Use of the Security of Payment Act in Resolving Disputes in Victoria, Australia

Abstract

Researchers in many countries advocated that the security of payment act (SPA) can help expedite resolution of payment-related claims compared with traditional methods such as litigation and arbitration. While the use of SPA was articulated, few researchers have attempted to review how SPA is being implemented by the construction practitioners in real situations. This research study explored the effect of the SPA on resolving construction disputes through both literature and court cases reviews. Court cases in the State of Victoria, Australia, that are related to the use of SPA were identified from the Australasian legal information institute (Austlii) database system. Findings from relevant referred journal articles, industry, and government reports are compared with those recorded in the identified court cases. Four key features that characterize the use of SPA in the State of Victoria are identified: (1) Strengthening the position for adjudication as a fast tracking process, (2) clarifying the role of adjudicator, (3) avoiding excessive legal formality, and (4) addressing the geographical difference. Findings of this study reveal that there are inconsistencies within the assumptions made by the scholars regarding the effect of SPA on industry’s practice of dispute resolution. This triggers further studies regarding the accuracy and efficiency when applying SPA to resolve payment disputes.