Legal News

The right to fix defective work

No. 1509 – 27 October 2015

In Update 1509 we examine the balancing act between the builder’s right to rectify its defective work and the owner’s right to insist on the rectification work being done in a particular way. In general, when defective work is found on a completed build, the builder has a right to go back and rectify.

However, this is a right that can be lost by the builder’s conduct, such as a persistent refusal to admit the scale of the problem. Equally, owners can jeopardise their right to claim compensation for work done by others if they unreasonably insist on unnecessary work.

The NSW Supreme Court has recently set out the guiding principles that inform the decisions to be made by parties in this situation.

Set-off won’t stop enforcement

12 October 2015

Although the NT security of payment Act is largely modelled on WA’s Construction Contracts Act and operates identically in many respects, there are a number of notable differences.  One of them is that under the NT Act there is a straight forward right to enforce an adjudication determination as a judgment debt, whereas under the […]

Service of SOP documents by email finally given firm blessing

30 September 2015

It goes without saying that communication by email is fundamental and ubiquitous to commercial life today.  The value of email when dealing with the short timeframes prescribed by security of payment legislation is obvious.  However, users of the adjudication system are often advised out of a prudent abundance of caution to serve documents such as […]

Existence of reference date not jurisdictional in NSW

28 September 2015

In Lewence Construction Pty Ltd v Southern Han Breakfast Point Pty Ltd [2015] NSWCA 288, handed down last Friday 25 September 2015, the Supreme Court of NSW Court of Appeal unanimously held that the question of whether a ‘reference date’ has occurred – which gives rise to an entitlement to a progress payment under security […]

Preferential Payment Claims

31 August 2015

Introduction When a head contractor goes into liquidation, the subcontractors (“creditors”) are usually owed substantial debts.  In most cases, debts owed at liquidation are not fully paid.  Creditors might receive a small dividend from the liquidator years later.  Adding insult to injury, months or even years after the liquidation date, creditors might receive a letter […]

“One shot” to adjudicate

No. 1507 – 27 August 2015

Adjudication of payment disputes has become commonplace under the Security of Payment legislation now in force across Australia. Sometimes contractors make an error when applying for adjudication and realise that the adjudication will end badly if they continue. In those circumstances, what does the contractor do? Should the contractor withdraw the application or restart the whole process?

A recent decision of the Court of Appeal of the Northern Territory makes clear the position under the Act as it applies to the Territory.

Statutory declarations and payment claims

No. 1506 – 27 August 2015

Introduction The commercial construction industry is familiar with the contractual requirement to provide a statutory declaration with progress claims.  Most construction contracts require contractors to certify they have paid all the money due to their subcontractors and suppliers in relation to the work they are claiming for before they are entitled to the progress claim. […]

Buying from an owner builder

No. 1505 – 24 July 2015

This Update examines the liability of owner builders when they sell their residence following substantial renovations. This decision from the NSW Court of Appeal may be of particular interest given the current popularity of reality TV shows about home renovations. In this case the purchasers of the renovated property suffered massive losses due to substantial hidden defects. Although the purchasers were initially awarded over $1 million at trial, ultimately they were unable to recover any funds. Read on to find out more.

Terminating the engagement

No.1504 – 5 June 2015

A recent NSW Supreme Court decision in Southern Han Breakfast Point Pty Limited v Lewence Construction Pty Limited [2015] NSWSC 502 examines whether an adjudicator has the power to make a determination that the builder is owed a further progress payment under the AS4000-1997 contract after the work has been taken out of its hands.

This decision is likely to have persuasive influence in SA and other States that mirror the NSW legislation and may provide a strategic advantage to principals.

A new Draft Standard – AS11000

No.1503 – 12 May 2015

Standards Australia has released a draft version of AS11000 intended to merge and replace the suites of contracts related to AS2124:1992 and AS4000:1997.  The draft was put together with input from a number of organisations including Austroads, the Australian Procurement and Construction Council, the Australian Institute of Architects, the Civil Contractors Federation of Australia, the […]

Dropbox for service?

No. 1502 – 16 March 2015

This Update deals with the service of documents by electronic methods in the construction industry. While Courts are slowly moving towards the adoption of electronic systems for their own purposes, it appears that systems such as Dropbox or Aconex are not acceptable to the Court when it comes to ensuring that documents have been formally served on another party. While electronic service is convenient, it remains important that the other party has “received” the document.

‘One shot’ to adjudicate a payment dispute

13 February 2015

A recent case in the Northern Territory has confirmed that once a party has made an application for an adjudication of a payment dispute, it can’t re-apply for an adjudication of the same payment dispute, even if the application has been withdrawn.  As a payment dispute can’t be deferred or retriggered by the resubmission or […]

Can a letter be a payment schedule?

No. 1501 – 12 February 2015

The Supreme Court of South Australia has recently clarified the requirements of a payment schedule under the Building and Construction Industry (Security of Payment) Act 2009 (SA) in Linke Developments Pty Ltd v 21st Century Developments Pty Ltd [2014] SASC 203.

The case confirms the test to be applied is whether a respondent to a payment claim has provided a payment schedule that includes sufficient particularity so as to enable the claimant to decide whether it wants to pursue its claim or not.

The Security of Payment Legislation – What is it and what does it all mean?

12 February 2015

Security of Payment (SA) The Building and Construction (Security of Payment) Act (2009) (SA) (“the SOP Act”) provides a statutory right to progress payments for a party who is owed money under a construction contract. A party can enforce its rights to those progress payments through the use of the adjudication process under the SOP […]

Idle or hanging around?

Update No. 1407 – 17 December 2014

In this Update we look at a recent NT Supreme Court review of an adjudicator’s determination as to standby charges for a dredge working on the Marine Supply Base project. Neither party had brought to the attention of the adjudicator the point on which he decided whether the progress payment was due. While the Court said that the adjudicator was entitled to consider the point, it found he had denied natural justice to them by not asking for submissions on it.

Electronic service of documents

11 December 2014

In Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd [2014] QSC 30, the Court considered whether providing a link via a program utilising the ‘Cloud’, such as Dropbox, constituted effective service of adjudication documents. Basetec Services Pty Ltd (“Basetec”) served part of an adjudication application by an email attaching another email including […]

AS2124-1992 General Conditions; Clause 47

8 December 2014

Clause 47 of the Australian Standard AS 2124-1992 General Conditions provides that if a dispute arises, a party must give notice of the dispute and attempt to resolve the dispute before the matter is referred to litigation or arbitration.  This clause has recently been examined in Jamac Construction Group Pty Ltd v De Mol Investments […]

Adjudication after termination?

No. 1406 – 27 November 2014

Update 1406 looks at a recent decision of the Queensland Supreme Court where a concretor successfully claimed money from a head contractor through adjudication after the subcontract was terminated. The Court was asked to decide whether the adjudicator had made an error. We also look at the SA and NSW legislation on the same point and note a small but significant difference that will probably result in a different outcome.

Cost plus or fixed price?

11 November 2014

A recent decision of the Full Court of the Supreme Court of Tasmania, Kronenberg v Bridge [2014] TASFC 10, highlights the potential pitfall in a cost-plus contract of attempting nevertheless to provide some indication to the client of the likely total cost to build. In Kronenberg, the parties entered into a contract for the construction […]