A Queensland Supreme Court judgment delivered on 25 June 2013 has found that the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”) does not apply to work carried out on land the subject of a mining lease.

Facts

The first respondent, J&D Rigging Pty Ltd (“J&D”), was appointed by the current holder of a mining lease as operator of the Skardon River Mine. The appointment allowed J&D to dismantle the mining plant installed on the land the subject of the mining leases. The mining plant consisted of a 300 tonne kiln, 10 metre high mixing tanks, 6 metre high sheds and 12 metre high storage bins. The mining plant was attached to the land by (amongst other things) concrete footing and slabs.

The applicant, Agripower Australia Ltd (“Agripower”) purchased the mining plant and entered into a contract with J&D  (“Contract”) for the dismantling and removal of the mining plant. J&D subsequently delivered a payment claim to Agripower pursuant to BCIPA. In an adjudication determination, Agripower was ordered to pay J&D an amount of $2,513,705.37.

Agripower commenced proceedings seeking a declaration that the adjudication decision was void on the basis that the work under the Contract was not “construction work” within the meaning of section 10 of BCIPA.

Decision

The judge determined that whether the Contract was for “construction work” turned on whether the mining plant consisted of structures or works “forming part of the land” within the meaning of sections 10(1)(a) and (b) of BCIPA.

The judge held that mining leases are not “land” for the purposes of section 10(1) of BCIPA as mining leases do not give rise to an estate or interest in the land over which they are granted. The mining leases simply allow the leaseholder to remove minerals and to carry out mining activities. They are not “land” at common law or pursuant to the Acts Interpretation Act 1954 (Qld) and  there is nothing in BCIPA to displace the meaning of “land” under that Act or at common law.

The judge went on to say that the mining plant did not form part of the land as it was brought on to the land for the purpose of the mining leases and it had to be removed on expiry of the mining leases. The judge recognised that most of the plant was affixed to the land, but found that this was simply to stabilise the mining plant rather than to add an additional feature to the land.  The mining plant therefore may have formed part of the mining leases but it did not form part of the land within the meaning of section 10(1) of BCIPA.

As a result the Court determined that dismantling the mining plant was not “construction work” under a “construction contract” for the purposes of BCIPA and declared the adjudication decision void for want of jurisdiction.

Implications

The Court’s decision will have wide ranging implications for the construction and resource industry. In particular, it will mean that:

  • any work carried out on a mining lease will not constitute “construction work” for the purposes of section 10(1);
  • given the nature of the works carried out by J&D, it will be difficult to distinguish the Agripower decision on the grounds that the works were insubstantial or were not connected to the ground;
  • authorised work carried out on a petroleum authority under the Petroleum and Gas (Production and Safety) Act 2004 (Qld) (“P&G Act”) is likely to be subject to the same analysis applied in the Agripower decision as the P&G Act requires an authority holder to remove equipment or improvements on land prior to the expiry of the petroleum authority; and
  • the construction of a pipeline on a petroleum tenure or pipeline licence may not constitute “construction work” for the purposes of BCIPA as the pipeline remains the personal property of the holder of the petroleum tenure or pipeline licence despite the pipeline having become part of the land.

It will be interesting to see whether the decision is appealed.