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:

  • section 14(4), meaning that the Crown will not automatically become liable to pay any amounts claimed in a payment claim should it fail to provide a payment schedule within the time required by the relevant construction contract or within 15 business days of the payment schedule (whichever is earlier);
  • section 15, meaning that, even in the absence of a payment schedule, prospective claimants will not be able to commence proceedings in a Court to recover the unpaid portion of any claimed amounts in a payment claim, proceed to adjudication under the Act nor serve a notice of intention to suspend works;
  • section 16(2)(a)(ii) and (4), meaning that prospective claimants cannot proceed to adjudication nor commence proceedings, even if the Crown fails to pay a scheduled amount;
  • section 30, meaning that adjudicators are not entitled to be paid for adjudicating an adjudication application (which cannot be made in any case);
  • section 31, meaning that adjudicators and authorising nominating authorities are no longer not personally liable for anything done or omitted to be done in good faith in exercising their functions under the Act.

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 | [email protected]

Daniel Oh | Senior Associate | +61 2 9020 5674 | [email protected]

James Kim | Lawyer | +61 2 9020 5675 | [email protected]

‍