Previous issues:

Can a Superintendent submit a payment schedule under the Security of Payment Act? This was the question thrown into the spotlight during a recent case heard before the NSW Supreme Court.

The decision of Precept Services Pty Ltd v Concrete Equipment Australia (Trading) & Anor outlines some of the key issues to consider when upholding the validity of a notice of claim of charge.

The recent case of BMD Major Projects Pty Ltd v Victorian Urban Development Authority raised some interesting issues for both owners and contractors when dealing with latent conditions claim. It also highlighted the need for contractors to take care when considering the wording of latent condition clauses and notice provisions in construction contracts.

The creation of Infrastructure Australia by the Rudd Government represents the first concerted attempt at national leadership in the prioritisation and delivery of public infrastructure. What will be the likely impacts of this new statutory body for Australia's construction industry?

Few areas of law are developing so rapidly with such immediate impacts on the way industry participants run their business. This special report summaries the important decisions and legislation changes to the Building and Security of Payment Acts across Australia.

A looming question for the building and construction industry is, what will happen if the Australian Labor Party wins the election and would an ALP Government move to change the National Code and the Implementation Guidelines immediately after the election?

In the decision of Doolan v Rubikcon the Queensland Supreme Court has held that a contractor cannot resubmit a previously unpaid payment claim with a new date and make an adjudication application when the claim remains unpaid. Whilst successive payment claims do not necessarily have to be for new or additional work, they cannot be identical.

Professional designers in the building and construction industry have generally found comfort in the moral rights protections of the Copyright Act 1968. However, the first moral rights decision to be handed down by an Australian court in Meskenas v ACP Publishing Pty Ltd, provided a good test case for the application of the Act.

Arbitrations are a common dispute resolution procedure used by parties for construction disputes. However, the arbitration process can be slow and costly, particularly if either of the parties adopt 'go slow' tactics. The Institute of Arbitrators & Mediators Australia has launched a set of guidelines which aim to reduce the costs associated with arbitrations and provide the parties with quick determinations.

The Queensland Parliament has passed legislation to amend the Judicial Review Act, which will exclude an adjudicator's decision from judicial review, under the Act. It will be interesting to observe the extent to which parties will be able to challenge an adjudicator's decision after the amendments take effect.

Discussion and negotiation over use of the terms 'all reasonable endeavours' and 'best endeavours' are commonplace in many commercial contracts and were central to a recent decision handed down by the NSW Court of Appeal.

The revised Equator Principles launched in 2006, represent an important shift in project finance decision making requiring operators to account for the adverse social and environmental costs of their projects. The Principles require project financiers to play a role in ensuring projects are developed in a socially responsible manner, that reflect sound environmental practices.

Given that the contribution of the built environment to climate change was not addressed by Prime Minister's Taskforce report, it seems unlikely that a Commonwealth scheme will provide credits for abatement activities. The New South Wales Greenhouse Gas Abatement Scheme does allow for carbon credits for greenhouse gas abatement activities for buildings and parties involved in the construction or management should keep this front of mind.

The attractiveness of developing green buildings for developers and investors has been the result of their marketability with limited incentives provided by either the federal or state governments. On the other hand the UK Government has taken an incentive-based approach by introducing a stamp duty exemption for zero-carbon homes to encourage more companies to build green.

The NSW Land and Environment Court recently rejected a challenge, brought by a Sydney law student, that the $800 million redevelopment of the former CUB site was not environmentally sustainable. While the court rejected the challenge, the case is one of the first ripples of the coming wave of green litigation.

The new National Greenhouse and Energy Reporting Bill 2007, which will introduce mandatory measuring and reporting of greenhouse gas emissions, provides the first major plank of Australia's emission trading scheme. The Bill was introduced amidst pressure from the state and territory governments to establish a mandatory reporting scheme, which would be capable of reducing greenhouse emissions.

The potential for legal disputes involving green buildings revolves around the use of operational or performance-based rating tools, rather than design or delivery-based tools, according to Australia’s leading green building practitioner. Responsibility for obtaining a rating needs to be addressed in the relevant project and contractual documentation.

The Victorian Supreme Court's decision in Woods v. De Gabriele and Others, handed down on 15 June 2007, clarifies the effect of proportionate liability on risk allocations in contracts.

Three recent decisions of the NSW Court of Appeal demonstrate that, in the context of challenges to an adjudicator's determination under the Security of Payments legislation, the NSW decision of Brodyn Pty Ltd v Davenport (Brodyn) will continue to be followed until the High Court determines otherwise.

Some courts have held that a party relying on a consequential loss clause must have actual knowledge, at the time of the contract, of special circumstances likely to cause the loss, otherwise the damages are too remote to be recoverable. The law on this matter, however, is not settled.

What are the inherent risks of the Green Star ratings tool and what issues do project participants need to address to ensure risk and responsibility for achieving rating outcomes are appropriately allocated? And, how can disputes be avoided when ratings expectations are not met?

The adoption by the Commonwealth 12 months ago of a new policy aimed at reducing the environmental impact of government operations is driving the construction of more energy-efficient commercial buildings and premises.  Increasingly, the market is driving the shift towards policy compliance, a trend likely to grow across the states as the commerciality of 'green business' becomes a market driver.

The Australian Taxation Office has released a ruling which explains its view of the operation of the construction withholding tax provisions.

The importance of appropriate disclosure in commercial negotiations, where it can be reasonably expected to occur, was reiterated in the decision of EK Nominees Pty Ltd v Woolworths Ltd.

The High Court, in Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd, overturned a Full Federal Court decision, holding that a land owner who commissions architectural drawings as part of a land development has the right to sublicense the use of those drawings to a purchaser who wishes to continue the development.

Environmental considerations are key factors affecting business decisions today, with many organisations implementing an environmental rating system. Although there are obvious environmental and commercial benefits for doing so, achieving these ratings often means higher development costs.

As the decision of the Hong Kong Court of First Instance in Government of the HKSAR v Hongkong and Yaumati Ferry Co Ltd shows, the position in Hong Kong remains that good faith cannot be implied in negotiations.

This special report summarises the important decisions dealing with the Building and Security of Payment Acts across Australia in 2006. While many of the decisions were made by the NSW courts they involve almost identical provisions in Queensland, Victoria, Western Australia and the Northern Territory. Some of the key issues addressed by these cases include: invoking contractual dispute resolution procedures despite failing to pay a debt judgment entered in accordance with an adjudications certificate multiple payment claims preconditions to reviewing an adjudicator's decision by a superior court payment schedules misleading or deceptive conduct in the service of payment claims payment claims by unlicensed builders when variation agreements are not a 'construction contract'.

In Watpac Australia Pty Ltd v Spring Hill Developments (No 1) Limited, Watpac was granted an injunction under s. 67J of the Queensland Building Services Authority Act 1991 (Act) restraining SHD from calling upon the security provided by Watpac under the building contract because SHD did not give notice for its claim on the security within the timeframe required by s. 67J.

Most security of payment legislation allows disputes over progress payments to be determined quickly, reducing the risk of construction contractors being starved of cash-flow during the course of a project.  A recent Queensland adjudication under the Building and Construction Industry Payments Act 2004 (Qld) has gone one step further by allowing a claimant law firm to recover a progress payment under the Act.

Liquidated damages clauses are a common feature of standard form construction contracts. Parties who agree to exclude liquidated damages provisions from standard contracts, preferring to seek general damages in the event of a breach, need to be careful because in excluding liquidated damages they can sometimes inadvertently exclude general damages as well.

The recent Federal Court decision of AWB Limited v Cole (No. 5) provides a very public warning on the dangers of referring to legal advice. Clients who disclose the gist or substance of legal advice risk having to reveal all communications about that advice as the law may impute a waiver of legal professional privilege.

Two interesting decisions in NSW have recently confirmed the extent to which contractual arrangements will be overridden by the Trade Practices Act which, in section 52, prohibits corporations from engaging in misleading and deceptive conduct. In both cases, the misleading and deceptive conduct was silence, or a failure to disclose information that was considered to be material.

The recent decision in OneSteel Manufacturing Pty Ltd (OneSteel) v United KG Pty Ltd (United) is a cautionary tale for contractors and shows that courts are increasingly prepared to interpret contracts subject to a requirement of reasonableness.

Reciprocal enforcement will strengthen Hong Kong's position as a regional centre for dispute resolution and will ultimately assist in the integration of Hong Kong and Mainland systems, but potential dangers are lurking for the unwary.

Two recent decisions by the Supreme Court of New South Wales, delivered just six days apart, highlight continuing uncertainty about the application and interpretation of the Security of Payment legislation.

The outcome of Commonwealth Bank v. Witherow raises the possibility - in jurisdictions where proportionate liability cannot be excluded by contract (Victoria, Queensland, South Australia, ACT and Commonwealth) – that a principal might be able to protect its recoveries against a contractor by structuring a claim in such a way that it is not a claim for damages.

The growing national appetite for infrastructure is driving an evolution in government procurement, to the point where alliance contracting is starting to achieve mainstream approval.

The high profile Federal Court case of Seven Network Limited v News Limited shows that Australian courts are taking a tough stance on expert witnesses and the admissibility of experts' reports as evidence.

Recent amendments to the Victorian Crimes Act to prevent unlawful document destruction creates new liabilities for organisations and their lawyers.

The introduction of Security of Payment laws in most Australian jurisdictions may render unenforceable Equivalent Project Relief provisions commonly used in PPP/PFI subcontracts.

Determining when and how a duty of good faith applies in Australian contract law is a complex issue. The recent Victorian case of Esso Australia Resources Pty Limited v Southern Pacific Petroleum adds to the debate.

The first reported cases to use the new Commonwealth Building and Construction Industry Improvement Act 2005 highlight the construction industry's increased willingness to clamp down on unlawful industrial action.

Two recent cases, Ringrow Pty Limited v BP Australia and State of Tasmania v Leighton Contractors Pty Ltd highlight the difficulties facing parties seeking to show that a liquidated damages provision should be struck out as a penalty.

The recent decision in Monarch Building Systems Pty Ltd v Quinn Villages Pty Ltd shows how important it is to thoroughly resolve all contract negotiations, as subsequent conduct may not be sufficient to ensure that a binding contract is in place.

Proposed amendments to the Building and Construction Industry Security of Payment Act 2002 (Vic) will enable persons carrying out building or construction work to recover progress payments more effectively.

Since 3 March 2006, restrospective construction certificates have no effect. This could have serious implcations for development, building or sales contracts.

The traditional tender process can stifle innovation. A new process is needed that promotes the tabling of innovative solutions which can be incorporated into the competitive bid process.