Monadelphous Engineering Pty Ltd and Muhibbah Construction Pty Ltd trading as Monadelphous Muhibbah Marine v Wiggins Island Coal Export Terminal Pty Ltd

Monadelphous Engineering Pty Ltd and Muhibbah Construction Pty Ltd, trading as Monadelphous Muhibbah Marine, brought an action against Wiggins Island Coal Export Terminal Pty Ltd in the Supreme Court of Queensland. The dispute arose from a series of contracts for the construction of a coal export terminal, where the defendant claimed the right to utilise four bank guarantees provided by the plaintiffs as security for the plaintiffs' performance, amounting to 10 per cent of the contract price. The plaintiffs argued that the defendant's call upon these guarantees was not justified and that the terms of the contract were qualified by specific provisions of the Queensland Building and Construction Commission Act 1991 (Qld), which limited the retention amounts and securities for a builder's performance to 5 per cent of the contract price and required written notice before a security could be used to obtain an amount owed.

The court was required to determine whether the contract between the parties constituted a "building contract" within the meaning of the Act, and if so, whether the provisions in question applied. The definition of a building contract was central to the case, as it encompassed a contract for carrying out building work. The court had to ascertain whether the items of work specified in the contracts fell within the excluded items outlined in section 5 and Schedule 1AA of the Regulation. The plaintiffs bore the onus of proving that the contract was indeed a building contract, which would trigger the applicability of the statutory provisions.

In its reasoning, the court applied a broad and practical interpretation of the items within the Regulation to determine whether the work constituted "building work". It concluded that none of the items pleaded by the plaintiffs established that the contract, in its original or varied terms, was for building work as defined by the Act and the Regulation. The court held that the contract was not a building contract for the purpose of the Act, and therefore sections 67J and 67K of the Act did not apply. The plaintiffs' claim was dismissed, and the court rendered an order to that effect.

The final orders of the court dismissed the plaintiffs' claim, upholding the defendant's right to call upon the bank guarantees as provided for in the contract. The court's decision hinged on its interpretation of the statutory definition of a "building contract" and the specific exclusions outlined in the Regulation, leading to the conclusion that the provisions in question did not apply to the contracts at hand.