On 1 May 2025, a number of important changes were made to the South Australian security of payment regime through an amendment to the Building and Construction Industry Security of Payment Regulations 2011 (SA) (the Regulations).
Regulation 7 of the Regulations now provides that a party to a "prescribed contract" is exempt from the operation of certain sections of the Building and Construction Industry Security of Payment Act 2009 (SA) (the Act).1
A prescribed contract
Regulation 7 introduces the definition of a "prescribed contract", which refers to a contract entered into between the Crown and another person under which the total amount payable to the other person exceeds $4 million (excluding GST) over the "term of the contract".2
The "term of the contract" does not include any extension of the contract.
The exemptions
The Regulations provide that the following sections of the Act do not apply to prescribed contracts:
Key takeaways
In South Australia, the only avenue for Contractors who are a party to a prescribed contract is to enforce their rights (including making claims) through the dispute resolution mechanisms under the relevant construction contract or the courts.
Importantly, the Regulations do not prevent Subcontractors from accessing the mechanisms of the Act against Contractors.
For more information or assistance, contact our Construction and Infrastructure team.
Notes
1 See the Building and Construction Industry Security of Payment (Exemption) Amendment Regulations 2025 (SA).
2 Note, Regulation 7applies retrospectively to prescribed contracts entered into before 1 May 2025.
Authors
Phillip Coady | Partner | +61 2 9020 5670 | pcoady@tglaw.com.au
Daniel Oh | Senior Associate | +61 2 9020 5674 | doh@tglaw.com.au
James Kim | Lawyer | +61 2 9020 5675 | jqkim@tglaw.com.au