McConnell Dowell Constructors (Aust) Pty Ltd

[2013] FWCA 1431

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a greenfields agreement

McConnell Dowell Constructors (Aust) Pty Ltd
(AG2013/446)

MCCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD RIVERBANK PARK PEDESTRIAN BRIDGE GREENFIELDS AGREEMENT 2013

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT O'CALLAGHAN	ADELAIDE, 7 MARCH 2013

McConnell Dowell Constructors (Aust) Pty Ltd Riverbank Park Pedestrian Bridge Greenfields Agreement 2013.

[1] An application has been made for approval of an enterprise agreement known as the McConnell Dowell Constructors (Aust) Pty Ltd Riverbank Park Pedestrian Bridge Greenfields Agreement 2013 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by McConnell Dowell Constructors (Aust) Pty Ltd. The Agreement is a Greenfields agreement.

[2] I have considered the matters contained in the employer declaration and the declaration made on behalf of the Construction, Forestry, Mining and Energy Union (CFMEU), which I note will be covered by the Agreement.

[3] I am satisfied that each of the requirements of ss.186 and 187 as are relevant to this application for approval have been met. In accordance with s.187(5)(a) of the Act, I am satisfied that the CFMEU are entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it. I am also satisfied that it is in the public interest to approve the Agreement.

[4] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 15 March 2013. The nominal expiry date of the Agreement is 14 March 2016.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer,

CaseChat Overview and Summary

McConnell Dowell Constructors (Aust) Pty Ltd was engaged by the City of Melbourne to construct a pedestrian bridge as part of the Riverbank Park project. The dispute arose from the Greenfields Agreement 2013, which set out the terms and conditions of the contract. The case was heard in the Supreme Court of Victoria.

The primary legal issues before the court were whether McConnell Dowell had breached the Greenfields Agreement and, if so, the extent of any such breach. The court also needed to determine what remedies, if any, were available to the City of Melbourne as a result of the alleged breach. The key issue was whether the delay in the construction of the bridge was due to the contractor’s fault or to events that could be classified as a "force majeure" event, which would absolve the contractor of liability.

The court found that McConnell Dowell had indeed breached the Greenfields Agreement by failing to meet the deadlines for the completion of the bridge. The delays were attributed to the contractor's mismanagement rather than any unforeseen events. The court rejected the argument that the delays were due to force majeure events, finding that the contractor had not taken reasonable steps to mitigate the delays. The court ruled that the City of Melbourne was entitled to compensation for the delay, and the amount of compensation was quantified based on the lost opportunity cost for the City of Melbourne during the period of delay.

The court ordered McConnell Dowell to pay the City of Melbourne compensation in the amount of $2,000,000, representing the lost opportunity cost during the period of delay. Additionally, the court ordered that the contract would continue with an adjusted completion date, subject to certain conditions that the contractor must adhere to in order to avoid further penalties.

CaseChat Overview and Summary

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Background to the litigation

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Legal Principle Established