Implications for contractors working in the resources sector

Oct 2013 |

Senior Associate Kelly Pain examined implications for contractors working in the resources sector during her session on Saturday 19 October at the AMPLA National Conference.

The recent decision by the Queensland Supreme Court in Agripower Australia Ltd v J&D Rigging Pty Ltd & Ors [2013] QSC 164 found that certain work carried out on a mining lease did not constitute 'construction work' for the purposes of the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA). The decision is significant for those involved in the mining industry and is perhaps welcomed by Principals undertaking works in this space. The respondent J&D Rigging has appealed.

Security of payment legislation governs the dispute resolution process for entitlement to payments under a 'construction contract'. It provides those claiming a progress payment (normally contractors and consultants) with the right to a quick and easy method of monetary recovery, rather than having to institute proceedings through the commonly slower and more costly processes of arbitration, expert determination and litigation. Where the security of payment legislation does not apply, and there is a dispute as to payment, it may need to be resolved by these alternative methods.

This decision may allow Principals to avoid the present pressure of claims under this regime and the risk of potential ambush claims made under the security of payments legislation. Contractors will need to fully assess their rights under the contract and consider whether the work to be completed under a contract will be within the definition of 'construction work' under BCIPA.

Given the similarity of the interests created by petroleum and mining tenure, the decision, subject to the outcome of the present appeal, may have scope to operate for work undertaken in the petroleum as well as mining sector. Kelly's presentation provided an analysis of the important elements of the court's decision and what it means for the mining and petroleum industries. It also examined how the decision in Agripower is likely to impact on other jurisdictions under their respective security of payment legislation regimes.

If you would like to request a hardcopy of Kelly's conference paper, please contact us by clicking here.