Western Australian Current Acts

BUILDING AND CONSTRUCTION INDUSTRY (SECURITY OF PAYMENT) ACT 2021 - SECT 59

59 .         Right to substitute performance security

        (1)         A party to a construction contract is entitled to the release of retention money under the contract by substituting a performance bond for the retention money in accordance with this section.

        (2)         A claimant may seek the substitution of performance security in a payment claim for a progress payment.

        (3)         A claimant —

            (a)         may seek the release of a single amount of retention money under a construction contract by substituting several separate performance bonds; and

            (b)         may seek a second or subsequent release of retention money under the construction contract by substituting further performance bonds.

        (4)         A payment claim in which a claimant seeks the substitution of performance security must, in addition to the requirements of Division 1 —

            (a)         identify the construction contract for which the substitution is proposed; and

            (b)         indicate the amount of retention money to be released; and

            (c)         state that it is made under this Act; and

            (d)         be accompanied by a draft of the compliant performance bond, or of each compliant performance bond, that the claimant proposes to provide in substitution for the release of the retention money (being a draft in final form except for its execution by the authorised issuing institution); and

            (e)         include any other information required by the regulations.

        (5)         The determination of an adjudicator or review adjudicator may require the substitution of performance security that is proposed in a payment claim.

        (6)         An adjudication application or adjudication review application that seeks the substitution of performance security proposed in a payment claim must be accompanied by a compliant performance bond executed by the authorised issuing institution that is in the same form, or substantially in the same form, as the draft performance bond that accompanied the payment claim.

        (7)         The respondent may, in an adjudication response or adjudication review response, dispute —

            (a)         the authenticity of an executed performance bond (or the lack of reference or other information that would enable its authenticity to be confirmed); or

            (b)         that an executed performance bond is a compliant performance bond or is in the same form, or substantially in the same form, as the draft that accompanied the payment claim.

        (8)         Subsection (7) applies whether or not the respondent disputed the matter in the payment schedule.

        (9)         An adjudicator or review adjudicator must, in any determination for the substitution of performance security, satisfy themselves that the executed performance bond is an authentic and compliant performance bond.