2022 - articles & insights

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Electronic execution of documents by companies

The Corporations Amendment (Meetings and Documents) Bill 2021 (Cth) (Amendment Act) was given royal assent on 22 February 2022 and has now come into force. The Amendment Act has amended the Corporations Act 2001 (Cth) (Corporations Act) and builds on the temporary measures introduced last year by the Treasury Laws Amendment (2021 Measures No.1) Act …
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Queensland project trust accounts

Since its introduction in 2020, the Queensland construction industry has been adapting to the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (Qld) (‘BIFOLA’). One of the most significant amendments made by BIFOLA is the introduction of the new trust account framework to replace the previous project bank accounts. The introduction …
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Execution by Strata Bodies

Different strata bodies are formed in different ways under the NSW strata law and have different powers and functions under the relevant instruments. This article aims to set out the various considerations in relation to execution by strata bodies and also highlights the best practice in achieving validly executed documents with the relevant parties. Owners …
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SOPA & statutory demands

There has been some confusion about whether debts which arise under Building and Construction Industry Security of Payment Act 1999 (NSW) (the SOPA) can be enforced using a statutory demand. In Grandview Ausbuilder Pty Ltd v Budget Demolitions Pty Ltd [2019] NSWCA 60 (Grandview v Budget), the NSW Court of Appeal held that all debts …
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Jin Yi Construction Pty Ltd v Romeciti Eastwood Pty Ltd [2022] NSWSC 56

When is a purchaser in an off the plan sale entitled to terminate its contract? The Supreme Court of NSW declared earlier this year in Jin Yi Construction Pty Ltd v Romeciti Eastwood Pty Ltd [2022] NSWSC 56 that the purchaser of a commercial strata unit was entitled to rescind the contract, and ordered the …
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Rise and Fall Clauses in Construction Contracts

Rise and fall clauses have been largely overlooked in the Australian construction industry for over two decades. Interest has picked up in recent months due to rapid increases in materials prices. As we re-enter an inflationary environment, legal practitioners and Contractors should learn about or refresh their knowledge of rise and fall clauses and consider …
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Modern slavery obligations: a Commonwealth and NSW perspective

Background On 1 January 2019, the Modern Slavery Act 2018 (Cth) (“Commonwealth Act”) came into effect and established a national modern slavery reporting requirement. However, this Commonwealth Act had two key inconsistencies in the reporting requirements with the Modern Slavery Act 2018 (NSW) (“NSW Act”) as follows: the NSW Act reporting threshold was initially $50 …
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You’re dismissed…or maybe not: when a demotion may not amount to a dismissal

In a recent decision, the Fair Work Commission Full Bench (FWCFB), in considering the meaning of “dismissal” under section 386 of the Fair Work Act 2009 (Cth) (FW Act), has found that a 10% salary reduction did not amount to a dismissal. Following an investigation into allegations of misconduct, NSW Trains took disciplinary action against …
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Dealing with ipso-facto clauses and step in rights in construction insolvencies

Security of Payments

What you need to know The construction industry is currently experiencing a high number of insolvencies. Various moratoria arise on a builder entering into external administration which can impact upon the rights that can be exercised by developers, sub-contractors and suppliers. Amongst other restrictions, this includes prohibitions on counterparties taking advantage of ipso facto clauses …
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Case Note: Equa Building Services Pty Ltd v A&H Floors 2 Doors Australia Pty Ltd [2022] NSWSC 152

The recent Supreme Court decision in Equa Building Services Pty Ltd v A&H Floors 2 Doors Australia Pty Ltd [2022] NSWSC 152 (Equa) has re-emphasised the importance of strict compliance with the provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act). In particular: contractors and subcontractors must ensure that construction …
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Tranche II Building Reform Proposals

The NSW Government has tabled proposed amendments to key construction laws, including the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) and the Design and Building Practitioners Act 2020 (NSW) (DBPA), which it refers to as the Tranche II building reforms. On Wednesday 23 February 2022, a roundtable discussion between the NSW …
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The addition of absolute discretion in EOT clauses – No notices – no extensions of time

The New South Wales Supreme Court’s decision in Growthbuilt Pty Ltd v Modern Touch Marble & Granite Pty Ltd [2021] NSWSC 290 (Growthbuilt) has extremely significant implications regarding extension of time (EOT) clauses. Contractors and legal practitioners must take note of this momentous decision. Implications for contractors The key takeaway from Growthbuilt is that a …
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Employee or Contractor?: the High Court decides

The High Court of Australia (HCA) handed down two major decisions that highlight the importance of getting contractual terms correct and how those terms can determine the nature of the relationship. In the two decisions, the HCA makes clear that where the terms of the parties’ relationship are comprehensively committed to a written contract, (and …
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Payment Schedules Must Contain Proper Reasons to Withhold Payment

It is tempting to respond in a Payment Schedule with the words “pending”, “insufficient information“ or  “we will not pay your claim until all works are finished”. However, these types of unsubstantiated reasons will not work. In the NSW Supreme Court of Appeal case, Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA …
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Security Of Payment Act: work within 12 months a matter for the adjudicator

Under the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act), unless the contract provides otherwise, a payment claim may only be made within 12 months after the work to which the claim relates was last carried out (section 13(4)(b)). In EQ Constructions Pty Ltd v A-Civil Aust Pty Ltd [2021] NSWSC 1604; …
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I can manage myself – A lesson in bullying and performance management

The Fair Work Commission (FWC) has rejected an employee’s application for anti-bullying orders, after finding the employee had, on occasions, been “blatantly misogynistic”. The employee, who began reporting to his female supervisor last year, was put on a performance improvement plan (PIP) by the supervisor, following concerns about his performance, including missing targets, late starts …
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New changes to community land laws

The Community Land Development Act 2021 (NSW) (Development Act) and Community Land Management Act 2021 (NSW) (Management Act) reforms have commenced on 1 December 2021. The new laws are aimed to modernise the development, management and operation of community schemes in NSW. See below brief introduction on community schemes and summary on the key legislative …
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Decennial Liability Insurance

After a spate of issues plaguing the building and construction industry in recent years, the NSW government is proposing the introduction of a decennial liability insurance scheme (DLI) with the view of increasing protections for owners and purchasers of residential apartments. What is DLI? DLI is a mandatory defects insurance scheme which affords purchasers of …
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