Key Points:
Western Australian legislation is worded differently to Queensland's, making a similar decision less likely.
A recent Queensland Supreme Court decision could mean that construction work carried out on a mining lease is not subject to the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA). Would the same apply in Western Australia?
The meaning of construction work in the BCIPA
In Agripower Australia Ltd v J&D Rigging Pty Ltd [2013] QSC 164 it was determined that a contract for the dismantling of mining plant that had been brought onto site for the purposes of a mining lease was not a contract for "construction work" within the meaning of the BCIPA.
This was because the mining plant to be dismantled was not "forming, or to form, part of land" as required by the BCIPA (at section 10(1)(a) and (b)) – it was:
- only on the land for the purposes of a mining lease, which is a right to extract minerals, so it did not form land or part of land because a mining lease was not an interest in land; and
- not permanent and was only affixed to the land for the purposes of stabilising or allowing the efficient operation of the mining plant, so it did not form part of land.
The Queensland and WA Interpretation Acts
With regard to the first reason identified above, the court adopted the definition of "land" set out in the Acts Interpretation Act 1954 (Qld). That definition is as follows:
"land includes messuages, tenements and hereditaments, corporeal and incorporeal, of any tenure or description, and whatever may be the interest in land".
This definition was held by the court in Agripower to only include interests in land and did not include land in its ordinary common law meaning, being the surface of the earth and all things affixed to it including buildings and structures.
The position may be different in Western Australia, however, because the Interpretation Act 1984 (WA) defines land as the following:
"land includes buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in or over land".
By referring to buildings and structures (and land covered by water) this definition includes land in its physical sense, referring to more than legal interests in land.
Comparison of the BCIPA and the Construction Contracts Act 2004 (WA)
The definition of construction works at section 4(2) of the Construction Contracts Act (CCA) is similar to the definition of construction works in the BCIPA in that it includes the following:
"(c) constructing the whole or a part of any civil works, or a building or structure, that forms or will form, whether permanently or not and whether in WA or not, part of land or the sea bed whether above or below it;" [emphasis added].
It is likely, in our view, that the following characteristics of the definition of construction work in the CCA distinguish it from the BCIPA and clarify that the use of the word "land" includes land in the physical, common law, sense, not only a legal interest in land:
- The definition of construction work (at section 4(2)(a)) includes a reference to: "reclaiming, draining, or preventing the subsidence, movement or erosion of, land".
In that context, the word "land" is clearly used in its physical sense;
- As identified above, part of the definition of construction work refers to "...part of land or the sea bed...".
The reference to the sea bed, which is a physical thing, not a legal right, indicates that the preceding reference to the word "land" is also a reference to a physical thing and not a legal right; and
- The CCA provides that construction work must be something that forms or will form part of land "...whether in WA or not...".
These words relate to components constructed in Western Australia but installed elsewhere. It would be very surprising if they were meant to impose a requirement that parties would have to ascertain whether or not a modular component constructed in Western Australia was to form something that, when finally installed outside Western Australia, was, according to the law of that place, something that formed an interest in land.
Other considerations specific to the CCA
An issue that the court in Queensland was not required to consider, as a court in Western Australia would be, is whether the plant in question would have been covered by the exclusion, under the CCA, of the following from the definition of construction works:
"constructing 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".
It should be noted, however, that this exclusion only relates to the "constructing" of such plant.
It is not immediately apparent what the policy rationale behind excluding the constructing of such plant but not the dismantling, demolishing, removing, altering, repairing, restoring, maintaining and extending of such plant was. These activities are all specifically included in the definition of construction works by operation of the CCA.
Conclusion
Differences in the wording of the Western Australian legislation make it less likely that a court there would apply the rationale of Agripower to find that the CCA does not apply to construction work carried out on a mining tenement.
Before challenging the applicability of the security of payment or construction contracts legislation to construction work that is on land subject to a mining lease, parties should carefully consider the precise wording of each State or Territory's legislation.
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
