Unearthing the divide: A look at the Court’s differing approaches to interpreting the mining exclusion in the BIF Act and QBCC Act

A recent Supreme Court of Queensland decision, Sun Engineering (Qld) Pty Ltd v Ravenswood Gold Pty Ltd [2024] QSC 68, has determined that work which is an essential and integral part of the mining process is ‘construction work in mining’ and therefore not ‘building work’ under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).

However, a more restrictive approach to interpreting the mining exclusion in the Building Industry Fairness (Security of Payment Act) 2017 (Qld) (BIF Act) remains  in determining whether work is ‘construction work’.

The Queensland Building and Construction Commission Regulations 2018 (Qld) (QBCC Regulations) excludes ‘construction work in mining’ from ‘building work’.¹

A somewhat similar exclusion exists in the BIF Act which declares that ‘construction work’ includes ‘building work’ within the meaning of the QBCC Act, but excludes the following:

1. the drilling for, or extraction of, oil or natural gas;
2. the extraction, whether by underground or surface working, of minerals, including tunnelling or boring, or constructing underground works, for that purpose.²

How have the courts interpreted these exclusions?

Sun Engineering (Qld) Pty Ltd (Sun), as contractor, and Ravenswood Gold Pty Ltd (Ravenswood), as Principal, entered a contract for the expansion of a gold mine near Townsville (Contract). The work under the Contract involved the installation of critical infrastructure that was for the purpose of separating gold from its natural state in rock.

One of the issues the Court was required to determine was whether the work carried out by Sun was ‘construction work in mining’ and therefore not ‘building work’ under the QBCC Act.  In determining that the mining exclusion applied, Justice Applegarth held:³

• a broad and practical interpretation of Item 28 (the exclusion) is required;
• the work constructed by Sun was an integral and essential part of the mining process. Absent the work, Ravenswood would simply have been extracting rock, not mining gold; and
• the physical distance between the places where ore is won from the ground, the place where impurities are removed and gold is extracted is relevant.

In contrast, the long-standing authority remains that a much narrower interpretation is required of the mining exclusion in the BIF Act. The Queensland Supreme Court and Court of Appeal have determined that:⁴

• the exclusion is expressed in limited terms, focusing purely on the process of extraction;
• nothing in the provision itself, or in the Act generally, requires a broad meaning to be applied to the exclusion; and
• while preparatory work may be part of the mining process, it will not necessarily be caught by the mining exclusion, and still be ‘construction work’.

Why is this important?

Whether you are the principal, contractor or subcontractor, it is important to determine whether the work being performed is ‘building work’ and/or ‘construction work’ as this can have significant implications, including:

1. The BIF Act establishes a procedure for parties to seek prompt payment for and resolve payment disputes in respect of ‘construction work’ carried out under construction contracts in Queensland. Contractors performing work caught by the mining exclusion will not have the benefit of the security of payment regime.
2. Broadly, Queensland has the most onerous licensing requirements in Australia. Understanding whether the work is ‘building work’ requiring a licence and the obligations that come with holding a licence is important to ensure compliance, failing which the Contractor may lose its right to be paid the contract sum.
3. If ‘building work’ is being performed under a building contract, the contract will be subject to mandatory terms imposed by Part 4A of the QBCC Act, including in respect of limitations on when security can be called upon.

How can we help?

We have considerable experience in relation to the BIF Act and the QBCC Act, including acting for principals and contractors in payment disputes and advising on QBCC licensing requirements.

This article was written by Natalie Botha, Special Counsel and Colin Harris, Partner.

¹ Schedule 1, Item 28.

² Section 65(2) and 65(3).

³ At [144] – [146].

⁴ See Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd & Anor [2012] QCA 276; Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2011] QSC 345HM;  Hire Pty Ltd v National Plant and Equipment Pty Ltd & Anor [2012] QSC 4, considering the exclusion as it existed in the same terms under section 10(3) of the Building and Construction Industry Payments Act 200 (Qld).