On 25 June 2013, Justice Wilson of the Supreme Court of Queensland delivered her decision in Agripower Australia Ltd v J&D Rigging Pty Ltd & Others [2013] QSC, holding that the Building and Construction Industry Payments Act 2004 (Qld) (Qld Act) does not apply to construction work carried out on mining leases.

The Queensland decision

The issue before the Court was whether the dismantling and removal of mine plant situated on land the subject of a mining lease constituted 'construction work' within the meaning of section 10 of the Qld Act. Based on a technical analysis, Her Honour found that:

  • 'land' in section 10 of the Qld Act does not include mining leases; and
  • the plant did not 'form part of land' within the meaning of section 10 of the Qld Act.

It followed from this reasoning that the dismantling and removal of the plant was not 'construction work' under a 'construction contract' and therefore that the Qld Act did not apply. This decision has significant consequences for the Queensland mining and construction industries which have been operating under the assumption that the Qld Act applies equally to construction work on mining and petroleum leases. Subject to appeal, on the basis of Agripower, any contracts for construction work to be carried out on a mining lease in Queensland will not be covered by the Qld Act. This sets a significant legal precedent in Queensland.

Will it apply in WA?

However, for the reasons identified below, our view is that the approach in Agripower may not be followed in Western Australia.

  1. The Qld Act, while similar, is, in important respects, different to the Construction Contracts Act 2004 (WA) (WA Act) which adopts a different definition of “construction work”.
  2. Unlike the Qld Act, the WA Act excludes from the definition of 'construction work', the construction of 'any plant for the purposes of extracting or processing oil, natural gas or any derivative of natural gas, or any mineral bearing or other substance'. This indicates that the WA Act contemplates construction work on mining leases, as typically such plants, in respect of hard-rock mining, would be constructed on a mining lease.
  3. Her Honour did not place much weight on the remedial nature of the Qld Act. However, there is support in Western Australia that the WA Act is remedial in nature and, accordingly should be given, according to the High Court, a 'fair, large and liberal' interpretation.

A Western Australian Court could find that, given the remedial nature of the WA Act, the definition of 'land' in 'construction work' should be given a wide enough meaning to include mining leases.

Accordingly, until there is a decision of the Supreme Court of Western Australia parties to construction contracts should behave conservatively and operate on the assumption that the WA Act applies to construction work on mining leases.