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.
Down under piling
This article was written by Leighton Moon, Partner, Chris Kipouridis, Associate, and Nick Jarrett, Solicitor.
The Supreme Court of Victoria’s decision in Endeavour Constructions Pty Ltd v Down Under Piling Australia Pty Ltd [2023] VSC 424 (the Case) outlines the criteria required to satisfy Section 18(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (the SOP Act).
If a respondent fails to provide a payment schedule, then Section 18(2) requires the claimant to give notice of its intention to make an adjudication application, and give the respondent a “second chance” to serve a payment schedule within 2 business days of that notice.
The Case highlights that a notice under section 18(2) of the SOP Act (Section 18(2) Notice) does not require clear identification when served. Rather, it just needs to be received by the respondent and outline the claimant’s intention to proceed to an adjudication.
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What is a construction contract? An essential requirement for protection under the security of payment regime
This article was written by Colin Harris, Partner and Kelly Brook, Associate.
The recent decision by the Supreme Court of Queensland in GCB Constructions Pty Ltd v SEQ Formwork Pty Ltd [2023] QSC 71 demonstrates the importance of ensuring there is a construction contract in place which meets the definition under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) to safeguard the protection provided to contractors by the security of payment regime.
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Can a Superintendent issue a Conditional Certificate of Practical Completion? – H&M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No. 4) [2023] NSWSC 925
Written by Alan Chiang, Partner, Fin Neaves, Associate, and Alice Heath, Law Graduate.
The purpose of a Certificate of Practical Completion is to certify the date on which all building work has been completed in accordance with the construction contract.
The recent decision of H&M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No. 4) [2023] NSWSC 925 examines the consequences of when a Superintendent issues a Certificate of Practical Completion when not all contractual requirements have been satisfied.
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Luxury Pty Ltd v Menzies Civil Australia Pty Ltd [2023] WASC 340
This article was written by Leighton Moon, Partner, and Brian Rom, Special Counsel.
Insolvency in the construction industry is a significant concern. The case of CM Luxury Pty Ltd v Menzies Civil Australia Pty Ltd [2023] WASC 340 (7 September 2023) is a reminder of the precision required when preparing a statutory demand under Section 459E of the Corporations Act 2001 (Cth) (Act).
A company that is served with a statutory demand must, within 21 days of receipt, apply to court to set it aside or it will otherwise be presumed to be insolvent and can be wound up.
In this matter, the court set aside a statutory demand which described the general factual background to the debt but misdescribed its legal basis. While this may appear pedantic, it was held to be justified in circumstances where the error had prejudiced the company’s ability to make the necessary application to set aside the demand within the prescribed 21 days.
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Who am I contracting with? Privity of contract and the Security of Payment regime – Ratcliffe v Horizon Glass & Aluminium Pty Ltd [2023] NSWSC 196
This article was written by Alan Chiang, Partner, Fin Neaves, Associate, and Ariadne Paras, Solicitor.
The recent decision of Ratcliffe v Horizon Glass & Aluminium Pty Ltd [2023] NSWSC 196 highlights the strict approach Courts take when ascertaining parties to contracts, regardless of which party performed the contract, save for payment. This case reminds contractors who enter construction contracts, that if they do not contract with the correct party, there is a significant risk they may lose the right to pursue a payment claim, making clear, that the basic contractual element of privity underpins a party’s rights to make claims under the security of payments regime, despite any work that has been completed.
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Sun engineering shines light on adjudication decisions
This article was written by Colin Harris, Partner and Ellie Clark, Law Clerk.
Sun Engineering (Qld) Pty Ltd v Registrar Appointed under section 150 of the Building Industry Fairness (Security of Payment) Act 2017 & Anor [2023] QSC 168.
An adjudication decision under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) which is void and unenforceable is distinct from the ‘no decision’ scenario provided by section 94 of the BIF Act, which entitles a claimant to request the registrar to refer an adjudication application to another adjudicator.
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SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2019] QCA 2019
This article was written by Theo Kalyvas, Partner and Ariadne Paras, Solicitor.
What happens when a principal fails to nominate a superintendent as required by the contract?
After consideration of an amended AS4902-2000, the QCA found that the Principal’s failure to properly nominate a Superintendent in accordance with the relevant construction contract is a breach of contract by the Principal; that such a breach may give rise to damages and termination by the Contractor; and that (subject to the express terms of the contract), the role of the Superintendent will not default to the Principal if a nomination is not properly made.
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Veesaunt Property Syndicate 1 Pty Ltd v Alliance Building and Construction Pty Ltd (No 2) [2023] QSC 129
This article was written by Matthew Bliem, Partner, Kevin Lock, Special Counsel, and Oliver Keats, Solicitor.
This case confirms the prevention principle, with the Court rejecting a contractor’s attempt to take advantage of its own default in the context of conditions precedent in a construction contract.
In this case, the Court applied the prevention principle to prevent a contractor from asserting a construction contract was terminated where it was obliged, yet failed, to provide security and evidence of insurance as relevant conditions precedent. The contract provided that the parties would no longer be bound and the contract would be taken to have been terminated if the conditions precedent were not satisfied within 3 months.
Given the prevalence of conditions precedent in construction contracts and the likelihood of this situation occurring again, this case is instructive as to the approach the Courts may take in similar situations.
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