March 3, 2023
Welcome to the March edition of Projects & Construction Monthly.
This edition covers:
- recent construction news;
- the case of Allencon Pty Ltd v Palmgrove Holdings Pty Ltd trading as Carruthers Contracting [2023] QCA 6;
- LPC Lawyers’ recently completed ‘BIFA Refresher’ series;
- LPC Lawyers’ upcoming article series; and
- opportunities to join the LPC Lawyers’ team.
Recent Construction News
Brisbane 2032 Olympic Games
Australian Prime Minister, Anthony Albanese, and Queensland Premier, Annastacia Palaszczuk, recently announced a funding plan worth circa $7 billion for projects associated with the 2032 Brisbane Olympic Games.
The federal government will contribute $3.4 billion, including funding for the $2.5 billion Brisbane live arena. The arena is set to be located in Roma Street, linking with Cross River Rail, and is designed to seat 18,000 attendees indoors. After the Olympic Games, the venue will be converted into a live music venue. Construction is expected to commence in 2027 and be completed in 2030.
The Queensland government will contribute $2.7 billion for the proposed Gabba replacement works, including a new 50,000 seat stadium, which will link with both Cross River Rail and the Brisbane Metro. Construction is expected to commence in 2026 and reach completion in 2030.
In addition to the above, the federal and Queensland governments will jointly fund, in a 50-50 split, $1.87 billion in new developments and upgrade works for fourteen venues.
Centenary Bridge Upgrade
The Centenary Bridge Upgrade project is a major infrastructure initiative set to commence in 2023, which aims to improve the safety and efficiency of the Centenary Motorway – a key transport link between Brisbane and Ipswich. Crossing the Brisbane River between Kenmore and Jindalee, the upgrade is expected to increase the capacity of the motorway, reduce travel times, and improve connectivity for motorists, pedestrians, and cyclists.
The upgrade will involve the:
- construction of a new three-lane northbound bridge;
- rehabilitation of the existing bridge to create three southbound lanes; and
- upgrade to active transport facilities for pedestrians and cyclists.
The Queensland government has committed $186.5 million to the project and the federal government will contribute $112 million.
Georgiou, in a joint venture with BMD Group, have been awarded the $298.5 million project. Completion is expected in 2027.
Cross River Rail Milestone
Brisbane’s Cross River Rail project has achieved another milestone, with works in the 20-metre-deep Roma Street station box now reaching ground level.
Equivalent to a six-storey building underground, work crews have so far installed 7,520 cubic meters of concrete and 14,700 tonnes of steel in the station box, which will house the lifts and escalators for passengers to access the underground platforms. The station’s back-of-house structure is expected to rise out of the ground in early 2023, as construction continues.
Works are also continuing to progress inside the station’s 280-metre-long cavern, with approximately 13,100 cubic metres of concrete and 1,800 tonnes of steel installed to complete its permanent lining.
Roma Street station is one of four underground stations currently being constructed, and one of fifteen separate sites at which works are being carried out to deliver the project.
North-East Link Tunnels
Major works have restarted between Watsonia and Bullen on the North-East Link tunnels, which are part of Victoria’s largest ever road project. The project aims to cut travel times by up to 35 minutes and take 15,000 trucks off roads.
The first pieces of the project’s tunnel boring machines (TBM) are now being built and are scheduled for arrival later this year. Five road headers, including some that were used on the Metro Tunnel, are being refurbished to dig a section of the North-East Link tunnels in Bulleen.
Work has started on the TBM launch box in Watsonia (where the machines will begin their journey south) with more than 200 piles having been installed. Works north of Lower Plenty Road are also set to commence this year, with crews excavating the site to prepare to build ramps into the North-East Link tunnels.
Completion is expected in 2028.
Case Summary – Allencon Pty Ltd v Palmgrove Holdings Pty Ltd trading as Carruthers Contracting [2023] QCA 6
This case serves as a reminder to parties of a construction contract to be mindful of the time periods for responding to payment claims under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA), particularly as late or inadequate payment schedules under the BIFA may attract unwanted consequences.
Facts and Arguments
Allencon Pty Ltd (Allencon), the Subcontractor, was engaged by Palmgrove Holdings Pty Ltd trading as Carruthers Contracting (Carruthers), the Head Contractor, to construct roadworks under a lump sum subcontract.
The subcontract required Allencon submit its payment claims on the 24th of every month. Carruthers was then required to issue a payment certificate within 21 days of receiving the payment claim from Allencon. Payments were to be made within 14 days of receiving the payment certificate. Notably, under the subcontract, ‘Day’ was defined to mean calendar day.
On 24 December 2021, Allencon submitted a payment claim. Allencon relied on the time periods specified in the subcontract, which required Carruthers to issue a payment certificate by no later than 14 January 2022 and then to make payment by 28 January 2022.
However, Carruthers did not issue a payment certificate until 28 January 2022, 14 days after when Allencon alleged it was due. Carruthers instead sought to rely on section 76 of the BIFA, which provides that a payment schedule must be given:
- within the time stipulated under a construction contract; or
- within 15 business days after a payment claim is given,
whichever of these period ends first.
Relevantly, BIFA provides that a ‘business day’ excludes the ‘blackout period’ between 22 December to 10 January each year.
Carruthers argued the subcontract did not specify a time period within which a payment certificate was to be given, and that, in accordance with the BIFA, the earliest that Carruthers was required to issue a payment claim, when taking the blackout period into account, was 28 January 2022.
Held
The court disagreed with Carruthers, finding the subcontract did stipulate a 21 calendar day time period within which Carruthers was required to issue a payment schedule in response to a payment claim. On this basis, Carruthers should have submitted a payment schedule by no later than 14 January 2021.
Consequently, it was held that Carruthers had issued its payment certificate out of time and Allencon was entitled to judgment against Carruthers for the full amount of the payment claim, plus interest.
You can read the full case here.
LPC Lawyers’ ‘BIFA Refresher’ Series
LPC Lawyers has recently published a three-part series on the statutory rights and obligations for payment in Queensland under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA).
Part 1 – ‘Right to Payment’
The first part of the series provides an overview of statutory rights to claim for the payment of works undertaken, and the due date for payment of progress payments under the BIFA. Read more here.
Part 2 – ‘Subcontractor’s Charge or Payment Withholding Request’
Part two focuses on two avenues under the BIFA to recover amounts owed to a party lower in the contractual chain, from a party higher in the contractual chain, namely, a subcontractor’s charge, and a payment withholding request. Read more here.
Part 3 – ‘Statutory Trusts’
The final publication of the series provides a summary of the requirements and obligations for Project Trust Accounts and Retention Trust Accounts under the BIFA. Read more here.
LPC Lawyers’ Upcoming Article Series
LPC Lawyers’ next article series will consider the current challenges and future opportunities facing the Australian construction industry.
Stay tuned for the first article in the series which will be published on 6 March 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.