August 4, 2023
Welcome to the August edition of Projects & Construction Monthly.
This edition addresses:
- Recent construction news;
- The case of Veesaunt Property Syndicate 1 Pty Ltd v Alliance Building and Construction Pty Ltd [2023] QSC 129;
- LPC Lawyers’ recently completed ‘Time & Cost’ series;
- LPC Lawyers’ upcoming article series; and
- Opportunities to join the LPC Lawyers’ team.
Recent Construction News
Coomera Connector
The Coomera Connector (also referred to as the “Second M1”) will be a new 45-kilometre highway corridor between Loganholme and Nerang. Located to the east of the Pacific Motorway (M1) and the heavy train line, the Coomera Connector will relieve pressure and improve safety on the M1 by providing an alternative route for local traffic, reducing congestion at interchanges and providing improved connections and accessibility to more transport options on the Gold Coast
Construction of Stage 1 North commenced in March 2023 and is well underway. In July, the project saw the arrival of a 48-metre-long piling barge named Maeve Anne. The Maeve Anne is equipped with a 250-tonne crane and piling rigs (including vibratory hammers and a fly drill) to assist with building a temporary jetty on the northern banks of the Coomera River to support the construction of a nearly one-kilometre-long bridge as part of Stage 1 North.
Stage 1 North works are expected to be completed in 2025.
Central Queensland Hydrogen Project
The Central Queensland Hydrogen (CQ-H2) project is a proposed renewable hydrogen production and export facility, to be constructed on a 236-hectare site in Aldoga, 20 kilometres west of Gladstone.
As Queensland’s largest ‘green’ hydrogen project, a $117 million investment will fund a Front End Engineering Design (FEED) study, which also makes it the largest investment in an Australian green hydrogen project of its kind to date.
The project involves a phased development and aims to produce approximately 200 tonnes of renewable hydrogen per day by 2028, generated by up to 640 megawatt electrolysers. If successful, production will be scaled up to 800 tonnes per day by 2031 using 2,240 megawatt electrolysers.
CQ-H2 would support more than 8,900 new jobs and deliver $17.2 billion in hydrogen exports, adding $12.4 billion to Queensland’s Gross State Product over 30 years.
Gold Coast Light Rail
Construction continues on the $1.2 billion Gold Coast Light Rail Stage 3 expansion. Stage 3 includes 6.7 kilometres of new dual-track light rail running from Broadbeach South Station to Burleigh Heads, eight new light rail stations, and an upgrade and expansion of the existing depot and stabling facilities.
John Holland has commenced the upgrade and relocation of essential underground utilities, with track laying expected to commence in 2024.
Five new trams arrived on the Gold Coast in July 2023, ready to undergo testing before being absorbed into the current operational fleet. The five new trams take the Light Rail fleet to 23 and puts the Stage 3 expansion on track to deliver high frequency tram services from day one.
Construction of Stage 3 is due to be completed in 2025.
Case Summary – Veesaunt Property Syndicate 1 Pty Ltd v Alliance Building and Construction Pty Ltd [2023] QSC 129
This case serves as a reminder that a party in default will not be allowed to take advantage of its own default to trigger termination.
Facts
Veesaunt Property Syndicate 1 Pty Ltd (Veesaunt), the Principal, entered into a contract with Alliance Building and Construction Pty Ltd (Alliance), the Head Contractor, for the design and construction of residential townhouses on the Gold Coast.
The parties’ rights and obligations under the contract were subject to the satisfaction or waiver of a number of conditions precedent, which Alliance failed to satisfy (including the provision of a bank guarantee and the execution of a tie-in deed with the financier for the project).
A dispute arose between the parties about whether the contract was terminated, because the conditions precedent were not satisfied or waived, or if it remained on foot.
Veesaunt’s Position
Veesaunt contended that:
- a notice the Superintendent gave Alliance to proceed with the works effectively waived the outstanding conditions precedent within the time period stipulated under the contract;
- in the alternative, if the notice was not effective notice within the terms of the contract, it waived the conditions precedent under general law because each of the conditions precedent were solely for the benefit of Veesaunt; and
- Alliance should be precluded from taking advantage of its failure to satisfy the conditions precedent to avoid the contract.
Alliance’s Position
Conversely, Alliance argued the contract had been terminated, on the basis that:
- any waiver was required to be affected by Veesaunt, and not the Superintendent;
- the Superintendent did not communicate that its notice was issued on behalf of Veesaunt, nor that it had the authority to waive the conditions precedent;
- the notice was not a deliberate, clear, and unequivocal waiver; and
- the contractual terms stipulated that a waiver may only occur in accordance with the contract and, therefore, a waiver under general law could not have occurred.
Held
The court held that:
- the Superintendent’s notice was not a clear, unequivocal, and deliberate waiver of the conditions precedent, and did not waive those conditions in accordance with the contract;
- Veesaunt was the only party that could waive the conditions precedent;
- any waiver had to be in accordance with the terms of the contract, and not under general law; and
- the terms of the contract demonstrated a clear intention of the parties that the contract would terminate if the conditions precedent were not satisfied by Alliance, or waived by Veesaunt.
Notwithstanding the above, the court upheld that the contract remained on foot, observing that the prevention principle does not allow a party who is in default to take advantage of that default. Therefore, as Alliance had failed to comply with the conditions precedent it was contractually obliged to meet, it could not rely on the preconditions it had not satisfied to contend that, absent a waiver, the contract had terminated.
You can read the full case here.
LPC Lawyers’ ‘Time & Cost’ Series
LPC Lawyers has recently completed the publication of a three-part series which discusses two common areas of dispute in the construction industry, namely, Extensions of Time and Variations, including entitlements to claim, payment, relevant contractual requirements, and their often-interconnected relationship with each other and project completion.
Part 1 – ‘Key Claims in Construction Disputes’
The first part of this series provides an overview of the process, requirements, obligations and entitlements for Extensions of Time and Variations. Read more here.
Part 2 – ‘Extensions of Time’
The second instalment provides a refresher on the types of delay, entitlement to claim for delays, and the impact of Extension of Times on completion of a Project. Read more here.
Part 3 – ‘Variations’
The final instalment explores types of Variations, obligations to complete, and entitlements to claim. Read more here.
LPC Lawyers’ Upcoming Article Series
LPC Lawyers’ upcoming series will explore common project delivery models for defence, renewable, and transport infrastructure projects, and considerations regarding administration of construction contracts for these types of projects.
Stay tuned for the first article in the series which will be published on 7 August 2023.
LPC Lawyers’ Continued Expansion
LPC Lawyers is looking to hire as we head into 2023, with opportunities for growth in our expanding practice.
Litigation Lawyers (1-3 years PAE)
Working closely with an ex-top tier partner, this role is ideal for a candidate who is highly motivated and has experience in drafting correspondence, simple pleadings, briefs for Counsel, and some client advisory work.
For more information about our current opportunities visit our website here or to apply, please email your resume and cover letter to our Manager of Business Services at [email protected]