Andrew Orford (LinkedIn profile) and Laura Macleod note that the following court decision is now under appeal and will be heard by the Queensland Court of Appeal in due course.

Wiggins Island Coal Export Terminal Pty Ltd v Monadelphous Engineering Pty Ltd & Ors [2015] QSC 307

Significance

The court decided that the Building and Construction Industry Payments Act 2004 (Qld) (Act) applies to construction work carried out outside Queensland where the work has a relevant association with Queensland.

Facts

Wiggins Island Coal Export Terminal Pty Ltd (applicant) entered into a contract with Monadelphous Engineering Pty Ltd and Muhibbah Construction Pty Ltd (respondents) for the fabrication and installation of a shiploader and an associated piece of equipment called the tripper (contract).

The contract provided for the shiploader and tripper to be fabricated in Malaysia and then installed on a wharf in Gladstone. The shiploader and tripper would become attached to the wharf by their confinement to rails fixed to the wharf and by water hoses and electrical cables. The shiploader and tripper would then travel back and forth along the rails on the wharf to load different hatches of a ship.

The respondents made an adjudication application under the Act in relation to a portion of the fabrication work carried out in Malaysia. The adjudicator decided the applicant should pay the respondents $22,132,839.35.

The applicant challenged the decision on the basis that the adjudicator had no power to order that any sum be paid for the relevant fabrication work, because it was construction work carried out outside Queensland and was therefore excluded from the operation of the Act by section 3(4) of the Act.

Decision

Philip McMurdo J dismissed the application on the basis that the Act applied and therefore the adjudicator had jurisdiction.

In characterising the fabrication work as construction work, His Honour disagreed with the applicant's contention that the shiploader and tripper constituted distinct structures 'to form part of land' under section 10(1)(a) of the Act. Rather, His Honour found that the shiploader and tripper were 'properly characterised as components of the wharf' so that the fabrication work fell under section 10(1)(e) of the Act.

McMurdo J found it significant that the fabrication work was construction work 'only because it was an integral part of construction work undertaken inside Queensland'. In such circumstances, His Honour could not bring himself to find that the fabrication work was construction work carried out outside Queensland.

His Honour concluded that while the shiploader and tripper were fabricated outside Queensland, 'the contract was providing for part of the construction of a structure in Queensland and was, in the sense of s 3(4) of the Act, “dealing with” construction work carried out in Queensland'. Therefore, the application of the Act was not displaced by section 3(4) of the Act.

The applicant has appealed.