March 1, 2024
Welcome to the March edition of Projects & Construction Monthly.
This edition addresses:
- Recent construction news;
- The case of Descon Group Australia Pty Ltd v 35 Merivale Pty Ltd [2023] QSC 276;
- LPC Lawyers’ recently completed ‘Built By Design’ series;
- LPC Lawyers’ current ‘Natural Collaborators’ 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 servicing approximately 60,000 cars a day, and providing improved connections and accessibility to more transport options on the Gold Coast.
Since construction of the project’s Stage 1 North package commenced in March 2023, the following works have been completed:
- more than 80 per cent of piling works (a total of 148 piles installed to date) in respect of the both the new Coomera River bridge (which is approximately one kilometre long) and the Coomera overflow bridge;
- approximately 3,500 controlled modulus columns have been installed project-wide, to stabilise and reinforce the ground; and
- more than two kilometres of new drainage infrastructure has been installed across the site.
Stage 1 North works are expected to be completed in 2025.
Kangaroo Point Green Bridge
The Kangaroo Point Green Bridge is set to become one of Brisbane’s newest green bridges, connecting Kangaroo Point (at Scott Street) to the Brisbane CBD (at Alice and Edward Streets).
Spanning approximately 460 meters across the Brisbane River, this cable-stayed pedestrian bridge will be one of the longest of its kind once completed. The bridge will feature dedicated cycle and pedestrian paths, viewing platforms and rest nodes, green design features including solar panels, cooling vegetation and shade cover along the length of the bridge, and a navigable bridge clearance of 12.7 metres (as per the Captain Cook Bridge).
Major works commenced in early 2022, with completion expected in 2024.
Gold Coast Light Rail
As construction continues on the $1.2 billion Gold Coast Light Rail Stage 3 expansion, planning for Stage 4 has begun.
Stage 4 will include a 13-kilometre extension of Stage 3 (between Burleigh Heads and Coolangatta), with the completed infrastructure (featuring dual track light rail) aiming to service significant local cultural and urban attractions, including Burleigh Head National Park, Palm Beach Village Centre, Currumbin Wildlife Sanctuary, Southern Cross University, Gold Coast Airport and Coolangatta shopping and business centres.
The preliminary business case for Stage 4 has been completed and is currently under review. Once delivered, Stage 4 will complete the Gold Coast Light Rail’s 40-kilometre connection between Helensvale and Coolangatta.
Case Summary – Descon Group Australia Pty Ltd v 35 Merivale Pty Ltd [2023] QSC 276
This case serves as a reminder to contracting parties to be aware that if seeking recourse to security under a construction contract, it is critical to ensure that any contractual preconditions are fulfilled prior to seeking said recourse.
Facts
35 Merivale Pty Ltd (Merivale), the Principal, engaged Descon Group Australia Pty Ltd (Descon), the Contractor, to construct a residential apartment building in South Brisbane.
Under the construction contract, Descon was required to provide security by way of unconditional and irrevocable insurance bonds, and Merivale was entitled to have recourse to the bonds in specific circumstances, including:
- for a debts owed by Descon to Merivale under the contract which remained unpaid after the time for payment, or five business days after demanding payment (where there is no time for payment specified); or
- in respect of any claim to payment (liquidated or otherwise) Merivale may have against Descon under the contract which remained unpaid after 5 business days from demanding payment.
After building work began to fall behind schedule, the parties entered into a commercial solution which led to the entry into two side deeds.
Relevantly, a clause of the first deed contained a provision concerning security such that the security provided was to be capable of being called on immediately and without notice or consent of the builder where, amongst other things, work had been taken out of the hands of the builder or where the contract had been terminated.
Disputes arose between the parties when Descon made significant progress claims while Merivale considered that Descon owed it $3,557,275.01. Merivale issued Descon a show cause notice on the grounds of delay and other breaches of Descon’s obligations (including a failure to provide proof of professional indemnity insurance, and breaches of various warranties). Descon purported to show cause, but in accordance with a provision of the contract, Merivale took the work out of Descon’s hands.
Fearing that Merivale would call on the bonds, Descon sought an interlocutory injunction to restrain Merviale from calling on the bonds, and a freezing order for the same effect.
Held
The court refused Descon’s application for an interlocutory injunction on the basis that:
- Descon failed to prove a prima facie case that Merivale had no entitlement to call on the bonds because Descon’s response to the allegation that the building work was behind time was weak;
- even if Descon had proved a prima facie case, the injunction would still have been rejected because the balance of convenience favoured Merivale;
- the court was satisfied that Merivale had followed the contractual processes to enliven its rights to call on the bonds; and
- Merivale’s claim for $3,557,275.01 was certified under the contract, while Descon’s progress claims were not.
Similarly, the court denied Descon’s application for a freezing order because Descon was unable to make out a prima facie case and the court found no evidence to suggest that Merivale would be unable to meet any damages award.
You can read the full case here.
LPC Lawyers’ ‘Built By Design’ Series
LPC Lawyers has recently completed the publication of a three-part series which provides an overview of the general risks associated with design that industry participants should be aware of before entering into a construction contract.
Part 1 – ‘Design Risks’
The first part of this series provides an overview of who is responsible for design risks, common design risks encountered within the industry, and how Contractors can best manage these risks. Read more here.
Part 2 – ‘What is Your Liability?’
The second instalment discusses the language used in typical Contractor design warranties, specifically the terms “design life”, “service life”, “fit for purpose”, and “due care and skill”, and what this means for Contractors engaged through a design and construct contract. Read more here.
Part 3 – ‘Evolution of Risk?’
The final instalment explores the evolution of design risk for Contractors from developing a design for tender to providing a final design, and briefly discusses ways to minimise the design risks Contractors face. Read more here.
LPC Lawyers’ ‘Natural Collaborators’ Series
LPC Lawyers’ upcoming series will explore how collaborative contracting works, the drafting which underpins such, the ways in which parties can ensure success, and how the target-cost contracting model works.
Read the first article in the series here.
LPC Lawyers’ Continued Expansion
LPC Lawyers is looking to hire 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 Charlie at [email protected]