Insights

Construction companies in Queensland and New South Wales may no longer be able to seek adjudication with respect to their work undertaken on mining leases.

Adjudication determination on payment claim void as it was not for "construction work"

The Queensland Supreme Court has held in the recent matter of Agripower Australia Ltd v J&D Rigging Pty Ltd & Ors [2013] QSC 164 that an adjudication determination in favour of the contractor concerning a payment claim of $3.1 million for dismantling of mining plant upon land over which a mining lease was granted was void, on the basis that the contract was not for "construction work" within the meaning of section 10 of the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA).

"Land" does not include mining leases

Section 10(1)(a) of the BCIPA provides that construction work means "the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land..."

The Court found that:

1. mining leases were not "land" within the definition in the Acts Interpretation Act 1954 (Qld) or in accordance with common law principles. Hence, mining leases were not "land" within the meaning of the BCIPA;

2. the mining plant was brought onto the land over which the mining leases were granted. It had to be removed before the expiry of the mining leases. Hence, the mining plant may have formed part of the mining leases, but did not form part of the "land";

3. thus, it did not constitute "construction work" and hence, a payment claim could not be made under the BCIPA and the adjudication determination was void.

Similar security of payment legislation in NSW

The definition of "construction work" in section 5(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (NSW Security Of Payment Act) is similar to the BCIPA.

The most common "construction work" performed is that as defined in Sections 5(1)(a), (b), (c) and (e) of the NSW Security Of Payment Act, which relies on such work "forming, or to form, part of land".

Companies in NSW performing work on land over which mining leases are granted may not be able to seek adjudication on payments

If the Queensland decision is applied in NSW, then construction companies seeking adjudication with respect to work on land over which mining leases are granted may be susceptible to challenge. Obviously, the precise facts relevant to each case must be carefully considered.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​