A Queensland Supreme Court Judge decided last week that
subcontractors and contractors undertaking work on mining leases in
Queensland, where the lease is granted under the Mining
Resources Act 1989 (Qld), cannot use the Payment Claim system
under the Building and Construction Industry Payments Act
2004 (Qld) (BCIPA) to enforce payment.
For subcontractors and contractors working in Queensland's
mining industry, this is a most unwelcome decision.
Decision defeats purpose of BCIPA
When the various State Governments introduced Payment Claims
legislation like BCIPA in Queensland, one of the main purposes of
doing so was to free up the flow of cash in the building and
construction industry and to rein in the practice of parties
refusing to pay as a tactic to force others to accept less than
they should receive.
The legislation has been very successful in achieving this. This
decision however, will adversely affect that objective being
achieved for contractor and subcontractor clients working on mine
sites and probably gas fields.
A question of "land"
For clients to be entitled to deliver a Payment Claim and
otherwise pursue their rights to be paid for building and
construction work under BCIPA, that work must form part of
Justice Wilson, in the Agri-power Australia Ltd – v
– J and D Rigging Pty Ltd decision of last week, found
that mining leases granted under the Mineral Resources Act in
Queensland do not create "an interest in land" and that
mining leases are not "land" for the purpose of
It follows that construction work on a mining lease for purposes
of or associated with the mining lease, is not "construction
work" under BCIPA, and hence clients can not deliver Payment
Claims, use the adjudication process or stop work for non-payment
using that Act as the lawful basis to do so.
It seems to the author however, that Her Honour's
interpretation is strained and that land is land and does not cease
to be land simply because the Crown grants a leasehold interest
over it, whether that be for mining or other purposes. That said,
the case is currently binding, at least in Queensland.
Likely to affect gas-fields too
Given Her Honour's reasoning, it is quite likely that this
case will be held up as the basis upon which to find that BCIPA can
not be used by clients to recover payment for doing construction
work on land under a petroleum lease either.
So those contractors and subcontractors with work on gas fields
are also likely to be hit.
Painting, cleaning and soil testing not affected
The decision seems unlikely to affect painting, or cleaning of
buildings on mining or petroleum leases or testing of soils and
road making materials.
Not just Queensland
The Act in New South Wales is almost identical to BCIPA so
clients doing work in that state are likely to find this case will
also apply there. It is also likely to have ramifications in the
other jurisdictions too.
Appeal possible but legislation likely to be needed
The decision could still be appealed and if it is, we will let
you know. However, we believe that legislation is the key as
Justice Wilson's reasoning in the judgement has a certain logic
to it which may make the decision difficult to appeal.
It is to be hoped that each of the industry associations
representing subcontractors and contractors, pressures the
Government in Queensland to amend BCIPA to overcome the problems
this case has exposed. Such representations may also be warranted
in the other states.
What to do for your clients
If you have clients in the building and construction industry
who are working on a mining lease or petroleum lease please feel
free to forward this Newsletter to them.
If you would prefer to incorporate it into your own newsletter
please feel free to do so but please let us see the draft
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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