This is the question being asked following a Queensland Supreme Court decision last week. The answer itself is not clear.
The Court held that certain construction work carried out on a mining lease was not subject to the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA).
Outline of the case
A contractor was contracted to dismantle a mining plant situated on land which was the subject of a mining lease and transport it to another location. The client was the holder of the mining lease. A payment claim proceeded to adjudication and a substantial sum was awarded to the contractor.
The client challenged the adjudication decision, and the Supreme Court found that ‘land’ under BCIPA meant a legal interest in land. As mining leases do not create a legal interest in land, the Court concluded that the construction work did not take place on ‘land’. As such, the plant and its dismantling were not ‘construction work’ for the purposes of BCIPA, and the contractor’s payment claim was invalid.
What does this mean for the mining industry?
It is not correct to state that this decision exempts the mining industry from BCIPA.
BCIPA already contains a mining exclusion which is concerned with the drilling or extraction of oil or natural gas, and the extraction of minerals. The Court of Appeal has previously considered the mining exclusion and had found that it was to be narrowly applied so that most construction work in mining was subject to BCIPA. This recent decision did not address, in any detail, this exclusion or how it will apply in the future.
It is unclear as to the extent of work covered by this decision. It is now arguable that as BCIPA only applies to construction work on land, and a mining lease specifically does not create an interest in land, then all construction work for the purposes of the lease is not covered by BCIPA. The decision however may not apply to construction work which remains on the land at the end of the mining lease or which is not directly related to the mining purposes. Similarly, it will be important to assess the terms of each mining lease on a case by case basis.
Further, the decision may not be followed or may be limited to its facts.
Until there is greater clarity, contractors should still make payment claims to preserve their rights under BCIPA. Respondents should look to use the decision in any response to a claim.
We will be closely monitoring, and will keep you informed of, any future developments regarding this case.
Troy Lewis, Partner
T: +61 7 3135 0614
Stephen Burton, Partner
T: +61 7 3135 0604
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