Boom and bust

No. 1903 – 14 August 2019

Introduction In the last few months, several South Australian residential building companies have collapsed, leaving behind a trail of debts. Behind every collapse is concealed the pain of the suppliers and subbies. The devastating financial impact is likely to be felt for years to come.  None of this is new.  For decades, builders have come […]

The Delaminating Disaster

No. 1901 – 13 May 2019

Introduction The 28 February 2019 decision as to liability for the Lacrosse Tower fires of November 2014 will send shockwaves through the construction industry.[1] The fire was caused by a discarded cigarette butt that ultimately ignited Aluminium Composite Panelling (“ACP”) on the façade of the 21 storey apartment block.  The industry has been waiting with […]

Getting the contract out of the bottom drawer

No. 1901 – 1 April 2019

Introduction  This Update considers the law relating to Superintendents.  It raises an interesting question as to whether the conduct of a party who fails to follow the contract can have the flow on effect of varying their rights under the contract.   Superintendents  Many commercial construction contracts provide for the Principal to appoint a Superintendent.  The Superintendent has duties akin to those of an umpire who is to ensure the Contractor and the Principal play fair when constructing the […]

Mistake? What mistake?

No. 1801 – 16 March 2018

In this update we report on two important decisions published by the High Court of Australia in relation to the application of security of payment laws.

Contract is King

11 January 2017

Today the High Court delivered its first judgment in respect of the security of payment and adjudication regime (Southern Han Breakfast Point Pty Ltd (in Liquidation) v Lewence Construction Pty Ltd [2016] HCA 52). Two things come out of the decision: The existence of a ‘reference date’ is a jurisdictional precondition to making a payment […]

Unfair contract terms – extension to small business

No. 1602 – 12 August 2016

This update details changes to ‘unfair contracts’ legislation that will come into effect on 12 November 2016, and the likely impact of those changes to the construction industry.

Fenwick Elliott Grace awarded First Tier Rating again by Doyle’s Guide

17 May 2016

In 2016, Fenwick Elliott Grace has again been awarded a First Tier Rating by Doyle’s Guide in Leading Adelaide Construction Law Firms. The 2016 listing details firms practising within the areas of Construction, Infrastructure and Major Projects matters in the South Australian legal market who have been identified by clients and peers for their expertise […]

Issuing payment claims – timing and recent developments

No. 1601 – 4 February 2016

In this Update we look at timing considerations when deciding to issue a payment claim.

A pre-condition to a valid payment claim issued under the Security of Payment legislation is that it must be issued at a time when a right to issue has arisen.

The issue of timing is surprisingly complex and, given that a failure to satisfy this pre-condition can result in an adjudicator dismissing the claim without any assessment of the substantive merits, we have prepared this update to provide some clarity on the question of timing, and in doing so have referenced and described some key relevant recent cases.

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 […]

“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.

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.

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.

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.

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.

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.

Just pay the money now

No. 1405 – 20 October 2014

A recent Queensland Supreme Court case where a contractor sought an injunction to prevent enforcement of a $14 million adjudication award shows that Courts remain committed to the purpose of the Security of Payment legislation: keeping cash moving in the construction industry.