NSW Interest Rates

The NSW Security of Payment Act provides for interest at s11(2) of the Act as follows:

(2)  Interest is payable on the unpaid amount of a progress payment that has become due and payable at the rate:

(a)  prescribed under section 101 of the Civil Procedure Act 2005, or

(b)  specified under the construction contract,

      whichever is the greater.

NSW practitioners should note that commencing on 1 July 2010, the interest rate under s101 of the Civil Procedure Act 2005 (NSW) has changed.  This is to bring the rate of interest into line with other States.

Under s11(2)(a) of the Building and Construction Industry Security of Payment Act 1999 (NSW) the prescribed rate under s101 of the Civil Procedure Act 2005 in respect of periods on and after 1 July 2010 is now:

(a)  in respect of the period from 1 January to 30 June in any year-the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced, and

(b)  in respect of the period from 1 July to 31 December in any year-the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced.

The NSW Bar Association link for more information can be found here.

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