Finally, Some Ramifications for False Statutory Declarations

15th March, 2017

Statutory Declarations under Building and Construction Contracts

Before contractors can receive payment, they are usually obliged to give the owner a statutory declaration confirming workers and subcontractors have been paid. Similarly, subcontractors are required to provide the head contractor with a statutory declaration confirming payment of the subcontractor’s workers/sub-subcontractors.

ASIC Surveillance Program and Senate Committee Findings

A recent ASIC surveillance program on 8 large commercial construction projects across NSW, Victoria & Queensland identified that subcontractors were falsifying statutory declarations in order to get paid. ASIC issued a warning to these subcontractors and required a review of their internal compliance systems and processes.[1]   

The Senate Economics References Committee (SERC) has also reported that the “the prevalence of false statutory declarations is troubling”. SERC has heard evidence from witnesses about the routine issuing of false declarations. One witness explained that builders commonly hold a “folder full of blank declarations and they just sign them off like a piece of paper”.

Recent high profile contractor failures in Queensland have left hundreds of subcontractors unpaid which will further focus attention on individuals falsifying declarations.

Make a false declaration and expect to hear from ASIC

The making of false declarations is a criminal offence which has a maximum penalty of 4 years’ imprisonment.[2]  Whilst police prosecution is unlikely, ASIC has indicated its intention to pursue those who falsify declarations.

The SERC report recommends that ASIC continue programs to monitor the integrity of payments in the building industry. ASIC has warned that company officers who knowingly make false statements about payments to creditors are guilty of misconduct and face criminal or civil action by ASIC, the penalties for which may include fines or adverse publicity orders. ASIC is also encouraging anyone affected by false statutory declarations to report it.

What if you need to sign a statutory declaration but are in dispute about the amount owed to a subcontractor?

If a subcontractor claims a payment which you dispute, it is important that you do not sign a generic statutory declaration simply stating that you have paid all your subcontractors.

It is essential that you adjust the statutory declaration to reflect the dispute and keep records as to the basis of the dispute.

How can we help?

Given the above matters, we would recommend if you are required to provide a statutory declaration that you:  

1.   Read the declaration carefully and ask yourself: 

       (a)   Is it accurate?
       (b)   Do you have knowledge of the matters declared?
       (c)   Have you checked the documents you rely on to make the declaration?

2.   If necessary, make changes to the declaration to ensure complete accuracy.

3.   Sign each declaration before an authorised witness (JP or lawyer).

For further information or assistance, contact Frank Nardone on 3833 2102 or email frank@scogliolaw.com.au or Lisa Myers on 3833 2100 or lisa@scogliolaw.com.au.   


[1]    http://asic.gov.au/about-asic/media-centre/find-a-media-release/2016-releases/16-325mr-asic-warns-directors-of-construction-companies-using-false-declarations/.

[2]     Section 11, Statutory Declarations Act 1959 (Cth), section 194 of the Criminal Code 1899 (Qld) carries a maximum penalty of 3 years’ imprisonment for false declarations including those made under the Oaths Act 1867 (Qld).