extended application of project trusts and retention trusts to most contracts

217   Replacement of s 14 (Eligibility of contract for project trust when contract entered into)

Section 14—
omit, insert—

14   Eligibility of contract for project trust when contract entered into

A contract is eligible for a project trust if, when it is entered into—

(a)more than 50% of the contract price is for project trust work; and

(b)the contract price is $1 million or more.

218   Amendment of s 32 (When retention trust required)

Section 32(6), definition withholding contract—
omit, insert—

withholding contract means—

(a)a project trust contract; or

(b) a project trust subcontract; or

(c)any other subcontract for subcontracting work that contributes to the performance of a project trust contract.

219   [Repealed]

220   [Repealed]

221   [Repealed]

222   [Repealed]

223   [Repealed]

224   [Repealed]

225   [Repealed]

226   [Repealed]

227   [Repealed]

228   [Repealed]

229   [Repealed]

230   [Repealed]

231   [Repealed]

Schedule 2 Dictionary

section 5

accepted representations, for chapter 5, see section 172(2).

account review report, for chapter 2, part 4, see section 57A(1).

adjudicated amount, for chapter 3, see section 88(1).

adjudication application see section 79(1).

adjudication certificate see section 91(1).

adjudication response see section 82(1).

adjudicator means an individual registered under chapter 5, part 2, division 2 as an adjudicator.

administrator ...

amendment, of a contract, for chapter 2, see section 8.

appeal ...

approved financial institution, for chapter 2, see section 8.

approved form means a form approved by the chief executive or the commissioner under section 198.

approved way, for giving particular documents or making particular applications, means giving the documents, or making the applications, in a way approved by the commissioner under section 198A.

auditor, for chapter 2, part 4, division 1, see section 50.

building, for chapter 2, see section 8.

building contract, for chapter 2, part 3, see section 30.

building work ...

business day does not include—

(a)a Saturday or Sunday; or

(b)a public holiday, special holiday or bank holiday in the place in which any relevant act is to be or may be done; or

(c)any day occurring within any of the following periods—

(i)22 to 24 December;

(ii)27 to 31 December;

(iii)2 to 10 January.

carry out construction work, for chapter 3, see section 64.

chapter 2 requirement, for chapter 2, part 4, see section 50.

claimant, for chapter 3, see section 75(1).

code of conduct means a code of conduct for adjudicators made by the registrar under section 181.

commission means the Queensland Building and Construction Commission established under the Queensland Building and Construction Commission Act 1991, section 5.

commissioner means the commissioner appointed under the Queensland Building and Construction Commission Act 1991, section 20D.

complex payment claim, for chapter 3, see section 64.

construction contract, for chapter 3, see section 64.

construction work see section 65.

contract administration, for chapter 2, see section 8.

contracted building work ...

contracted party, for chapter 2, see section 8.

contracted work, for chapter 2, see section 8.

contracting party, for chapter 2, see section 8.

contractor, for chapter 4, see section 104.

contract price—

(a)for chapter 2—see section 10; or

(b)for chapter 4—see section 104.

controller ...

conviction, for chapter 5, part 2, see section 158.

corresponding law, for chapter 5, part 2, see section 158.

court, for chapter 4, see section 104.

defects liability period, for a contract, means—

(a)the period worked out under the contract as being the period that—

(i)starts on the day of practical completion for the work carried out under the contract; and

(ii)ends on the last day any omission or defect in the work, carried out under the contract, may be required or directed to be rectified under the contract; or

(b)if the contract does not provide for a period mentioned in paragraph (a)—the statutory defects liability period under the Queensland Building and Construction Commission Act 1991, section 67NA(2).

disputed funds account ...

disputed funds trust account ...

dispute resolution process ...

domestic building work see Queensland Building and Construction Commission Act 1991, schedule 1B, section 1.

due date, for a progress payment, for chapter 3, see section 64.

financial institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 (Cwlth).

fire protection work ...

first tier subcontract see section 6(5).

general trust account ...

head contract, for chapter 2, part 2, see section 10.

head contractor ...

head contractor—

(a)for chapter 3, part 4A, see section 97A; or

(b)for chapter 3, part 6A, see section 100A.

higher subcontract see section 6(7).

hospital and health service, for chapter 2, see section 8.

information notice, for chapter 5, see section 158.

insolvency official ...

land, for chapter 4, see section 104.

liquidator ...

maintenance work ...

mechanical services work see section 8.

minimum contract price, for chapter 2, part 3, see section 30.

notice of claim see section 122.

original decision, for chapter 5, see section 177(1).

payment claim see section 68(1).

payment dispute ...

payment instruction means an instruction to a financial institution for the payment of an amount from an account.

payment schedule see section 69.

payment withholding request see section 97B(2).

person, for chapter 4, see section 104.

practical completion, for work carried out under a contract, means—

(a)the day practical completion of the work is achieved, as worked out under the contract; or

(b)if the contract does not provide for the day practical completion of the work is achieved—the day the work is completed—

(i)in compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work; and

(ii)without any defects or omissions, other than minor defects or minor omissions that will not unreasonably affect the intended use of the work.

principal ...

progress payment see section 64.

project bank account ...

project trust see section 11.

project trust account see section 10.

project trust contract see section 8.

project trust subcontract see section 9A.

project trust work, for chapter 2, see section 8A.

proposed action, for chapter 5, see section 171(3)(a).

protected work ...

recognised financial institution means a bank, or other financial institution prescribed by regulation.

provisional liquidator ...

reference date, for chapter 3, see section 67.

registered company auditor ...

registrar see section 150(1).

registrar of titles means the registrar of titles under the Land Title Act 1994.

registry, for chapter 5, see section 149(1).

registry staff, for chapter 5, see section 149(2).

related entity see section 10A.

related goods and services, for chapter 3, see section 66.

relevant construction contract, for chapter 3, see section 64.

respondent, for chapter 3, see section 75(1).

retention account ...

retention amount means an amount that—

(a)is payable under a contract, but may, under that contract, be withheld from payment—

(i)during the progress of the work to be carried out under the contract; or

(ii)during the defects liability period for the contract; or

(iii)both during the progress of the work to be carried out under the contract and during the defects liability period; and

(b)is withheld from payment under a contract for the purpose of giving financial protection to the person making the payment in relation to the need to correct defects in the work to be carried out under the contract, or otherwise to secure, wholly or partly, the performance of the contract.

retention trust see section 31.

retention trust account see section 30.

review decision, for chapter 5, see section 178(2).

review notice, for chapter 5, see section 178(3).

second tier subcontract see section 6(6).

security, for chapter 4, see section 104.

show cause notice, for chapter 5, see section 171(2).

show cause period, for chapter 5, see section 171(3)(e).

special investigator means a person appointed as a special investigator under section 53D.

spent conviction ...

standard payment claim, for chapter 3, see section 64.

State authority, for chapter 2, see section 8.

structure, for chapter 4, see section 104.

subcontract see section 6(1).

subcontracted work see section 6(3)(c).

subcontractor see section 6(3)(b).

subcontractor beneficiary, for chapter 2, see section 10.

subcontractor’s charge, for chapter 4, see section 109(4).

supplier ...

trust account, for chapter 2, part 4, see section 50.

trustee in bankruptcy ...

trust records, for chapter 2, see section 8.

valuable instrument, for chapter 4, see section 104.

variation—

(a)of a building contract, for chapter 2, see section 8; and

(b)of a contract, for chapter 4, see section 104.

work, for a contract, for chapter 4, see section 105.