Agripower Australia Ltd v J & D Rigging Pty Ltd [2013] QSC 164

Senior Associate, Juniper Watson examines a Queensland Supreme Court decision where it was found that the Building and Construction Industry Payments Act 2004 (Qld) did not apply to a claim arising from a contract for the dismantling of plant on land the subject of a mining lease, a decision based not on the mining exclusion within that Act, but on the Act’s definition of construction work. All states have similar legislation.

Section 10 of the Qld Act defines construction work by way of reference to buildings, structures or works "forming, or to form, part of land". The word land is not defined in the Act and yet its meaning is critical to the breadth of the concept of construction work and thereby the reach of the Act in its application to construction contracts. Her Honour held that there was no intention under the Act to displace the concept of land as it existed either at common law or pursuant to the Acts Interpretation Act 1954 (Qld). The reference in the Act to structures being able to form part of land "whether permanent or not" was viewed as an "indicator of consistency" with the common law concept of land rather than departing from it.

This meant that the common law distinction between chattels (moveable assets) and fixtures (part of land) was to be considered in order to determine whether the mining plant to be removed formed part of the land. The objective intention at the time that plant is affixed – including the purpose and degree of annexation, is relevant to whether plant becomes a fixture, or remains a chattel.

In this case the plant had been erected and used pursuant to, and was required to be removed upon expiry of, a mining tenement. It was critical that the mining tenement did not create ownership rights in the relevant real property. As a result the plant was never intended to be permanent. It was for this reason that the plant never became a fixture and therefore its removal could not be considered construction work for the purposes of the Act.

This decision has potentially wide-reaching implications for the mining industry. Contracts for work that may otherwise have been considered to be construction work will need to be carefully considered where the relevant land access rights are limited to mining tenements. Based on this case, in such circumstances the Act is not likely to apply. While that may be seen as a boon to the mining industry in the short term, in the event that it leads to contractors going out of business while awaiting payment on legitimate claims this is likely to lead to a reduction in competition in the market.