Victorian building company APM Group (Aust) Pty Ltd (APM) and its related entity APM Holdings (Aust) Pty Ltd has been issued a one-month exclusion sanction for its failure to comply with state security of payments legislation.
The exclusion sanction, imposed by the Minister for Jobs and Industrial Relations, Kelly O’Dwyer, means the company is excluded from expressing interest in, tendering for, or being awarded Commonwealth-funded building work for the one-month exclusion period, 1 May 2019 to 31 May 2019.
APM was found to have breached the Building Code 2013 by failing to pay a subcontractor over $40,000, and failing to resolve a payment dispute with a subcontractor in a reasonable, timely and cooperative way.
In the course of its dealings with the subcontractor, APM’s conduct included:
Threatening to ‘cash’ the subcontractor’s bank guarantees if it proceeded with an application for adjudication;
Applying pressure on the subcontractor not to exercise its statutory rights to suspend works; and
Withholding the subcontractor’s retention amounts (bank guarantees) from prior projects beyond the defect liability period to pressure the subcontractor to perform works on a current project.
APM failed to pay progress payments to the subcontractor even after an independent adjudicator had determined the claim should be paid.
APM’s conduct had a significant emotional and financial impact on the subcontractor and compromised their ability to pay their bills and put pressure on their relationship with suppliers.
The ABCC is urging all contractors to be aware of their security of payment obligations. There are a number of requirements placed on code covered entities that are intended to help ensure progress payments are made in a timely manner. Code covered entities must also report disputed or delayed progress payments to the ABCC.
The APM sanction is the first exclusion sanction relating to non-compliance with security of payments laws since the ABCC launched its successful Security of Payment campaign in July 2018.