Recently, a large developer was fined $150,000 for failing to comply with Queensland’s Project Trust Account framework. Payments owed under a head contract were mistakenly deposited into the wrong account due to human error.
But the critical point? The developer continued breaching the rules even after being notified.
The Maroochydore Magistrates Court handed down the penalty, and Magistrate Ellis made it clear: compliance with Project Trust Accounts is not optional.
Why this case matters
This is the first prosecution of its kind under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act).
The action by the Queensland Building and Construction Commission (QBCC) sends a strong message:
- Deterrence – breaches will attract real consequences.
- Education – the framework protects subcontractors, not just adds red tape.
- Enforcement – regulators are willing to prosecute, not just warn.
The purpose of Project Trust Accounts is simple: to safeguard payments for subcontractors during and after a project.
How Project Trust Accounts work
Think of a Project Trust Account as a dedicated trust account for project funds.
- The head contractor must establish a Project Trust Account for eligible projects.
- All project funds received from the principal must be deposited into that account.
- Payments to subcontractors are made directly from the Project Trust Account.
This ensures money intended for subcontractors is ring-fenced and not diverted elsewhere.
When is a Project Trust Account required?
The rules depend on the size and type of project:
- From 1 March 2021 – $1M+ projects with Queensland Government departments (or certain authorities).
- From 1 July 2021 – $1M+ projects across most sectors.
- From 1 January 2022 –
- $1M+ for government and hospital projects;
- $10M+ for private projects.
In short: if your project crosses these thresholds, a Project Trust Account is mandatory.
Key obligations under the framework
- Determine whether your contract is “project trust work”.
- Set up and administer the Project Trust Account before payments flow.
- Expect QBCC audits to check compliance.
- Be aware: penalties for non-compliance are significant.
Why Project Trust Accounts benefit the industry
While often seen as compliance overhead, Project Trust Accounts deliver real value:
- Protection for subcontractors – reducing vulnerability to insolvency and payment delays.
- Payment security – ensuring funds are prioritised for those who did the work.
- Cultural change – promoting fairer, more transparent payment practices.
Takeaway for contractors and developers
This first prosecution is a wake-up call. The regulator is watching closely, and mistakes (whether intentional or not) can be costly.
The best strategy is to:
- Prepare early – establish your Project Trust Account before claims are due.
- Tighten administration – maintain strict payment processes.
- Seek advice quickly – legal and accounting specialists can help avoid penalties.