New South Wales

The decisions arising out of New South Wales highlight that:

• A non-exclusive jurisdiction clause is not a significant factor in favour of granting stay applications under the Service and Execution of Process Act 1992 (Cth) (Act);
• Historical breaches (which have been cured) are not a basis for an order for specific performance or statutory damages under section 68 of the Supreme Court Act (known as Lord Cairns' Act damages);
• A court is not permitted to in effect rewrite or reshape the bargain entered into between the parties;
• An order for specific performance would not necessarily be granted even where the other party had misconstrued the interpretation of a contract;
• Statutory damages under section 68 of the Supreme Court Act are a discretionary award (cf where common law damages are as of right). Even if the preconditions to entitlement for these damages are satisfied, the award of these damages is at the discretion of the court;
• Where a contract provides for a reduction in the contract sum for omitted or decreased works, the relevant consideration is a common sense analysis of whether works have been omitted or decreased, and not whether work is done but in a different manner to achieve the same or a similar result;
• Contract rates are a ceiling for quantum meruit claims arising where parties do not document variations in writing;
• if any combustible material is attached to a building, the court is likely to order developers and builders to remove the same and/ot owners may look to developers and builders to bear the cost of rectification; and
• It is not enough to say a defect exists to establish a breach of the statutory duty of care owed under the Design and Building Practitioners Act 2020 (NSW). A claimant must inform the defendant precisely how they were negligent.

Queensland

The decisions in the Queensland courts have upheld that:

• multiple contract jurisdictional arguments must be raised in the payment schedule to be adjudicated upon;
• performance requirements under a contract will govern whether correspondence can be properly characterised as a direction to undertake a variation or a notice to rectify defective work;
• Courts will strictly apply the requirements of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) in relation to adjudication applications and where an adjudicator considers a new defence included in an adjudication response, which is not included in the payment schedule, this will result in jurisdictional error and lead to the decision being declared void;
• Courts will continue to focus on giving a commercial interpretation to contracts;
• a court will exercise its discretion to grant a stay pursuant to rule 800 of the Uniform Civil Procedure Rules 1999 (Qld) where one party holds a legitimate concern that it will not receive payment of a prospective arbitral award due to the other party restructuring its financial affairs;
• failing to comply with the express requirements under a contract for reaching practical completion may disentitle a contractor to payment. If a builder refuses to undertake remedial work in accordance with its obligations under the contract, this may be considered a repudiation of the contract, entitling the other party to the contract to terminate.
• The term 'defined legal relationship' in section 7 of the Commercial Arbitration Act 2013 (Qld) is to be given a broad interpretation. Parties to a construction contract containing an arbitration clause will be parties to the arbitration agreement created by that clause. The relationship does not need to be further defined or expressly set out in the arbitration agreement; and
• Legal professional privilege extends to documents created in the course of obtaining legal advice, even if those documents are not communicated to or from a lawyer.

Victoria

In Victora, the Supreme Court allowed ALE Heavylift (Australia Pty Ltd) (claimant) to recover payment under the Building and Construction Industry Security of Payment Act 2002 (Vic) (Act) for an amount which had been the subject of an offset for liquidated damages in an earlier payment schedule, because the claim was characterised as being for works performed – and not as a recoupment of liquidated damages

If there is anything in particular you would like us to cover in our Construction Law Updates in 2022, please get in touch with our team.