Cadia Holdings Pty Ltd v Downer EDI Mining Pty Ltd

[2020] NSWSC 1588

Supreme Court

New South Wales

Medium Neutral Citation:

Cadia Holdings Pty Ltd v Downer EDI Mining Pty Ltd [2020] NSWSC 1588

Hearing dates:

27 and 28 October 2020; further written submissions 2 and 6 November 2020

Date of orders:

11 November 2020

Decision date:

11 November 2020

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Challenge to adjudication determination fails; summons to be dismissed

Catchwords:

BUILDING AND CONSTRUCTION – whether adjudication determination under the Building and Construction Industry Security of Payment Act 1999 should be quashed – the mining exception in the Act – whether contract between the parties was a construction contract – whether work called for by contract was for tunnelling or boring or the constructing of underground words for the purpose of extraction of minerals – whether any work called for under the contract was construction work

BUILDING AND CONSTRUCTION – whether adjudication determination under the Building and Construction Industry Security of Payment Act 1989 should be quashed – reference dates – whether payment claim served before a reference date arose – whether there was an available reference date

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999 (NSW)

Building and Construction Industry (Security of Payment) Bill 2020 (WA)

Cases Cited:

Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41

Capricorn Quarries Pty Ltd v Inline Communications Construction Pty Ltd [2013] 2 QD R 1; [2012] QSC 388

Corporate Affairs Commission (SA) v Australian Central Credit Union (1985) 157 CLR 201; [1985] HCA 64

Curran v Thomas Borthwicks and Sons Ltd (1990) 26 FCR 241; [1990] FCA 75

Edelbrand Pty Ltd v HM Australia Holdings Pty Ltd [2012] NSWCA 31

HM Hire Pty Limited v National Plant and Equipment Pty Ltd [2012] QSC 4

In the matter of Jimmy’s Recipe Pty Ltd (No 2) [2020] NSWSC 632

IW v The City of Perth (1997) 191 CLR 1; [1997] HCA 30

Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622; [1984] HCA 55

Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4

Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23

Sandhurst Holdings (Australia) Limited v Commissioner of State Revenue (2009) 25 VR 59; [2009] VSCA 167

Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 95 NSWLR 157; [2016] NSWCA 379

Smith v Coastivity Pty Ltd [2008] NSWSC 313

Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52

Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2011] QSC 345

Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2013] 2 Qd R 75; [2012] QCA 276

Wilson v State Rail Authority (NSW) (2010) 78 NSWLR 704; [2010] NSWCA 198

Texts Cited:

P Herzfeld and T Prince Interpretation (2nd ed, 2020, Thomson Reuters)

Category:

Principal judgment

Parties:

Cadia Holdings Pty Ltd (Plaintiff)
Downer EDI Mining Pty Ltd (First Defendant)
Doron Rivlin (Second Defendant)
Adjudicate Today Pty Ltd (Third Defendant)

Representation:

Counsel:
L Shipway (Plaintiff)
D Hume (First Defendant)

Solicitors:
Allens (Plaintiff)
MinterEllison (First Defendant)
King Lawyers (Second and Third Defendants)

File Number(s):

2020/202530

Judgment

1. The plaintiff, Cadia Holdings Pty Ltd, a wholly owned subsidiary of Newcrest Mining Ltd, operates the Cadia East underground panel cave mine (“the Mine”) in the Cadia Valley, some 25 kilometres south-west of Orange. The Mine is the largest underground mine in Australia and contains deposits of gold, silver, copper and molybdenum.

2. On 16 November 2018, Cadia and the defendant, Downer EDI Mining Pty Ltd, entered a “Works Contract” (“the Contract”) described as being “For the Provision of Lateral Development Works” at the Mine.

3. On 22 June 2020, an adjudicator appointed under s 19 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”) determined that Cadia pay Downer $1,017,741.72.

4. Cadia seeks to challenge that determination on two bases.

5. The first is that the Contract was not a “construction contract” for the purposes of the Act. The basis on which this contention is advanced is that the work performed by Downer under the Contract was not “construction work” within the meaning of s 5 of the Act by reason of what the parties referred to as the “Mining Exception” in s 5(2)(b) of the Act. The Mining Exception, set out below at [17], is to the effect that work is not “construction work” if it is for the extraction of minerals or involves tunnelling, boring or construction work for that purpose.

6. The second is that the payment claim that Downer served on Cadia pursuant to s 13 of the Act was not in respect of an available reference date for the purposes of s 8 of the Act.

Decision

7. The Mining Exception is not engaged because the work called for by the Contract was not “for the purpose of” extraction of minerals.

8. In any event, as the Contract called for some work which was “construction work” within the meaning of s 5(1) of the Act, the Contract as a whole was a “construction contract” for the purpose of the Act.

9. At the date Downer served the payment claim, there was an available reference date.

10. The challenge to the adjudicator’s determination fails. The summons should be dismissed.

The scheme of the Act

11. It is common ground that the existence of a “construction contract” for the purposes of the Act is a jurisdictional fact necessary for an adjudicator to be able to make a determination under the Act.

12. Section 8 of the Act deals with the right to of a contractor to make progress claims.

13. At the relevant time,[1] s 8(1) provided:

On and from each reference date under a construction contract, a person:

(a)    who has undertaken to carry out construction work under the contract, or

(b)    who has undertaken to supply related goods and services under the contract,

is entitled to a progress payment.

1. It is common ground that the applicable version of the Act is the historical version for 27 June 2017 to 20 October 2019.

14. “Construction Contract” is defined in s 4 of the Act as follows:

4 Definitions

… a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party.

15. It is common ground that, by reason of this definition, in order for Cadia to establish that the Contract was not a “construction contract” it must show that none of Downer’s undertakings under the Contract was an undertaking “to carry out construction work, or to supply related goods and services” for Cadia. To put that another way, a contract will be a “construction contract” for the purpose of the Act if any of the undertakings within it is to carry out construction work. [2]

    2. Eg Smith v Coastivity Pty Ltd [2008] NSWSC 313 at [34]-[35] (McDougall J) approved in Edelbrand Pty Ltd v HM Australia Holdings Pty Ltd [2012] NSWCA 31 at [28]-[32] (Bathurst CJ, McColl JA and Tobias AJA agreeing); and Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd (2013) 2 Qd R 75; [2012] QCA 276 (“Thiess (CofA)”) at [56] (Philippides J; Holmes and White JJA relevantly agreeing).

16. “Construction Work” is, relevantly, defined in s 5(1) as follows:

5 Definition of “construction work”

(1)   In this Act, construction work means any of the following work—

(a)   the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures forming, or to form, part of land (whether permanent or not),

(b)    the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage or coast protection,

(c)   the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems,

…

(e)    any operation which forms an integral part of, or is preparatory to or is for rendering complete, work of the kind referred to in paragraph (a), (b) or (c), including—

(i)    site clearance, earth-moving, excavation, tunnelling and boring, and

(ii)    the laying of foundations, and

(iii)    the erection, maintenance or dismantling of scaffolding, and

(iv)    the prefabrication of components to form part of any building, structure or works, whether carried out on-site or off-site, and

(v)    site restoration, landscaping and the provision of roadways and other access works…

17. The Mining Exception is contained in s 5(2) these terms:

(2)    Despite subsection (1), construction work does not include any of the following work—

…

(b)   the extraction (whether by underground or surface working) of minerals, including tunnelling or boring, or constructing underground works, for that purpose…

18. Section 6 defines “related goods and services”, relevantly, as:

6 Definition of “related goods and services”

(1)    In this Act, related goods and services, in relation to construction work, means any of the following goods and services—

(a)    goods of the following kind—

…

(ii)    plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work,

(b)    services of the following kind—

(i)    the provision of labour to carry out construction work,

(ii)    … design … services in relation to construction work…

Construction of provisions in the Act – general principles

19. The object of the Act is set out in s 3(1):

3 Object of Act

The object of this Act is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services.

20. The object of the Act has also been described as to provide “a speedy and effective means of ensuring cash flow to builders from the parties with whom they contract”. [3] The Act was designed to “reform payment behaviour in the construction industry” by “stamp[ing] out the practice of developers and contractors delaying payment to subcontractors and suppliers”. [4]

    3. Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4 at [43] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

    4. Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52 at [3]-[4] (Kiefel, Bell, Gageler, Keane and Gordon JJ).

21. The Act is thus “remedial” in nature. [5]

    5. Eg Edelbrand Pty Ltd v HM Australia Holdings Pty Ltd [2012] NSWCA 31 at [29]-[30] (“Edelbrand”); also Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) (2016) 95 NSWLR 157; [2016] NSWCA 379 at [66] (Basten JA, with whom Bathurst CJ, Beazley P and Macfarlan and Leeming JJA agreed); cf the views expressed by Jackson J Capricorn Quarries Pty Ltd v Inline Communications Construction Pty Ltd; [2013] 2 QD R 1; [2012] QSC 388 at [40]-[47].

22. For that reason, and “within the confines of the actual language employed”, those provisions in the Act which are beneficial to those whose interests the Act is designed to promote (subcontractors) should be construed liberally, in the sense of in their favour. [6]

    6. Edelbrand at [30].

23. On the other hand, and again paying due regard to the words used in the Act, exceptions to such beneficial provisions should be construed narrowly because:

“Where an exception from a remedial or beneficial provision is susceptible of two constructions, the narrower construction may be preferred so as to give full operation to the remedial or beneficial provision.” [7]

7. P Herzfeld and T Prince Interpretation (2nd ed, 2020, Thomson Reuters) at [10.280].

24. Thus, as I set out below, the Mining Exception has been construed narrowly, that is favourably to the subcontractor, albeit in respect of an aspect of the Mining Exception not presently relevant.

The Mining Exception

25. There are no New South Wales cases construing the Mining Exception.

26. There was no mention of it in the Explanatory Note to the Bill which preceded the Act or in the Second Reading Speech.

27. There are sections to the same effect in the statutory analogues to the Act in Queensland, Victoria, South Australia, Tasmania and the Australian Capital Territory. The corresponding provisions in Western Australia and in the Northern Territory are materially different. [8]

    8. Western Australia is proposing to adopt the NSW model. The Building and Construction Industry (Security of Payment) Bill 2020 (WA) is currently before the Western Australian Parliament, and once in force, will narrow the Mining Exception in that State.

28. The only decisions dealing with those provisions are from Queensland, being the decision of Douglas J in HM Hire Pty Limited v National Plant and Equipment Pty Ltd [9] and of the Queensland Court of Appeal in Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [10] upholding the decision of Fryberg J. [11]

    9. [2012] QSC 4 (“HM Hire”).

    10. Thiess (CofA) (Philippides J; Holmes and White JJA relevantly agreeing).

    11. Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2011] QSC 345 (“Thiess”).

29. The Mining Exception directs attention first to the “extraction” of minerals (whether by underground or surface working). It is common ground before me that “extraction” should be given its usual meaning of removing, by effort or force. [12] I see no reason to adopt a different course.

    12. In Thiess, Fryberg J accepted that the Oxford English Dictionary and Macquarie Dictionary definitions were appropriate to be adopted in this context; cf the discussion in P Herzfeld and T Prince Interpretation (2nd ed, 2020, Thomson Reuters) at [20.40] and the observations of Leeming JA in In the matter of Jimmy’s Recipe Pty Ltd (No 2) [2020] NSWSC 632 at [39]-[41].

30. Then, by the use of the word “including”, the Mining Exception extends the ordinary meaning of “extraction” to “tunnelling or boring, or constructing underground works” for the purpose of extraction.

31. Thus, in Thiess, Fryberg J, in a passage approved by the Court of Appeal,[13] said:

“It is difficult to see how constructing underground works could ever amount to extracting in the ordinary sense of the word. The words seem intended to extend that ordinary sense. In my judgment the same must be true of the references to tunnelling and boring. Those activities might in some situations result in the extraction of mineral as an incidental consequence, but they should not be construed as limited to such situations. It is sufficient if they take place for the purpose of extraction; they need not themselves be methods of extraction. The effect of the inclusion is in my judgment to extend the meaning of extraction to activities which would not usually be within the meaning of the word.”[14]

13. Thiess (CofA) at [66].

14. At [45].

32. The Mining Exception refers to the “constructing” of underground works, rather than the “construction of” underground works. Neither party suggested that the proper construction of s 5 generally, or the Mining Exception in particular, turns on this distinction.

33. Indeed, as Mr Hume, who appeared for Downer, pointed out, substituting the word “constructing” for “the construction of” in the various subsections of s 5(1) would not affect their meaning.

34. Thus, the effect of the Mining Exception is to exclude from the definition of “construction work” the following works:

1. extraction (whether by underground or surface working) of minerals;

2. tunnelling or boring for the purpose of extraction (whether by underground or surface working) of minerals; and

3. constructing underground works for the purpose of extraction (whether by underground or surface working) of minerals.

35. As the critical question is whether the relevant contract is a “construction contract” for the purposes of the Act, attention must be directed to the work required by the contract[15] and the question of whether that work falls within one of the limbs set out at [34].

    15. Eg Smith v Coastivity Pty Ltd [2008] NSWSC 313 at [34] and Edelbrand Pty Ltd v HM Australia Holdings Pty Ltd [2012] NSWCA 31 at [28].

36. The Queensland decisions to which I have referred concerned the question of whether the work done was “extraction” of minerals within the first limb of the Mining Exception set out at [34(a)].

37. In both HM Hire and Thiess the work called for by the contracts on the surface of mine sites involved, to oversimplify a little, clearing and grubbing works and topsoil stripping and replacement. [16] The question thus was whether such work could be characterised as being for the “extraction by surface working” of minerals in the land below. As those cases did not involve underground work, the second and third limbs of the Mining Exception [17] did not arise for consideration.

    16. See HM Hire at [15].

    17. Those referred to at [34(b) and (c)] above.

38. It was in that context that each of Fryberg J, Douglas J and the Queensland Court of Appeal expressed views to the effect that the Mining Exception should be construed narrowly.

39. Thus, in Thiess, Fryberg J said:

“I accept that the work performed by Warren was a necessary part of opening the coal mines. But that is not the issue. The exemption given by [the Mining Exception] is not expressed to apply to work done for the purpose of opening or as preparatory to operating a mine. The words used are much more limited than that. They focus purely on the process of extraction. In my judgment the ordinary meaning of the word, considered in isolation, does not apply to the work done by Warren.”[18]

18. At [42].

40. In HM Hire, Douglas J said, in a passage agreeing with Fryberg J’s observations and approved by the Court of Appeal in Thiess (CofA) [19] :

“I agree with his Honour’s reasons dealing with the proper construction of the section. The facts of this case are also similar to the facts then being considered by his Honour. It also seems to me to be necessary to construe [the Mining Exception] in the context set by [the equivalent of section 5(1)] which describes a relatively broad set of circumstances amounting to construction work. It would detract unnecessarily from the apparent purpose of the legislation and the normal understanding of [the equivalent of section 5(1)] and its hierarchy in the section to extend the meaning of ‘extraction of minerals’ to cover work associated with such extraction where the legislature, as Mr Ambrose submitted, could readily have made such a purpose clear by the use of familiar language of wider meaning than this phrase. There is no reason why [the Mining Exception] should be read so as to displace or render nugatory the meaning of [the equivalent of section 5(1)].”[20]

19. At [63].

20. At [13].

41. And in the Court of Appeal in Thiess (CofA) Philippides J [21] said:

“I do not find anything in the purpose of the provision itself, or of the Act generally, which requires the words in [the Mining Exception] to be given a broad meaning. Indeed, the contrary is the case. The beneficial purpose of the Act is directed at providing a speedy interim means of payment to those who undertake to carry out construction work or to supply related goods and services under a construction contract. It is difficult to see how that beneficial purpose is promoted by a wide interpretation of the [Mining Exception].

…

Had it been the legislative intention, to extend the ordinary meaning of the phrase ‘extraction … by … surface working’ to activities which are integral to or necessary for the extraction of minerals, it would have been a simple matter to do so by clear words. That was not done. By contrast, the legislative intention to widen the scope of s 10(1)(e) [the equivalent to s 5(1)(e)] was made explicit by the broad terminology used in that subsection, which expressly extends to activities that are ‘an integral part of, or … preparatory to or … for completing’ [22] the relevant work.” [23]

21. With whom Holmes and White JJA relevantly agreed.

22. The Queensland legislation refers to “for completing work” rather than “for rendering complete work”.

23. At [62] and [68].

42. Different questions arise here as Cadia does not contend that the work called by the Contract was or concerned the “extraction” of minerals.

43. Here, the work called for by the Contract undoubtedly involved “tunnelling or boring” as well as “constructing underground works”.

The issues

44. The questions are whether:

1. the tunnelling or boring or constructing of underground works called for by the Contract was, on the proper construction of the Mining Exception, for the “purpose of” extraction of minerals; and

2. the Contract also called on Downer to undertake work beyond “tunnelling or boring” or “constructing underground works” (whether or not for the purpose of extraction of minerals) and which was “construction work” within the meaning of s 5(1) or the supply of “related goods and services” within the meaning of s 6(1).

45. If the answer to the question at [44(1)] is “no”, the Mining Exception was not engaged at all.

46. If the answer to the question at [44(2)] is “yes”, the Contract was a “construction contract” whether or not the Mining Exception was otherwise engaged.

47. To answer these questions it is necessary to examine the work Downer undertook under the Contract. It is also necessary to consider the relationship between the Mining Exception in s 5(2) of the Act, and the definition of “construction work” in s 5(1) of the Act and in that light, the proper construction of the second and third limbs of the Mining Exception.

48. Before doing so, I will consider the general nature of the mining activities at the Mine.

The Cadia Mine

49. Ore is extracted from the Mine via a process called “panel cave” mining. This involves dividing the ore body into different three-dimensional zones or areas, called “panels”, and mining them sequentially.

50. Prior to the events with which these proceedings are concerned, the Mine comprised three panel caves known as Panel Cave 1, Panel Cave 2 West and Panel Cave 2 East. Each Panel Cave is located approximately 1,500 vertical metres below the surface and is accessible by a tunnel or access way up to 10.7 kilometres long.

51. The work done by Downer pursuant to the Contract related to the proposed development of a new panel cave to be known as Panel Cave 2-3.

52. Cadia’s General Manager, Mr Aaron Brannigan, described the panel cave mining at the Mine as follows.

53. First, two base levels are established within the ore body: an “Undercut Level” and below that, an “Extraction Level”.

54. Those levels are depicted in the following image. The tunnels at the Undercut Level are depicted in blue and comprise a series of horizontal underground tunnels. The tunnels at the Extraction Level, which are in the form of a grid, are depicted in green.

55. Second, funnels, or drawbells, are then established between the Undercut Level and the Extraction Level, with the narrowest part being closest to the lower Extraction Level.

56. Third, the ore body between the Undercut Level and Extraction Level is blasted with explosives, fracturing the rock above the funnel. The rubble is drawn by gravity into the funnels and, in doing so, is crushed into smaller pieces.

57. Fourth, the rubble is collected from draw points on the Extraction Level by loaders. The loaders deliver the material to underground crushers where it is crushed.

58. Fifth, the crushed material is conveyed to the surface by conveyer belts. The ore is there processed above ground to extract the valuable minerals: gold, silver, copper and molybdenum.

59. The location of the three existing and proposed fourth panel caves is illustrated by the image that follows.

60. Cadia began a program of work to develop Panel Cave 2-3 in 2018.

61. The new panel is, or will be, roughly column-shaped, about 2.3 kilometres long, 1.1 kilometres wide and between 1.3 and 1.42 kilometres deep and oriented horizontally. Mr Brannigan said that it is, or will be, “like a large room”.

62. Downer’s Engineering Manager, Mr Scott Indian, said that there are two distinct phases in the course of an underground mining project.

63. The first is the “development phase” where the mine, or the relevant part of the mine, is constructed and which generally involves “pushing” the tunnels in order to access the ore body, establishing infrastructure and installing services such as water, compressed air lines, electricity and ventilation required for the mining process.

64. The second is the “production phase” where, once the mine has been constructed, the valuable minerals are extracted in bulk from the ground.

65. The development phase precedes the production phase because the tunnels need to be in place before accessing the location where mining will ultimately occur and ore will be extracted.

66. The work undertaken by Downer was completed in February this year.

67. The beginning of the production phase will occur in 2022. That is, extraction of ore has not yet commenced.

68. Mr Brannigan agreed that other mining works must take place before extraction can occur in respect of Panel Cave 2-3.

69. This work includes further tunnelling and boring. I refer to that further work below.

What work did Downer undertake under the Contract?

70. Much of Mr Brannigan’s evidence was directed to what work Downer was observed to do. However, the relevant question is what it undertook to do under the Contract. My attention was not directed to any evidence as to what Downer actually did that assists an understanding of the relevant contractual provisions.

71. The operative provision of the Contract was clause 2 which was in the following terms:

“2. Agreement to perform work

(a)   [Downer] must perform the work under the Contract in accordance with the terms and conditions of the Contract.

(b)   Without limiting paragraph (a) [Downer] must:

(i)   supply the Equipment and perform the work under the Contract as described in Appendix A (Scope of Work); and

(ii)   supply the Spares (if applicable) and perform the related work under the Contract as described in Schedule 16 (Spares), and otherwise comply with the terms of that Schedule (if applicable).

(c)    In consideration of the performance of the work under the Contract by [Downer], [Cadia] will, subject to the terms and conditions of the Contract, pay to [Downer] the Price.”

72. “Work under the Contract” is defined to mean, relevantly:

“…the work which [Downer] is or may be required to execute or provide under the Contract and includes without limitation the Works, … all works executed or provided by the Contractor in connection with the Works …, services (including any supervision or assistance with commissioning, operation or training that may be required under the Contract), variations, remedial work …”

73. “Works” was defined to mean:

“The whole of the work to be executed in accordance with the Contract including any variations provided for by the Contract, which by the Contract is to be delivered or otherwise handed over to [Cadia]…”

74. The Scope of Work was set out in Appendix 8 of the Contract. Clause 4.4 of Appendix A provided:

“The work under the Contract comprises:

(a)   The development of a decline extension from the existing underground workings access, complete with associated passing bays, stockpile and service cuddy requirements;

(b)   The development of lateral drives to access the next two blocks of the Cadia ore body (new caving zones) concurrent with ground support requirements including meeting mandatory Quality Assurance requirements;

(c)   The installation of long operational life in-cycle ground support including shotcrete, bolt and mesh, cable bolts, and Osro straps to the [Cadia] design requirements;

(d)   The development of an underground conveyor decline including specific long-term ground support and associated stockpile requirements;

(e)   The development of lateral drives from existing underground workings to access new raise bore sites, including ground support requirements and stripping of chambers;

(f)    Load and haul of the material from excavations to [Cadia] nominated disposal points;

(g)    Extension of specified mine services to [Cadia] standards including both temporary and permanent requirements within the Contractor’s work areas; and

(h)   Relevant work to support the raise bore works including, but not limited to, workplace safety supervision, cuttings management, equipment transportation, dust management and barricades.”

75. Clause 5.1 then provided:

“The Contractor must provide and is responsible for everything necessary to perform the works, unless specifically nominated otherwise in this Appendix.

The work under the Contract includes, but is not necessarily limited to, the following activities and items as approved by the [Cadia] Representative:

(a)   Mobilisation to the Site, establishing and disestablishing facilities, Site clean-up and demobilisation;

(b)   Management, administration and overheads of all activities within the Contractor’s scope;

(c)   Provision of plans and management systems including a safety management system, quality assurance and quality control management plan and a NewSafe implementation plan;

(d)   Underground Shift Supervisors for the Works;

(e)   Construction of declines, level and access development, excavations for items of infrastructure plant and other requirements, including drilling, charging, firing and bogging;

(f)   Installation of all ground support in excavated areas;

(g)   Drilling service and drain holes;

(h)   Secondary breaking of oversize material;

(i)   Haulage of excavated material to the nominated dump point;

(j)   Check scaling and ground control activities;

(k)   Rehabilitation of pre-existing ground supports and surface supports as required.

(l)   Remedial work as required;

(m)   Provision of assistance to the raise bore contractor including workplace safety inspections, mucking of cuttings, movement of cutter heads and equipment, supply of concrete, establishment and maintenance of dust curtains and provision of services;

(n)   Provision of temporary services, equipment and/or personnel as may be needed from time to time by [Cadia’s] third-party contractors for drilling and infrastructure installation activities;

(o)   Work plans, shift activity recording and reporting;

(p)   Development, including drilling and loading; and

(q)   Other relevant work that may from time to time be directed by the MRT, or the [Cadia] Representative in accordance with this Contract.”

76. I will return to some of these items when considering Downer’s submission that much of the work called for by the Contract was not work of the kind described in the Mining Exception but was, rather, “construction work” of the kind described in s 5(1) of the Act.

77. Most of the work called for by the Contract was to be carried out underground. The work that was not carried out underground comprised certain maintenance and administrative activities which were carried out in buildings above ground.

78. As a result of Downer’s work, by February 2020 the Undercut Level and the Extraction Level for Panel Cave 2-3 had been partially excavated.

79. The work effected by Downer at the Undercut Level and on the lower Extraction Level is illustrated in the following images.

80. The work effected by Downer is depicted in red.

81. “Future work” is depicted in blue and, as the images show, will include the horizontal tunnels to be built at the Undercut Level and the grid series of tunnels at the Extraction Level.

82. Now that Downer has effected the work illustrated in red on these images, the ore body in Panel Cave 2-3 is ready for mining. However, other mining works must take place before extraction of minerals can occur. These works include the creation of the tunnels depicted in blue on the above images and the drilling and blasting of drawbells outside of the tunnels excavated by Downer.

83. The tunnels mined by Downer will be used during the Production Phase in order that personnel and equipment gain access to the ore body in Panel Cave 2-3 and to move within Panel Cave 2-3. The tunnels will also be used for movement of ore extracted from Panel Cave 2-3 to be taken to the surface.

84. It is true, as Mr Shipway who appeared for Cadia emphasised, that Mr Indian said:

“Works of the kind carried out by Downer generally serve the purpose of developing tunnels to access the ore body for future production activities”.

85. But that very general statement begs the question before me, which is whether the work called for by the Contract was, on the proper construction of the mining Exception, for “the purpose” of the “extraction of minerals”.

86. The work done by Downer did result in the extraction of some 65,000 tonnes of material described as “development ore”. The “development ore” was stockpiled for processing. Mr Shipway emphasised this point in written submissions. However, during oral argument Mr Shipway accepted that the work undertaken by Downer pursuant to the Contract was not for the purpose of extraction of this “development ore”. Rather such extraction was no more than a by-product of work undertaken by Downer under the Contract. Mr Shipway thus accepted that the extraction of the “development ore” is not relevant to the issues before me.

Was the work undertaken by Downer under the Contract tunnelling or boring of the constructing of underground works “for the purpose of” extraction of minerals?

87. As the images set out at [79] above reveal, the tunnelling, boring and underground construction work undertaking by Downer did not lead to a situation where mineral extraction could take place immediately

88. Before that could happen, the tunnelling depicted in blue on those images must take place so that the Under Cut and Extraction Levels are created.

89. I have set out the five stages of panel cave mining described by Mr Brannigan at [53] to [58] above.

90. Downer did none of the work described in the second, third, fourth and fifth stages.

91. At the time Downer effected work in the Mine, none of those stages had been reached. That will not occur until 2022.

92. In relation to the first stage, the construction of the Undercut Level and the Extraction Level, as the images I have set out at [79] above show, Downer did little more than construct an access to the proposed Undercut and Extraction Levels.

93. The work that Downer did was in what Mr Indian described as the development phase. The production phase, that is the phase when minerals will be extracted, has not yet commenced.

94. It is common ground that the question of whether the work required under the contract was for the relevant purpose is to be determined objectively.

95. Mr Hume submitted that the relevant purpose was that of the party performing the work, Downer, objectively determined. An alternative view is that the relevant purpose is that of the commissioning party, Cadia, also objectively determined.

96. However, in my opinion, the better view is that expressed by Fryberg J in Thiess where his Honour said that the relevant purpose should be decided “by reference to what a reasonable person in the position of the parties would conclude as to the object of what purpose of the contract”. [24]

    24. Recorded as a submission made by Thiess at [68] but found by his Honour to be “attractive” at [76].

97. Both Mr Hume and Mr Shipway submitted that when considering whether an activity is for its stated purpose, it is necessary to consider the connection or relationship between the two.

98. The authorities dealing with statutory provisions prescribing the existence of a particular purpose, speak of whether there is “sufficient proximity”[25] between a specified act and the “prescribed end purpose”. [26]

    25. Curran v Thomas Borthwicks and Sons Ltd (1990) 26 FCR 241; [1990] FCA 75 at [34] (Gray J).

    26. Sandhurst Holdings (Australia) Limited v Commissioner of State Revenue (2009) 25 VR 59; [2009] VSCA 167 at [77] (Dodds-Streeton JA, with whom Buchanan JA and Beech AJA agreed).

99. The question here is whether the work in question, the tunnelling, boring and underground construction work, has a “sufficient proximity” with the “prescribed end purpose” of extraction by underground working of minerals so that it can be said that the former is for the purpose of the latter.

100. Here,

1. Cadia’s case is that it is sufficient if the tunnelling, boring or construction of underground work is for the “ultimate purpose” of extraction of minerals; and

2. Downer’s case is that it is necessary that there be a “close and proximate” connection between the tunnelling, boring and construction of underground works and the extraction of minerals; that is, that it is necessary that the tunnelling, boring and construction of underground works be for the “very process of extraction”.

101. In my opinion, Downer’s construction is to be preferred for a number of reasons.

102. First, consistently with the principles I have set out above, the Mining Exception is to be construed beneficially to the subcontractor, here Downer; that is, it should be construed narrowly.

103. Second, as Mr Hume submitted, the extension of the usual meaning of “extraction” by inclusion of tunnelling, boring or construction of underground works for that purpose, suggests the need for there to be a close “proximity” between the two.

104. Third, as it has been held in the cases I have set out earlier, that “extraction” does not include work “associated with” extraction or work “preparatory to” extraction, it is hard to see why tunnelling, boring or construction of underground works, which is only in anticipation of ultimate extraction of minerals, should be held to be work “for the purpose of” such extraction.

105. Fourth, the Act, and s 5 itself, specifies circumstances where a less proximate connection is required. Thus subs 5(1)(e) includes as “construction work” work that is “preparatory” to such work. As Mr Hume submitted, the “Act says so expressly when there is an intention to bring in ancillary activities”. No such words are used in the Mining Exception. For example, the Mining Exception does not specify tunnelling, boring or construction of underground works “preparatory to” extraction of minerals. Rather the Mining Exception simply specifies such works “for” the purpose of extraction of minerals. That suggests to me a legislative intention that tunnelling, boring or construction of underground works referred to in the Mining Exception must be for the actual purpose of extracting minerals.

106. As Mr Hume submitted, an example of such work would be where a subcontractor undertakes to extract minerals and to do all things necessary to that end, including tunnelling or boring and constructing underground works.

107. Another example would be where a subcontractor does tunnelling, boring or construction of underground works to the point at which extraction is actually to take place and for the purpose of that extraction.

108. Contrary to Mr Shipway’s submissions, I do not see this construction as rendering the words “tunnelling” or “boring” otiose. The work done in these circumstances may well be other than tunnelling or boring and may well involve construction of underground works otherwise than by tunnelling or boring.

109. Contrary to Mr Shipway’s submissions, I do not see the observations of Fryberg J that I have set out at [31] above to be inconsistent with this conclusion. His Honour’s remarks were directed to his conclusion that the reference to tunnelling, boring or construction of underground works showed that the Mining Exception extended the ordinary meaning of “extraction”. All his Honour was saying was that as long as the tunnelling, boring and construction of underground works was “for the purpose” of extraction, it was not necessary to show that the tunnelling, boring and construction of underground works itself resulted in extraction.

110. For those reasons, my conclusion is that the object and purpose of the Contract was not to cause Downer to undertake work for the purpose of extracting minerals, but was rather work preparatory to, and in anticipation of the ultimate and later extraction of minerals. The object and purpose of the Contract was not to cause Downer to undertake work for the purpose of actually extracting minerals.

101. In these circumstances, in my opinion, the Mining Exception was not engaged.

102. It follows that the work called for the Contract was “construction work”, that the Contract is accordingly a “construction contract”, that the Act was engaged and that the adjudicator had jurisdiction.

Did the Contract call for Downer to do “construction work” or supply “related goods and services” not caught by the Mining Exception?

113. In any event, Downer contends that much of the work called for by the Contract was “construction work” of the kind described in s 5(1) or the supply of “related goods and services” of the kind described in s 6(1) which work was, on no view of the matter, tunnelling or boring or constructing underground works for the purpose of extracting minerals and thus not caught by the Mining Exception.

114. There a number of preliminary matters to be considered.

115. The effect of subs 5(1)(a) and (b) of the Act is that the construction of structures or works forming “part of land” comprises “construction work”.

116. Mr Shipway accepted that structures or works constructed underground “form part of land”.

117. Thus, but for the Mining Exception, this work would be “construction work” for the purposes of, at least subs 5(1)(a) and (b) of the Act.

118. The effect of subs 5(1)(e) is to expand the operation of subs 5(1)(a), (b) and (c) by including, as “construction work”, “any operation which forms an integral part of, or is preparatory to or is for rendering complete” work of the kind referred to in subs 5(1)(a), (b) and (c). Subsections 5(1)(c)(i) to (v) have the effect that there is included in such operations the items specified in those subsections.

119. To repeat, s 5(1)(e) of the Act provides:

(e) any operation which forms an integral part of, or is preparatory to or is for rendering complete, work of the kind referred to in paragraph (a), (b) or (c), including—

(i) site clearance, earth-moving, excavation, tunnelling and boring, and

(ii) the laying of foundations, and

(iii) the erection, maintenance or dismantling of scaffolding, and

(iv) the prefabrication of components to form part of any building, structure or works, whether carried out on-site or off-site, and

(v) site restoration, landscaping and the provision of roadways and other access works”

120. Mr Shipway submitted that:

“…it is not sufficient that an operation merely ‘forms an integral part of’, ‘is preparatory to’ or ‘is for rendering complete’ work of the kind referred to in section 5(1)(a), (b) or (c) for it to fall within subsection (e). To be caught, an ‘operation’ must also be a species of the genus identified by the examples listed in subsections (e)(i) to (v).”

121. Thus, the effect of Mr Shipway’s submission was that the effect of the word “including” and of sub paragraphs (i) to (v) in subs 5(1)(e) was to define and confine the meaning of the genera in the chapeau to the subsection.

122. Mr Shipway submitted that the “operations” listed in subs 5(1)(e)(i) to (v) are:

1. operations having a particular character;

2. operations which are linked by a common theme;

3. not operations that necessarily must be carried out by every contractor in order to carry out work at a site;

4. involve work in the nature of “construction work” in the “usual” sense of that word;

5. commonly the subject of stand-alone contract;

6. yield physical results that are within the usual meaning of “works”.

123. Mr Shipway’s submission did not explain how those matters compelled the construction of subs 5(1)(e) for which he contended.

124. The difficulty I see with Mr Shipway’s submission is that it contradicts the plain wording of subs 5(1)(e) and reads the word “including” at the end of the chapeau as if it said “being” or “that comprise” or something to that effect.

125. The function of the word “including” is, generally, to extend an identified concept. [27] Here, the effect of the word and of the sub paragraphs that follow is to provide a non-exhaustive list of examples of activities that are specified as being included in the three genera listed in the chapeau. I do not see how the sub-section can be read as confining its operation to the matters so specified.

     27. Eg Corporate Affairs Commission (SA) v Australian Central Credit Union (1985) 157 CLR 201; [1985] HCA 64 at 206-7 [5] (Mason ACJ, Wilson, Deane and Dawson JJ).

126. Mr Shipway also sought to develop what he described as the “section 5 read-as-a-whole point”.

127. Mr Shipway summarised that submission as follows:

“Section 5, read as a whole, does not permit a sub-activity of work within 5(2)(b) to be relied upon to avoid the [Mining Exception]”

128. As best I understood that submission, it was to the effect that work which is an “aspect or incident” to “tunnelling or boring, or constructing underground works” for the purposes of the extraction of minerals is sufficient to engage the Mining Exception.

129. But that reads into the Mining Exception words which do not appear in it. It also seeks to incorporate into the Mining Exception an extended operation of its words such as would result if it contained a provision like s 5(1)(e).

130. Thus Mr Shipway submitted:

“It must be accepted that it is possible when dealing with work described in general terms such as ‘tunnelling or boring’ or ‘constructing underground works’ to posit many sub-activities that make up or a ‘preparatory to’, an ‘integral part of’ and/or ‘for rendering complete’ that work.

If merely by the semantic exercise of breaking work capable of being caught by s 5(2)(b) down into sub-activities that are capable of coming within s 5(1)(e) and isolating them from the context of the broader contracted works the exception is thereby avoided, that would render s 5(2)(b) otiose. Taken to its logical conclusion, Downer’s argument is capable of converting non-construction activities that are ‘preparatory’ or ‘integral’ to work falling within s 5(1)(a) to (c) (such as obtaining a mining licence) into ‘construction work’ under the Act, and consequently s 5(2)(b) would never be capable of exempting such activities.”

131. However, for the reasons I have set out above, my conclusion is that the Mining Exception should be construed narrowly.

132. In my opinion, the words “tunnelling or boring, or constructing underground works” should be construed to mean the actual process of tunnelling, and the actual process of boring, and the actual process of the constructing of underground works; and not other work which is an “aspect or incident” of that work. Such a construction is consistent with the construction of the Mining Exception that the purpose of the tunnelling, boring or construction of underground works must be the actual process of extraction of minerals.

133. Although I have for convenience and as a shorthand, used the expression “Mining Exception” to describe subs 5(2), I do not see it as extending generally to some broad category of “mining industry operations” [28] . The provision is directed to what it specifies: relevantly, tunnelling, boring and underground construction for the purpose of the extraction of minerals. Nothing wider.

     28. See Thiess (CofA) at [62] where Philipiddes J, in a passage preceding that set out at [41] above rejected the proposition that the Mining Exception, as a general matter, “is directed at work ‘constituting mining industry operations’”.

134. I do not agree that this construction renders the Mining Exception otiose. As Mr Hume submitted, if there is a contract which contains undertakings to carry out construction work and undertakings to carry out work that it not construction work, the contract remains a construction contract. If a payment claim is submitted under such a contract and the payment claim includes a claim for work that is not construction work, the payment claim is valid, but the adjudicator should not award an amount for work that is not construction work. Thus, the Mining Exception has an important role to play in limiting the amount that the adjudicator should award.

135. Further, the Mining Exception has no work to do in relation to the operation of subs 5(1)(e).

136. Work either falls within the Mining Exception or it does not.

137. If the work in question is of the kind described in the Mining Exception, then that work is not “construction work” and work which by reason of subs 5(1)(e) might otherwise be of the kind described in the subsections in s 5(1) is deemed not to be construction work.

138. If the Mining Exception is not engaged, then s 5(1), including subs 5(1)(e), operates in accordance with its terms and is not the subject of any limitation arising from the Mining Exception.

139. Such work as is actually tunnelling, boring or constructing underground works is within it. Other work is not.

140. Returning to Downer’s contention that the Contract called for Downer to do “construction work” not caught by the Mining Exception, as I have said at [15] above, a contract is a “construction contract” if any undertaking in it is to carry out “construction work”.

141. That is, as Mr Hume submitted, the Contract would only not be a “construction contract” if:

1. all of the undertakings in the Contract fall within the Mining Exception; or

2. to the extent that any of the undertakings in the Contract do not fall within the Mining Exception, they do not fall within any of the definitions of “construction work” in s 5(1) or of “related goods and services” in s 6(1).

142. Mr Hume contended that there were a large number of undertakings in the Contract that were:

1. either “construction work” within one of the categories in s 5(1), or “related goods and services” within the meaning of s 6(a) and 6(b); and

2. not within the Mining Exception

and that, accordingly, the Contract is a “construction contract” for the purposes of the Act whether or not the Mining Exception is otherwise engaged.

143. Mr Shipway’s response was, to a large extent, to contend for the construction of subs 5(1)(e), the Mining Exception and s 5 generally to which I have referred, and not accepted.

144. Thus, most of Mr Shipway’s submissions as to particular undertakings in the Contract were to the effect that either they were aspects of or incidental to constructing underground works (and thus, on Mr Shipway’s construction, within the Mining Exception) or that they were not activities of the kind specified in subs 5(1)(e)(i) to (v) (and thus, on Mr Shipway’s construction, not within subs 5(1)(e)).

145. As I have not accepted Mr Shipway’s construction of the Mining Exception or subs 5(1)(e), it follows that I do not accept his submissions about these undertakings.

146. I do not find it necessary to deal with all of the undertakings in the Contract to which Mr Hume referred.

147. A few examples will suffice to show that some of Downer’s undertakings in the Contract comprised construction work, so as to render the Contract a construction contract.

148. One of Downer’s undertakings under the Contract was “haulage of excavated material to the nominated dumping point”. [29] Such haulage not “tunnelling, boring or constructing underground works” for the purposes of the Mining Exception, but is an operation forming an “integral part” of the construction of “works” forming “part of land” and thus construction work by reason of the combined effect of subs 5(1)(b) and (e). For the reasons I have set out, it is not to the point that “haulage” is not specified in any of subs (5)(1)(e)(i)-(v).

     29. See [75] above at (i).

149. Other like examples are Downer’s undertakings to “establish facilities”, “disestablish facilities”, effect “site clean up”, engage in “secondary breaking of oversize material”, manage “stockpile … of material underground”, and “dewatering of the mine” and of “raw water entering the declines and drives”. None of these is “tunnelling, boring of constructing underground works” and all fall within one or other of the genera in the chapeau to subs 5(1)(e).

150. For these reasons I accept Downer’s submission that, even if, contrary to my opinion, the Mining Exception is engaged because the tunnelling, boring and underground construction works were for the purpose of the extraction of minerals, the Contract is nonetheless a construction contract because some of the work it called for was construction work.

The reference date point

151. Downer served the payment claim that led to the determination referred to at [3] above, on 8 May 2020.

152. The payment claim was in respect of unpaid work carried out in November 2019 and referred to in a payment claim served by Downer on Cadia on 15 December 2019.

153. A claimant may include in a payment claim an unpaid amount that has been the subject of a previous claim. [30]

     30. Section 13(6) of the Act.

154. Cadia contends that the 8 May 2020 document was not a valid payment claim because 15 May 2020, and not 8 May 2020, “was the reference date for the purpose of section 8(1) of the Act” and “was the earliest date on and from which Downer was entitled to a progress payment under section 8(1) of the Act”. [31]

     31. List Statement at C22.

155. I have set out s 8(1) of the Act in the form it was at the relevant time at [13] above.

156. Subsection 8(2) of the Act provides:

In this section, reference date, in relation to a construction contract, means:

(a)    a date determined by or in accordance with the terms of the contract as the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract, or

(b)    if the contract makes no express provision with respect to the matter—the last day of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month.

157. The Contract made provision for payment and the rendering of invoices in cl 4.1 which provided:

“(a)   [Downer] must render an Invoice to [Cadia] after fifteen (15) days following the end of each month during the period in which the Services are provided, in respect of the Services performed in that month, calculated by reference to the prices, fees, unit rates or other amounts specified in Schedule 3 (Price). The process prior to submitting the Invoice shall be:

(i)   [Cadia] shall provide the survey information set out in item 5.5 of Attachment 2 (Scope of Work and Services), no later than five (5) days following the end of the month;

(ii)   [Downer] must prepare a monthly progress claim, including details of calculations and any evidence substantiating the amounts used, which is submitted to [Cadia] for review no later than eight (8) days following the end of the month;

(iii)   without limiting [Cadia]’s rights under clause 5.2(d), [Cadia] will assess and provide feedback to [Downer] by the fourteenth day following the end of month of receipt of the monthly progress claim.”

158. Clause 4.2 set out what must be included in an invoice rendered by Downer.

159. Clause 4.3(a) described what Cadia must do once Downer submitted its invoice:

“(a)    Within 10 Business Days of receipt of an Invoice pursuant to clauses 4.1 and 4.2, [Cadia] will assess the Invoice and will issue to [Downer] a payment certificate identifying the Invoice to which it relates evidencing [Cadia]’s opinion of the moneys due from [Cadia] to [Downer] pursuant to the Invoice and reasons for any difference and assessment of moneys due from [Downer] to [Cadia] pursuant to the Contract (Payment Certificate).”

160. Clause 4.4 then detailed how payment was to be effected once Cadia indicated the amount of payment it proposed to make:

“(a)    Subject to the other provisions of the Contract (including clauses 4.6 and 4.7), [Cadia] must pay to [Downer] the amount shown on a Tax Invoice in respect of Invoices for work under the Contract seventy five (75) days from the date that the Invoice in accordance with clauses 4.1 and 4.2 was received by [Cadia].”

161. Mr Shipway submitted that, by reason of these provisions, the reference date “determined by or in accordance with the terms of the Contract as the date on which a claim for a progress payment may be made”[32] was the fifteenth of the month.

     32. Section 8(2)(a).

162. However, as Mr Hume pointed out, it is no part of Cadia’s case that, on the day the payment claim was served, there was no available reference date.

163. At the relevant time,[33] subsections 13(1) and (5) of the Act provided:

13 Payment claims

(1) A person referred to in section 8(1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment.

…

(5)    A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.

33. The wording of s 13 has since changed.

164. As Mr Hume submitted, the combined effect of ss 8(1), 13(1) and 13(5) of the Act, as those provisions have been construed, is that:

1. a payment claim cannot be served unless there is a reference date; [34]

2. each time a new reference date arises, any existing reference date is extinguished; and

3. a claimant cannot “serve more than one payment claim in respect of each reference date”. [35]

   34. Sections 8(1) and 13(1).

   35. Section 13(5).

165. Thus there is no “available” reference date if reference dates have never arisen under s 8(1), or if a reference date has arisen, but a payment claim has already been served in respect of it, so as to cause s 13(5) to be engaged.

166. Mr Hume submitted that, at the time Downer served its 8 May 2020 payment claim, there was an available reference date being 15 April 2020. Mr Hume submitted, and Mr Shipway did not contest, that Downer had not, before 8 May 2020, served a payment claim relying upon that reference date.

167. That appears to me to be an end to the reference date point.

168. In any event, the evidence establishes that the 8 May 2020 payment claim was in respect of unpaid work referred to in a payment claim made on 15 December 2019. This is a course that is permitted, in terms, by s 13(6) of the Act.

169. Further, I see substance in Mr Hume’s submission that, on the proper construction of cl 4.1 of the Contract, the reference date also arose on the eighth of the month, being the date specified in cl 4.1(a)(ii) for Downer to provide a “monthly progress claim” to Cadia “for review”.

170. I need not express any final view about that matter.

171. According to its terms, cl 4.1 requires that the invoice referred to in the chapeau to the clause be “in respect of the Services performed” of the preceding month.

172. Section 13(4) of the Act provides:

A payment claim may be served only within:

(a)    the period determined by or in accordance with the terms of the construction contract, or

(b)    the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied),

whichever is the later.

173. Section 13(4) thus permits a contractor to serve a payment claim for work done in the preceding 12 months. The effect of the words that I have set out at [171] above would be to prevent Downer from serving a payment claim for work done prior to the preceding month. That provision is inconsistent with s 13(4) and is thus one purporting to exclude or modify the operation of the Act. For that reason it is void by reason of s 34 of the Act.

174. Finally, Mr Shipway submitted that the payment claim served on 8 May 2020 was, in fact, in respect of a 15 May 2020 reference date. I am unable to see any basis for that submission.

175. For those reasons, I am satisfied that the payment claim was served in respect of an available reference date.

Conclusion

176. Cadia’s challenge to the adjudication determination fails.

177. The proceedings should be dismissed. The parties should bring in short minutes to give effect to these reasons.

Endnotes

Decision last updated: 11 November 2020