Developer fined $150,000 in first prosecution related to Project Trust Accounts

A developer in the Australian property sector has been fined $150,000 plus costs for offences relating to Project Trust Accounts (PTAs), in the first prosecution of its type in Queensland.

The legal action taken by the Queensland Building and Construction Commission (QBCC) resulted from the defendant transferring funds owed under a head contract to an account other than the prescribed Project Trust Account.

QBCC Interim CEO and Commissioner, Skye Bowie, said this was the first prosecution related to PTA offences against the Building Industry Fairness (Security of Payment) Act 2017.

“This action is a strong outcome that reflects the QBCC’s regulatory focus on deterrence, education, and proportionate enforcement,” Ms Bowie said.

The offending occurred on 12 separate occasions between June 2022 and March 2023.

The Court imposed a $150,000 penalty but, in exercising its sentencing discretion, chose not to record a conviction.

During the hearing, Magistrate Ellis made mention that the defendant continued to breach the Act after being notified of the issue.

“This is exactly why the PTA framework was established; so that financial safeguards are in place to help secure payments for subcontractors and other creditors during and after a construction project,” Ms Bowie said.

"This outcome reflects the QBCC’s risk-based enforcement approach and its role in ensuring all persons subject to the Act’s requirements are held accountable for non-compliance where serious risks are identified.”

Ms Bowie said the prosecution by the QBCC reflected direct action on the key industry issue of security of payments, which is a priority area in the QBCC’s Compliance and Enforcement Strategy.

“The Strategy is clear that the QBCC actively monitors compliance with the broad suite of legislated payment protections to ensure prompt payment to sub-contractors,” she said.

Article supplied by the Queensland Building and Construction Commission.