Australia: The Fiocco Review: A step closer to national security of payment laws

The WA Government has released its Security of Payment Reform in WA Building and Construction Industry final report.

In a time of financial distress for many participants in the construction industry, the report proposes various reforms to promote prompt payment to maintain a contractor's cash flow. In doing so, the report provides an in-depth Western Australian view on this year's national Review of Security of Payment Laws (Murray Review).1


The Security of Payment Reform in WA Building and Construction Industry final report (Fiocco Review) was produced for the WA State Government by an independent advisory group chaired by prominent barrister John Fiocco2 and was undertaken in response to continuing payment delay and default in the construction industry. The independent advisory group was asked to consider, among other things, the extent to which WA should adopt the Murray Review's recommendations.


The Fiocco Review recommends adopting a range of the Murray Review's recommendations, but differs from the Murray Review in some significant respects. It also proposes key new reforms not considered by the Murray Review.

Regarding statutory adjudication, the Fiocco Review proposes movement away from the model used in Western Australia and the Northern Territory (West Coast Model) towards the significantly different model recommended by the Murray Review (Murray Model) (which itself was based on the various forms of the 'East Coast Model' adopted in the Eastern States).

The Fiocco Review also makes other significant recommendations aimed at bolstering payment security for contractors and subcontractors, including statutory trust schemes and penalties for builders with poor payment practices.


The Fiocco Review, in largely adopting the Murray Model, admitted it was more complex than the West Coast Model. However, it reasoned that 'some additional complexity is a price worth paying to achieve' the aim of 'providing parties with statutory rights to claim and receive payment promptly and an efficacious means of enforcing their rights, rather than simply a rapid dispute resolution process.'3

Some of the key aspects of the recommended model include:

  • A new security of payment Act would be introduced, replacing the WA Act.
  • It would provide a statutory right to progress payments that supplements (and overrides) any inconsistent contractual regime, as distinct from simply a rapid dispute resolution process.
  • Claimants would have to comply with statutory requirements regarding the information in payment claims and how and when they are made in order to apply for adjudication. The Fiocco Review, unlike the Murray Review, recommends s 13 of the NSW SOP Act as the preferred model.
  • Respondents must then provide a payment schedule containing certain prescribed information, within the earlier of the time provided by the construction contract or 15 business days after the payment claim is served (compared to the 10 business days recommended by the Murray Review).
  • A respondent would not be able to include in its adjudication response any reasons for withholding payment which had not already been included in a payment schedule provided to the claimant.
  • The claimant may apply for adjudication or recover the unpaid portion of the claimed amount as a debt from the courts if the Respondent fails to provide a payment schedule within the prescribed timeframe or fails to pay the amount claimed by the due date of payment.
  • A narrower mining exclusion (in the form of s 5(2) of the NSW Act) would be adopted. Unlike the Murray Review, the Fiocco Review also calls for discussion of further limiting the exclusion or removing it entirely.
  • The WA Act's limited right of review by the State Administrative Tribunal when an application is dismissed by an adjudicator would be retained. The review process recommended in the Murray Review, which also has triggers based on the adjudicated amount, would not be adopted.


The substantial proposed reforms to the adjudication regime should not overshadow the significance of the other recommendations made in the Fiocco Review.

Recommendations which are similar to, or adopt, Murray Review recommendations include:

  • Statutory trust schemes be adopted, in preference to a right of adjudication applicants to require principals to withhold money owed to head contractors/respondents. For projects over $1 million, payments received by a party for work conducted by another party would be held on trust for the party who performed the work. Further, any party holding retention moneys would hold that money on trust, irrespective of the contractual value.
  • Time bars would be void where compliance with them would 'not be reasonably possible' or 'be unreasonably onerous', or where 'non-compliance would [not] result in prejudice to the other party'.4 The last test is recommended instead of the Murray Review's 'serving no commercial purpose' test.5
  • The date for payment of progress claims by a principal to a head contractor would be 20 business days, and 25 business days from a head contractor to a subcontractor.

The key new recommendations, not addressed in the Murray Report, include:

  • Late payments of adjudication determinations or court judgments would be a disciplinary matter actionable by the Building Services Board.
  • There would be a demerit point system whereby building service providers may be fined or have their registration suspended or cancelled for poor payment practices.
  • All security held under a contract would be required to be returned within 12 months after practical completion, and notice of 10 business days' would be required prior to recourse to security.
  • All building services contracts valued at $20,000 would be required to be in writing and contain certain information, with limited exceptions.


If adopted, the security of payment model recommended by the Fiocco Review would represent a significant step towards greater federal unity of security of payment laws. However, by retaining aspects of the WA Act and picking and choosing from the Eastern States, it would result in yet another unique form of the East Coast Model.

Whether a national regime will be implemented remains to be seen, but as the Fiocco Review points out, 'while national harmonisation is an admirable objective, it may be more realistic to aim for greater national consistency, at least in the short term.'6

Any move in WA towards the key components of the Murray Model for payment claim adjudication would require WA industry to invest significant time in adjusting to the working of the new, more prescriptive, regime. Parties would have to have a better understanding of their statutory rights and obligations than under the existing system. With these factors in mind, the Fiocco Review recommends a lead-in period of at least 12 months if the regime is adopted.

The recommendations for reforming the contract administration process could encourage timely responses to claims, which could in turn reduce cash flow uncertainty for those down the contractual chain. A consequence of the more rigorous requirements may be increased administration costs and less flexibility with cash flows. Further, the introduction of statutory deemed trusts could increase insolvency risk, particularly for head contractors.


1The Murray Review is located at

2 The Fiocco Review is located at

3 Fiocco Review at 135.

4 Fiocco Review at 7 (Recommendation 21); Murray Review at xxx (Recommendation 84).

5 Fiocco Review at 7 (Recommendation 21), 212, 214; Murray Review at xxx (Recommendation 84).

6 Fiocco Review at 2, 156.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions