The Critical Path – Melbourne C&I Newsletter March 2024 

15 March 2024

Welcome to The Critical Path, HWL Ebsworth Lawyers’ Melbourne Construction and Infrastructure newsletter featuring the latest developments in construction law, to help you stay on the critical path!

As always, we hope you enjoy this issue of The Critical Path and that it finds some use in your endeavours.

A misleading and deceptive conduct during the course of an adjudication process:
held not to be conduct ‘in trade or commerce’ for the purposes of s18 ACL claims

This article was written by Paul Graham, Partner, Brian Rom, Special Counsel and Ariadne Paras, Solicitor. 

Misleading and deceptive conduct under s18 of the Australian Consumer Law (ACL) is often raised as a defence to summary judgment proceedings where the respondent has failed to serve a payment schedule or to pay a scheduled amount, for example proceedings under ss16(a)(a)(i) and 17(2)(a)(i) of the Building and Construction Industry Security of Payment Act 2002 (Vic) or analogous provisions in other jurisdictions.

On 15 December 2023, the NSW Court of Appeal in the case of Bhatt v YTO Construction Pty Ltd
held that misleading and deceptive conduct occurring during an adjudication process was not ‘in trade or commerce’ for the purposes of s18 of the ACL. The outcome may appear surprising given the conduct in question involved fraud.

Click here to read more.

Thurin v Krongold Constructions (Aust) Pty Ltd [2024] VSC 42: extension of limitation periods under s77(4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)

This article was written by Theo Kalyvas, Partner, Fin Neaves, Senior Associate, and Joseph Li, Law Graduate.

This case dealt with the apparent inconsistency between s77(4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), which confers power on courts to extend limitation periods for proceedings struck out by VCAT where federal jurisdiction is invoked, and ss134 and 134A of the Building Act 1993 (Vic), which sets a 10-year limitation period for bringing a building action ‘despite anything to the contrary … in any other Act or law’.

In this long running case, the Court:

  • allowed the joinder application of the owner and builder (to add two third parties, being the supplier and architect firm as defendants to the proceedings); and
  • extended the limitation period for the owner to claim against the architect firm.

Parties in VCAT building disputes now have certainty that they will not be out of time in bringing later court proceedings if the VCAT dispute is struck out based on federal issues being invoked.

Click here to read more.

Payment schedules and SOPA: minimum content explained

This article was written by Leighton Moon, Partner, Patricia Oman, Senior Associate, Rob Gilchrist, Solicitor,
and Alex Hughan, Law Graduate.

A payment schedule issued under security of payment legislation may be found to be invalid if it does not adequately describe and address each component in the relevant payment claim. Specifically, respondents cannot simply seek to defer any assessment of variations to a later date.

In Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd,1 the Supreme Court of NSW held that the Principal’s failure to address a distinct component of the Payment Claim made the entire payment schedule invalid. Further, it was stated that whilst the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act NSW) is “undemanding”, there is a minimum level detail required to make a payment schedule valid and that “vague, generalised objections to payment will not suffice“.

In this case, the payment schedule was issued via short email that might otherwise be valid were it not for a failure to adequately address a particular component of the Payment Claim (being, claimed variations).
As such, the appeal was rejected.

This case concerned the SOP Act NSW specifically. In considering this case we have compared the requirements in equivalent legislation in other jurisdictions.

Click here to read more.

New legislation bolsters regulation of domestic building contracts in Victoria

This article was written by Matthew Bliem, Partner and Angelo Lin, Law Graduate.

Home builders should take note: following the recent collapse of several builders, new legislative changes in Victoria have been introduced to strengthen consumer protections in the construction industry by introducing new penalties for builders. Many homeowners were vulnerable to losing their deposits due to builders’ failure to obtain domestic building insurance (DBI).

In response, the Building Legislation Amendment (Domestic Building Insurance New Offences) Act 2024 (Vic)
(the DBI Offences Act) came into operation on 28 February 2024 and addresses gaps identified in the regulatory framework. Specifically, the DBI Offences Act introduces penalties for a builder’s failure to obtain DBI.
The DBI Offences Act complements the recommendations in the ‘Expert Panel’s Comprehensive Review of Victoria’s Building System – Stage Two Report to Government’; a report which proposed to develop new insurance products that are commercially viable for insurers while meeting the needs of consumers, to enhance Victoria’s building regulatory system.

Click here to read more.

Refresher: ministerial directions for public construction procurement

This article was written by Toby Mittelman, Partner, Kate Fitzgerald, Special Counsel, and Taulant Javori, Associate.

The Ministerial Directions (Directions) for Public Construction Procurement are mandatory principles that Victorian Agencies must follow when undertaking Public Construction Procurement on or after 1 July 2018.

The Directions are provided for under the Project Development and Construction Management Act 1994 (Vic) (PDCM Act). The PDCM is designed to facilitate government development projects in Victoria and provides the framework for the Minister to issue Directions.

The Directions are supplemented by mandatory Instructions for Public Construction Procurement and supported by the non-mandatory Guidance for Public Construction Procurement, which sets out good practice and assists in interpreting the mandatory requirements.

Click here to read more.

Infrastructure Victoria’s key principles and recommendations to reduce carbon emissions

This article was written by Marko Misko, Partner, Julie Charles, Special Counsel, and Taulant Javori, Associate.

The Victorian Government has committed to achieving net zero greenhouse gas emissions by 2050, as legislated in the Climate Change Act 2017 and outlined in Victoria’s Climate Change Strategy. The State’s climate change strategy includes interim targets to reduce emissions by 28-33% below 2005 levels by 2025 and by 45-50% below 2005 levels by 2030.

Click here to read more.

Can a letter of demand constitute a payment claim?

This article was written by Alan Chiang, Partner, Chris Kipouridis, Associate, Oli Keats, Solicitor and Brooke Jamieson, Law Graduate.

Total Construction Pty Ltd v Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) [2023] NSWCA 306 concerned a case as to whether letters of demand, could constitute a payment claim pursuant to s13 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act).

The New South Wales Court of Appeal held that a letter of demand could act as a payment claim if it met the requirements of the Act. This case is an important reminder to be meticulous in preparing payment claims and ensure that all requisite elements are satisfied.

Click here to read more.

Payment claims: substance and character

This article was written by Paul Graham, Partner, Tara Nelson, Senior Associate and Nick Jarrett, Solicitor. 

The judgment of Stevenson J in the New South Wales Supreme Court highlights the substance and form requirements of a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW).

The case provides clarity regarding the character of claims seeking repayment of security and the jurisdiction of an adjudicator.

Click here to read more.

1[2023] NSWCA 305

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