Construction Law Update July 2020

2 minute read + PDF download  17.08.2020 Andrew Hales, Tom French, Cameron Ross, Nikki Miller, Alison Sewell, Owen Cooper, David Pearce, Michael Creedon, Julie Whitehead

In our July 2020 edition of CLU, we summarise decisions of the Supreme Courts of New South Wales, Queensland, Victoria and Western Australia, the Western Australia Court of Appeal and Victoria County Court. We also update you on recent and proposed changes to the Queensland and Western Australia security of payment legislation and amendments to the NSW strata building bond and defect inspection scheme under the Strata Schemes Management Act.

Your July 2020 edition is now available.
You can also access past editions.

In NSW, the decisions confirm that a contractor will not be able to argue that it was not given the opportunity to rectify defects, or the principal did not mitigate its loss in having another contractor rectify those defects, if the contractor's agreement to rectify is contingent on receiving payment of outstanding progress claims; liability can be apportioned for breach of a non-delegable duty of care and proportionate liability can be applied to a concurrent wrongdoer, even if it is protected by statutory immunities and is not a party to the proceedings; and a court will ordinarily favour a broad interpretation of a dispute resolution provision and hold parties to the bargain they strike in agreeing to resolve disputes by reference to expert determination.

In Queensland, the decisions confirm that a court will consider it just and convenient to order a separate trial on issues of liability and quantum in circumstances where a trial to determine all issues will not be ready for some time, even where that separate trial will risk prolonging the proceeding as a whole; and to make a case that a principal ought not to benefit from section 42 of the Queensland Building and Construction Commission Act, a contractor will need to establish that the principal knew it was engaging an unlicensed contractor to carry out building work.

In Victoria, the Supreme Court decisions reiterate the general approach courts will take when interpreting a contract, that is to give effect to the clear and unambiguous meaning of a clause unless there is a clear intention of the parties to negate its effect; and that parties to proceedings involving judicial review of an adjudicator's determination made under the Building and Construction Industry Security of Payment Act should be aware of the potential for the court to grant an indemnity certificate in respect of costs. The Victorian County Court has decided that unilateral withdrawal of a payment claim is not permitted and the later claim will be invalid; and parties should be mindful that if a reference date under a construction contract is expressed to arise as a single one-off payment on completion of the works, that reference date will only crystallise when everything required of the contractor has been fulfilled.

In Western Australia, the decision of the Court of Appeal highlights some of the difficulties parties to an arbitration agreement may have in keeping the dispute within the confines of a confidential arbitration, particularly where the dispute involves 'strangers' to the arbitration agreement. Finally, a decision of the Supreme Court confirms that each item in a progress claim can give rise to a payment dispute and multiple adjudications are permissible from the same progress claim, provided that they relate to non-overlapping items in the progress claim.


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