Do I need legal advice for my construction dispute?

Recent legislative reforms across Australia have increased the protections for construction contractors and subcontractors against unfair contract terms and unfair time bars in a variety of construction contexts. What began in November 2023 with increased small business protections from unfair contract terms in the Australian Consumer Law (ACL) and ASIC Act (in relation to standard form contracts that also qualify as small business contracts), has in more recent times, expanded with broader unfair contract term protections in NSW and even more broad unfair time bar protections in WA Security of Payment laws and VIC Security of Payment laws (to take effect in 2026).

The primary role of dispute clauses in construction contracts are to provide the parties with certainty as to the agreed processes for resolving project disputes. Complex or convoluted dispute clauses potentially have the opposite effect. The clause itself may be the source of dispute because of uncertainty introduced by the drafting.We recently considered an unamended dispute clause in the Master Builders Queensland Commercial Building Contract. The dispute clause is relatively complex and adopts a series of progressive steps, which ultimately funnel into litigation provided preconditions are met (i.e. earlier processes have either failed, or one party has failed to participate).

When work is taken out of hands of a claimant contractor under a show cause regime in a construction contract, it typically has the effect of suspending the claimant’s rights to payment under the BIF Act (either on issue of the show cause notice itself or upon taking work out of its hands), which renders any subsequent BIF Act payment claim given by the claimant invalid. The show cause regime and the impact on claimant’s BIF Act payment rights was addressed in detail in the QLD Supreme Court decision in York Property Holdings Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd [2025] QSC 44.

Recent publications shared across the construction industry reveal an underlying optimism surrounding the dispute resolution regime in the new AS4000-2025 australian standard contract, perhaps as a potential driver of cultural change in the industry. The flexibility offered by the new regime was already, in the most part, adopted in various amended and derivative contracts (i.e. modified australian standard contracts) already in use, perhaps with the exception of the adoption of a Dispute Avoidance Board (DAB). The primary role of the DAB is said to be to avoid or prevent issues becoming disputes and to facilitate resolution of issues.

The QLD Supreme Court in Downer EDI Rail Pty Ltd v DT Infrastructure Pty Ltd recently clarified the proper interpretation of s97(1)(b) of the BIF Act in terms of a deemed withdrawal of an Adjudication Application by early payment by the respondent. The Court held, if the respondent pays the amount sought by the adjudication application (rather than the amount claimed in the payment claim), the application is deemed withdrawn.

Payment disputes in the construction industry are inevitable. How these disputes are managed is critical. Dispute clauses and payment clauses in construction contracts, to a limited extent, provide guidance to the contracting parties to manage these disputes, but there are many other practical steps for claimant contractors to consider beyond the terms of their construction contract. This guide assists contractors to better prepare payment claims and better manage payment disputes, including by taking steps before those disputes arise.