The Supreme Court of Queensland recently handed down a decision that further clarifies the licensing requirements necessary for engineers and electrical contractors to make a claim for payment under theBuilding and Construction Industry Payments Act 2004 (Qld) (BCIPA). This decision highlights the importance of having an appropriate licence when carrying out construction work.

Background

Queensland Engineering & Electrical Pty Ltd (QE&E) was contracted by Agripower Australia Limited (Agripower) to provide electrical engineering works at a site at Charters Towers. QE&E provided modified power plant drawings to Agripower. QE&E agreed to carry out the commissioning of the power plant works which included starting and stopping each part of the plant and proving that each stop and start button worked as required. QE&E drafted step by step procedures on what to do and how to start each part of the plant. QE&E agreed to carry out the preliminary electrical design portion of the works and the new plant, each of which involved the carrying out of an audit on a number of second-hand switchboards intended to be used at the granulation plant. Q&E later agreed to provide drawings for the location of conduits for a switch room. The drawings were completed in accordance with Australian Standards AS3000 and AS3008 for the relevant electrical works.

QE&E was awarded payments under BCIPA. Agripower applied to the court for a declaration that the adjudication decision made under BCIPA was void. Agripower argued that the adjudication decision was illegal and unenforceable because the contract was in breach of two statutory provisions, namely:

  • Section 56(1) of the Electrical Safety Act 2002 (Qld) (ESA) which provides that a person must not conduct a business that includes the performance of electrical work unless the person is a holder of an electrical contractor licence that is in force; and

Section 56(2) of the ESA which provides that a person conducts the business or undertaking that includes the performance of electrical work if it advertises, notifies, states that or makes a statement to the effect that, the person carries on the business of performing electrical work.

  • Section 115(1) of the Professional Engineers Act 2002 (Qld) (PEA) which provides that a person who is not a practicing professional engineer must not carry out professional engineering services.

Professional engineering service means an engineering service that requires, or is based on, the application of engineering principles and data to design, or to a construction, production, or operation or maintenance activity, relating to engineering, and does not include an engineering service that is provided only in accordance with a prescriptive standard.

QE&E argued that all the works they carried out or caused to carried out were performed in accordance with a prescriptive standard so that a practising professional engineer was not required to supervise the works.

Prescriptive standard means a document that states procedures or criteria:

  1. For carrying out a design, or a construction, production, operation or maintenance activities, relating to engineering; and
  2. The application of which, to the carrying out of the design, or the construction, production, operation or maintenance activity, does not require advanced scientifically based calculations.

Decision

Douglas J held that the contract was illegal and that QE&E was not entitled to progress payments under BCIPA and the adjudication decision was void for jurisdiction error. In coming to this decision, Douglas J found:

  • QE&E breached s 56(1) of the ESA, which made the contract illegal:
    • The use of the name ‘Queensland Engineering & Electrical Pty Ltd’, statements made by the director that it carried on the business or providing electrical engineering and electrical works and his responses to the applicant in agreeing to perform such work made it sufficient for an objective conclusion to be made that the first respondent breached s 56 of the ESA by holding itself out as carrying out electrical work, by reason of conduct.
    • Although there is an exception under s 56 of the ESA, that there is not a contravention if the person contracts for the performance of work that includes electrical work if it is to be performed by others, that exemption did not apply here both because QE&E did the work themselves and because it represented to the public that it was willing to do the work.
    • The work QE&E performed was ‘electrical’ work as defined in s 18 of the ESA. It involved at least the connection of electricity supply wiring to electrical equipment and the installation, testing, alteration or maintenance of electrical equipment or an electrical installation.
    • The object of the ESA to provide electrical safety of members of the public through the proper licensing of persons, who perform electrical work, strongly indicated that a contract entered into with an unlicensed person is prohibited.
  • The contract was illegal as it was contrary to s 115(1) of the PEA:
    • The evidence established that QE&E was performing ‘professional engineering services’ in breach of the PEA. The work did not involve a ‘prescriptive standard’ because it left significant room for professional judgment and required advanced scientific calculations.

This decision is consistent with the principle decided in Cant Contracting Pty Ltd v Casella [2007] 2 Qd R 13, which held that an unlicensed building contractor (under the Queensland Building and Construction Commission Act 1991 (Qld)(QBCCA)) is not entitled to progress payments under the BCIPA.

Outcome

In order to be entitled to claim for payments under BCIPA a claimant will need to consider if they have met the appropriate licensing requirements. This is no longer just the case for building work as defined under the QBCCA but also for electrical work and engineering work.

Where a claimant performs or holds itself out to be carrying out the business of performing electrical work then the claimant must be the holder of an appropriate electrical contractor licence.

For the performance of professional engineering services then those works must be carried out under the supervision of a practicing professional engineer under the PEA.