A recent Queensland Court of Appeal decision in Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd, deals with the application of the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) to the mining and resources sector.

In an update earlier this year, we advised that the Supreme Court rejected an argument that the works performed by Warren was within BCIPA’s mining exclusion because the works were necessary to the coal mining process and was therefore part of the extraction of coal.

Warren’s work included stripping topsoil and scrub with scrapers and dozers, removing subsoil and overburden down to a coal seam, and implementing water management measures to ensure the pit did not fill with water.

The Supreme Court held that the work was not within BCIPA’s mining exclusion as the work was:

  1. too remote in place (coal was never to be extracted from the land which contained the dams and drains);
  2. too remote in time (the dams and drains were built before any major digging occurred and had to be in place to permit the excavation to proceed);
  3. the plant and machinery used by Warren was very different from the machinery used for the extraction of coal; and
  4. much of Warren’s work was carried out for intermediate purposes or purposes collateral to the extraction of coal.

The Court of Appeal affirmed the Supreme Court’s decision, also finding that BCIPA’s mining exclusion did not apply to work done for the purpose of opening a mine or preparatory to that purpose, or work ancillary to the extraction of coal.  The Court held that the focus of the section was much more limited and restricted.

Conclusion

If you are in the mining and resources sector you need to review your contracts to ensure you have maximum protection against BCIPA claims or to prevent your rights under BCIPA being restricted.  It is also important you are aware of the possible application of BCIPA to receiving and making payment in connection with construction work in the mining and resource sector.