Queensland’s Project Trust Account (PTA) framework commenced in March 2021 under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) and was a refined version of what was previously referred to as ‘project bank accounts’.
The regime has been designed to strengthen the security of payments to subcontractors and other creditors, by ensuring payments for their benefit flow directly to them, and to provide those parties with a beneficial interest in those funds in the event of insolvency.
The Queensland Building and Construction Commission (QBCC) is empowered to oversee and audit the trust accounts and ensure compliance with the project Trust Account obligations and those powers extend to the prosecution of breaches of the BIF Act, including as against developers.
PTAs are aimed at ensuring money paid by those higher up in the chain (financiers and developers) are secured for the benefit of subcontractors – effectively removing the middle link (the head contractor).
First Prosecution
The first prosecution related to PTA offences was heard in the Maroochydore Magistrates Court on 11 April 2025. The QBCC took legal action against one of Australia’s largest residential developers, for transferring funds owed under a head contract to an account other than the prescribed PTA.
Over around nine months, the developer paid a total of around $3.9 million into the wrong bank account of the construction company, PBS Building (Qld) Pty Ltd (PBS). It is worth noting that PBS were placed into voluntary administration in March 2023 and were at the time, said to be Queensland’s first test of the PTA regime.
Importantly, the developer was notified of the error twice but the issue was never resolved, meaning that when PBS entered liquidation approximately $500,000 was never transferred into the correct trust fund.
Whilst the developer argued that a third party was responsible for making the payments and they had requested to make the change, that did not absolve them of any liability on this occasion.
Implications
This prosecution highlights the significance of the PTA framework in protecting subcontractors and other creditors, and should also serve as a warning to developers and head contractors that non-compliance with the regime will be penalised.
All developers should be asking – does a PTA apply to this project (the answer for most will be ‘yes’) and are we making payments into the correct account. Failure to do so can be costly.
