Inquiry into NSW Construction Industry Insolvency

March, 2013

Because of the string of recent collapses of various building and construction companies, the NSW Government’s Minister for Finance Mr Greg Pearce, commissioned Mr Bruce Collins QC to conduct an urgent inquiry into the construction industry.

Mr Collins recently delivered his findings, making a number of recommendations. His report is currently on public exhibition until 21 February 2013, seeking submissions from the public and affected industry groups.

Some of the key recommendations in the report are:

1. The establishment of a NSW Building and Construction Commission with independent statutory powers to control and regulate the building industry.

2. The licencing of commercial builders. Licencing requirements to be based on financial capacity and be administered and enforced by the proposed Commission (described at 1).

3. The introduction of a system of statutory construction trusts so that funds paid by clients to head contractors are retained in trust for contractors down the contracting chain.

4. Extensive amendments to the Building and Construction Industry Security of Payment Act such as for example:

(i)  The introduction of statutory payment terms that would over-ride contractual terms (14 days for principals’ payments to builders and 28 from builders to sub-contractors);

(ii)  Extending the scope of the Act to deal with retention moneys; and

(iii)  Removing the section 13(2)(c) requirements to state that a claim is made under the Act for it to be a valid payment claim under the Act.

These recommendations represent considerable potential changes to the construction industry if they are enacted into law.

However, at this stage it should be noted that these are just recommendations and have not yet been considered by or commented on by Government.

Following the completion of the exhibition period, the New South Wales Government will review the submissions and then make decisions on any legislative changes to be brought into the Parliament.

The report is available for your review on the following link:


At this stage we recommend that clients monitor the situation and prepare for various contingencies.

We will advise our clients of any changes that are ultimately enacted in law.

Contact Mills Oakley

If you would like any further information, please contact:


Ziv Ben-Arie| Partner 
T: +61 2 8289 5854

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