COVID-19 – Why you need an expert Construction Lawyer during this pandemic

As the world continues to grapple with this novel strain of Coronavirus (COVID-19), it is important that you remain vigilant and informed of the various legislative obligations that may apply to you as a participant in the construction industry in Queensland. In order to remain compliant and profitable throughout this pandemic, we encourage you to make sensible and innovative decisions in regard to your business.

The building industry in Queensland is governed by a variety of laws, codes and standards.  This legislative framework is designed to facilitate the flow of cash down the supply chain, to regulate the construction of new buildings and dwellings, and provide appropriate protections for the various stakeholders in the industry.

Listed below are the codes and legislation that will be discussed in this article:

• Building Act 1975;
• Building Code of Australia;
• Queensland Development Code;
• Building Regulation 2006 and Building Fire Safety Regulation 2008;
• National Construction Code and the Plumbing Code of Australia;
• Building Industry Fairness (Security of Payment) Act 2017;
• Queensland Building and Construction Commission Act 1991; and
• Work Health and Safety Act 2011 and the Work Health and Safety Regulation 2011.

 Building Act 1975

The Building Act 1975 (the Act) stipulates minimum standards for the design and construction of all new building work in Queensland, including, but not limited to: assessable development or accepted development under the Planning Act; building development applications; inspection standards for particular buildings and BCA classification or use changes; and provisions relating to building demolition. Licensees, building professionals and the community generally are affected by this legislation.

Relevantly, the Act provides that buildings must be constructed in accordance with the Building Code of Australia (BCA), and, conversely, where Queensland specific standards apply, the Queensland Development Code (QDC). The Act makes helpful reference to the performance requirement dichotomy. In short, building work complies with the BCA or QDC (the Code) only if it complies with all relevant requirements under the Code.

Without getting into the intricacies, here is a summary of the performance requirement dichotomy:

A relevant building solution is achieved for a performance requirement only by complying with the following (relevant requirement) –

• if the code is the BCA – the relevant deemed-to-satisfy provisions under the BCA for the performance requirement;
• if the code is the QDC – the relevant acceptable solution under the QDC for the performance requirement;
• an alternative solution that complies with the performance requirement, or is shown to be equivalent to the relevant requirement; or
• a combination of (i) and (ii).

The Act is also supported by the Building Regulation 2006 and Building Fire Safety Regulation 2008 and mandates a series of approved forms (associated documents) that are to be completed when carrying out building work in Queensland.

The BCA aims to achieve a uniform set of technical standards for the design and construction of buildings through the National Construction Code (NCC). The NCC is an amalgamation of the BCA and the Plumbing Code of Australia. The NCC mandates technical standards for building work or plumbing and drainage installations. This regulatory framework is constantly evolving as building methods and technology evolve, and the legal landscape responds to disputes.

Building Industry Fairness (Security of Payment) Act 2017 (BIF Act)

On 17 December 2018, the Building and Construction Industry Payments Act 2004, commonly referred to as BCIPA, was replaced by Chapter 3 of the BIF Act. Similarly, in other parts of the country, the BIF Act prescribes the framework for the application and operation of progress payments. For anyone that may not be familiar with progress payments, they are the process of exchanging a written request for payment, usually by a builder to a principal, that ensures the flow of cash down the supply chain.

In practical effect, the builder (referred to as the ‘claimant’) will prepare a written request for payment that identifies the construction work or related goods and services to which the progress payment relates, and the amount that the claimant claims is payable (claimed amount) known as a ‘payment claim’. The claimant will provide the payment claim to the principal (referred to as the ‘respondent’) for certification. Upon receipt of the payment claim, the respondent responds with a written document called a ‘payment schedule’ that states the amount, if any, that it proposes to make (scheduled amount). In the event of a payment dispute, for example the scheduled amount is less than the claimed amount, the parties can utilise the streamline services of an adjudication to resolve the payment dispute.

It is important to bear in mind a few notable changes introduced by the BIF Act. These include:

• the claimant does not need to notify the respondent that it intends to proceed to adjudication;
• there is no ability to issue an adjudication response if the dispute proceeds to adjudication and no payment schedule was issued, nor can the respondent raise new reasons for withholding payment that were not included in the payment schedule;
• there is no longer any need to endorse the payment claim with the governing legislation i.e., ‘BIF Act’. A written document bearing the word ‘invoice’ is taken to satisfy the BIF Act; 
• if a construction contract is terminated, and the contract does not provide for, or purports to prevent a reference date surviving termination, the final reference date for the contract is the date the contract is terminated;
• pecuniary penalties apply, and disciplinary action can be taken under the Queensland Building and Construction Commission Act 1991 (QBCC Act) for a failure to give a payment schedule as required under the BIF Act;
• timeframes for submitting a payment schedule have been extended to whichever of the following periods ends first:

1. the period, if any, worked out under the construction contract, within which the respondent must give the payment schedule; or
2. 15 business days after the payment claim is given to the respondent.

The BIF Act also contains provisions in relation to Project Bank Accounts, Subcontractors’ Charges and introduces amendments to the QBCC Act.

Queensland Building and Construction Commission Act 1991

The QBCC Act is the primary legislation regulating Queensland’s building industry. In essence, the QBCC Act aims to provide remedies for defective building work, establishes a quasi-government body (otherwise known as the Queensland Building and Construction Commission (QBCC)) to administer the functions of the QBCC Act, and establishes a licencing regime for contractors performing building work over the value of $3,300. In addition, the statutory insurance scheme provides protection to consumers affected by incomplete or defective residential construction work. The scheme is administered by the QBCC.

For building contracts other than domestic building contracts, the QBCC Act Part 4A sets out a number of notable provisions, including, but are not limited to:

• regularises retention amounts for a building contract;
• provides helpful guidance on the form that a building contract is to take (in writing depending on the value of the subject building work);
• establishes a statutory defects liability period of 12 months starting on the day of practical completion of the contract; and
• the contracted party’s right to suspend building work, the subject of the building contract, if the contracting party has not complied with an order of a court or the tribunal given in favour of the contracting party, or the amount is not paid.

Not dissimilar to the BIF Act, non-compliance with the QBCC Act can attract pecuniary penalties, and in some cases, imprisonment.

The Queensland Building and Construction Commission Regulation 2018 provides helpful guidance to contractors in regard to licences and the various classes and expands on the circumstances of incomplete or defective residential construction work, among others.

Work health and safety legislation

Work health and safety legislation is a unique practice area and it is not the intention of this article to explore this area at any great length. However, it is important to note the key pieces of legislation that may apply to your workplace. These include the Work Health and Safety Act 2011 (WHS Act) and the Work Health and Safety Regulation 2011.

The WHS Act provides a benchmark for work health and safety standards, provides a definition of asbestos in particular legislation, prescribes a work health and safety levy, and amends the Workers’ Compensation and Rehabilitation Act 2003 for particular purposes. Those persons captured by the WHS Act include:

• employees;
• subcontractors;
• an apprentice or trainee;
• volunteers;
• an employee of a labour hire company who has been assigned to work in the person’s business or undertaking; and
• the person conducting the business or undertaking (usually employer) if the person is an individual who carries out work.

The Work Safe website provides useful guidance on the safety measures you should take as an employer to protect your workers in response to COVID-19.

Conclusion

In these uncertain times of economic downturn, and a global health pandemic, we encourage sub-contractors, contractors, principals, builders, owner builders, developers and individuals to contact our team of experienced building and construction lawyers for practical, sensible and innovative solutions for your business.