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NEWSLETTER WINTER 2016 Global-Mark.com.au® O H S M a n a g e m e n t . A S / N Z S 4 8 0 1 Global-Mark.com.au® E n v i r o n m e nt a l M a n a g e m e n t . I S O 1 4 0 0 1 Global-Mark.com.au® Q u a l i t y M a n a g e m e n t . I SO 9 0 0 1 Copyright © 2016 EPM All Rights Reserved This Edition When is a Development Consent Required? The Benefits of Getting a QS Involved Early when Benchmarking Love Thy Neighbour Brace for Change Council Amalgamations - Potential Implications for Developers Lessons from Hutchison v Glavcom - Ensure Your Payment Clauses Don’t Fall Afoul of the Building and Construction Industry Security of Payment Act

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Page 1: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

NEWSLETTERWINTER 2016

Global-Mark.com.au®

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Copyright © 2016 EPM All Rights Reserved

This Edition

When is a Development Consent Required?

TheBenefitsofGettingaQS InvolvedEarlywhenBenchmarking

LoveThyNeighbour

BraceforChange

CouncilAmalgamations-PotentialImplicationsforDevelopers

LessonsfromHutchisonvGlavcom-EnsureYourPaymentClausesDon’t FallAfouloftheBuildingandConstructionIndustrySecurityofPaymentAct

Page 2: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

WHEN IS A DEVELOPMENT CONSENT REQUIRED?

A common question arises when our clients contemplateundertakingbuildingworkontheirproperties–“DoIneedapprovalforthis work?”. The work could range fromaninternalfitout,tothedemolitionofanexistingbuildingandtheconstructionofanew building. So how should you satisfyyourselfaboutwhetherornotyourequireapprovalforbuildingwork?

It is useful to review the legislativedefinitions of ‘building work’ and‘development’:

- Building Work means the physical activity involved in the erection of abuilding

- Development means the use or subdivision of land, the erection of abuilding, the carrying out work or thedemolition of a building. Developmentis also defined as any other matterthat is controlled by an EnvironmentalPlanning Instrument (EPI), includingLocal Environmental Plans and StateEnvironmentalPlanningPolicies.

Generally, work to improve a propertybeyond general maintenance requiressome form of consent. However, in thecase of work involving items of heritagesignificance,eventheactofpaintingmayrequire the consent of the local council.Importantly, “development” isn’t limitedtophysicalworkandincludes“theuseofland”.

“What type of approval do I need?”

The NSW planning system is structuredsuchthatthereareanumberofpathwaysto obtain development consent. Thesepathways depend on the nature of thedevelopment,aswellasthedevelopmentcontrols thatapply to the land, includingzoning, height controls and floor spaceratios.

Exempt development allows for veryminor works to be completed without adevelopment consent provided they meet specified standards. This may includeconstructing new balconies, driveways,retainingwallsandfences.

Complying development also requires the development to meet specifiedstandards, but must be the subject ofa Complying Development Certificateissuedpriortoconstruction.Ineachcase,the exempt and complying developmentstandards are codified and allow for anobjectiveassessmentofcompliance.

Typically, Exempt & Complyingdevelopment is specified in the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (CodeSEPP), however, some landusesbenefitfromspecificationsprescribedin alternative EPI’s. For example, theState Environmental Planning Policy (Infrastructure) 2007 (ISEPP) provides a number of generous standards foreducationalestablishments.

Itisadvantageousforaclienttodetermineif a development can be exempt orcomplying as it removes the need tosubmitadevelopmentapplication(bethatto Council or the NSW Department ofPlanningandEnvironment)and,therefore,alsoremovesasignificantamountof‘redtape’.Overmanyyears,EPMhasassistedclients to position their projects to beexempt of complying development andthereby benefit from significant time andcostadvantages.

If a development does not meet thecodified requirements of either exemptor complying development, then aDevelopment Application (DA) mustbesubmittedtotherelevantlocalcouncil.ADAallowsforthesubjectiveassessmentof a development against planningcontrols and development guidelines.The assessment predominantly focuseson the impactof thedevelopmenton thesurroundingenvironmentandcommunity.It is therefore important when preparinga development application to gather acohesive set of documents that clearlyoutlinesthedevelopment,anditsimpactsand mitigation strategies in an effort tostreamline the DA process and eliminate unfavourable assessments or onerousconditions.

The NSW planning process is widelyregardedasoneofthemostcomplexin Australia. EPM has significantexpertise in navigating the NSWPlanning legislation and can assistin investigating the best approvalspathway for each individual projectto ensure that risk in this process is managedappropriately.

Nicho las D ’Ambros ioSeniorProjectManager, epmProjects

EPM News Flash

EPMareproudtoannouncethe appointment of Mark-Anthony Boutros in the roleofSeniorDevelopmentManager. Mark hasextensive experience in town planning and projectfeasibility, arriving at EPMfromoneofSydney’slargestdevelopers. Mark givesEPMadditionalcapacity tosupport our clients across the whole development lifecycle.EPMlookforwardto introducingMark toyouinthenearfuture.

If you have any questionsabout statutory approvalsor the potential of yourfuture development, pleasecontact us at EPM toarrange a complementarypreliminarymeeting.

Page 3: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

THE BENEFITS OF GETTING A QS INVOLVED EARLY WHEN BENCHMARKING

Thereisaninevitablequestionthatarisesduring the beginning of a project: “Howdoes this job compare on cost to othersimilarprojects?”Thisisaperfectlylogicalandreasonablequestion,howeverfindingany two projects that are completelysimilar from a cost perspective is not aseasyasitmayseemfromfirstglance,andtoooftenmistakesaremade.

For example, a large workplace fitoutproject has a budget based on a $/m2from another project recently completedby the architect. The budget is set, thedesign team take a tour of project XYZ,everyonelovesitandoffwegodesigningsomethingofasimilarstandard,knowingthat our project will obviously cost thesame,right?Wrong!

After some rudimentary research, theQS discovers that the rate of $1,200/m2fromprojectXYZwassimplytheheadcontract value. It did not include a cost for loose furniture, AV or IT equipment,professional fees, relocation costs orchangemanagement.

Whatwill thenoftenhappen is theclientunderstandably wants their project for$1,200/m2 as that is all the moneyavailablefromthefunding,sothedesignmeetings start cutting cost. The QS hasto tell the architect they can’t afford aninterconnecting stair on every floor andthefeatureceilingsinthebreakoutspacehavetogo.

Inevitably,theprojectiscompletedonorclose to budget but the client isn’t veryhappy and the design team know theydelivered less than they could have. The builder found it a nightmare becauseshe/he has stepped into a project that isunderfunded and there is no money topayforvariations–forthebuilderorthedesignteam.

OftentheearlyinvolvementofaQScansavesubstantialfundingcostsbypointingout how the benchmark is over specifiedfortheprojectinhand.

How to avoid the pitfalls of inadequatecost benchmarking? First, ask yourselfa few simple questions when thinkingabout benchmarking one project againstanother:

1. What is “included” and what is“excluded”? Both from your own projectcosts and the ones you are using asa yardstick. For example, the simpleaddition or omission of GST can throwyououtby10%beforeyougetstarted.

2. What type of project are youundertaking?Differentprojecttypeshavedifferentcostprofiles;oneofficeisrarelyjust like another even within the samebuilding.

3. Whenandwherewillyoubebuildingyour project? Escalation and regionalcost variances can be considerable. It isnousecomparingyour2016SydneyCBDfitouttoasimilar2014MelbourneOffice.

Obviously, themost importantpoint is togettherightadviceattherighttime.

Get the benchmarking right for buildand funding purposes, get the rightexpertise to establish your budget andgetthetruecostsfromdayone…toavoiddisappointment and issues later.

Luke Fos te r

Execut iveQuanti tySur veyor,MBM

Page 4: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

LOVE THY NEIGHBOUR

So you have worked hard to obtainthat rarefied of all Australian dreams,obtainingyourownparcelofgirtbysea.If this small portion of land happens toreside within the urban limits of Sydney,chancesareyouhadtobeg,stealorkillfor that twenty percent deposit and arenowlookingforwardtooutrightownershipofyourpropertyintheyear2050.

Notwithstanding your crushing debt, younowwishtodosomethingevenmoredenseand develop/renovate your property.Luckilyforyou,toavoidtheteethpullingexercise of lodging a DevelopmentApplication to Council, the NSW StateGovernment introduced the fast trackedComplying Development system, whichwill allow you to “design by numbers”and have your approval within a week. Thiscomparedtothefifty-twoweekssomeCouncil’s require to assess the potentialimpact of a new bird bath, can only beconsideredagoodthing.

Along with fast approval time frames,the use of CDC’s originally provideda greater benefit, the ability to avoidopen discussions with your surroundingneighbours about your proposeddevelopment plans.

Now, I am sure that most of you, likemyself, avoid daily contact with yourneighbours.Thewarforthesmallportionofkerbontherearlanewaytoplaceyourbins, on bin night, has become a viciousfront in the mean streets of Stanmore.So imagine being held at ransom, byneighbours, should I wish to place astudio on top of my garage with a smallwindow which complied with all statutory and non-statutory planning controls, butthey considered it an eyesore from theirsecondguestbedroomandassuchobjectto its construction.

In the good old days (back in 2014), Icould undertake my works and only let my neighboursknowthatIwasabouttostartconstruction in two days. However, afterthousandsofangrycallstolocalCouncilsfrom residents whom feel cheated thattheycouldn’tpasssubjectivecommentson

developmentplans,theNSWDepartmentof Planning modified the EnvironmentalPlanning and Assessment Regulations,requiring that Certifiers provideneighbours with notification letters,fourteendayspriortotheapprovaloftheCertificate.

There was a catch however, the letterstoneighbourscouldnotcontainplansorany specific details of the developmentfor security reasons. The letter is just toinform that a Complying Developmentapplication has been received and thatworksmaycommenceintwoweeks,shouldthe approval be granted. In responseto the new and improved notificationletters,theshiftofenquiriesmovedtotheCertifier,withcountlessneighboursbeingtold politely that ‘no’ they cannot seethe plans and ‘no’ they cannot formallyobjecttothedevelopment.Thisapproachwas called proactive by the DepartmentofPlanninghoweverlipservicemayseema more appropriate title.

Now enter NSW Planning Minister, RobStokeswhoasoflastmonthisproposingtoseekamendmentstotheNSWplanninglegislation that would require applicantsof developments seek consultation withtheir neighbours, prior to an applicationfordevelopment todiscuss theiropinionsand concerns of a future adjacentdevelopment.

If this were to become mandated, theimpacts would be understandablyinteresting. Picture seeking consultationwith a neighbour of whom will lose theirprivacyorsolaraccesstoabackyardasaresultofasecondstoreydevelopmentthatcomplies with the planning requirementsspecified under the CDC provisions. Thiswould be even more interesting shouldconsultation be required between adeveloper of newly zoned R4 portion oflandallowingforhighdensityresidentialand the surrounding existing low scaleresidential community.

AsaCertifierandextownplannerwithinthe NSW planning framework, I stronglybelieve thatemotionshouldbetakenout

ofdevelopmentassessmentasitaddsavariablethatcannotbequantified,adding to the minefield which isthe statutory approval process. Notwithstanding my personalopinion, should this legislation comeinto effect, it would be hard for the“not in my backyard” mentality tonot take hold, which is strange asalmosteveryobjector,alwaysforgetsthat their property was at one time,constructeditself.

And finally, should you be put inthe position where you are required to consult with your neighbours onyour development, I recommendnot bringing up the proposal untilafterthesixthbottleofredhasbeenconsumed.

Alex Mul l inDirector,Construct ionCer t i f icat ionSolut ions

Page 5: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

BRACE FOR CHANGE

The second half of 2016 is shaping upto be a period of significant change forplanninginNewSouthWales(NSW) with newlegislationdestinedforParliament.

However, the memory of previouslyproposed changes to the planningsystem in 2013 that failed to succeedthrough Parliament is likely to be a keyissue for both community and industrystakeholders alike. ABC media reports:“At the time, the Government was criticised by some interest groups for limiting citizens’ legal rights to challenge development decisions, and for placing an emphasis on growth at the expense of environmental protection”.

While both the NSW government andopposition appear to agree that thecurrent laws need to be updated, whatis required is change that gives effectto overall benefits to all stakeholdersas opposed to change for the sake ofchange.

Reforms that are likely to be underconsiderationinclude,inter alia:

• Easier-to-useapplicationandapprovalsystems with increased transparency and appropriateaccountabilitymechanisms;

• Clarification of the hierarchy andrelationship among state, regional andlocalplans;

• Pre-DA lodgement consultation withneighbours;and,

• Afocusongooddesign.

From time to time we are reminded that our plans and the legislation that ismeant to support them are dynamic in natureandshouldnotberegardedasastaticmeanstoanend.Two(2)particularexamplescometomind:

In the first example, a NSW Councilrecently approved a proposed development, the subject of a

developmentapplication(DA) which did not properly fit the relevant definition intheLocalEnvironmentalPlan(LEP). In this case,theCouncilmayhaveinadvertentlyoverlooked the proper characterisation of the development by approving acaravan park without any provision for caravan sites despite this being arequirement in the LEP definition. Theresult was the approval of developmentthat is not permitted in the zone, whichwould normally require submission of aplanningproposaltoamendtheLEP.

Consideration of Section 123 (S.123) of the Environmental Planning andAssessmentAct1979(the Act)pertainingto ‘Restraint etc. of Breaches of this Act’ placed an emphasis on whether or not the consent authority did “take into consideration” matters as are ofrelevance to the development (i.e. theprovisionsofanyenvironmentalplanninginstrumentand/orthepublicinterest,justtonameafew).

The Council contended that it had taken ‘into consideration’ relevant matterscontained in Section 79C (S.79C) ofthe Act, yet the current planning systemdoes not readily accommodate any human error, or possible deliberatebreach in cases where quasi-prohibiteddevelopment ultimately ends up beingapproved despite the obvious needfor a planning proposal. One case tosupport an update in current laws which could benefit the review in the secondhalf of 2016 is the need for the publicinterest to be upheld in all cases andnot just ‘considered’ as matters such asland-use permissibility should neitherbe at the mercy of discretion, nor poorinterpretation.

The current loopholes that exist in the Act needtobeaddressedbeforeintroducinggreater complexity such as mandatoryp re - DAl o d g e m e n tc o ns u l t a t io nw i t h

Page 6: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

neighbours. Often increased complexityis also associated with unpredicted outcomes and given that S.79C of theAct does not currently recognise theoverarching metropolitan strategy as amatter for consideration as part of theassessment of a DA, the priorities forany future change should focus on thefundamentalissues.

Inthesecondexample,Clause4.6oftheStandardLEP(Clause 4.6)pertainingto‘exceptions to development standards’ has regularly been compared withthe provisions of State EnvironmentalPlanningPolicyNo.1(SEPP 1).MuchhasbeenwrittenabouttheinitialconservativeapproachtoClause4.6intheNSWLandand Environment Court (the Court) with later clarification and subsequentconsiderationthroughtheNSWCourtofAppeal highlighting that matters shouldbe considered on a case-by-case basis,i.e.,developmentstandardsshouldnotberegardedassacrosanctwherejustifiablecircumstances exist and flexibility willlead to an improved outcome.

The initial conservative approach to Clause 4.6 is a case of the proverbial‘tailwaggingthedog’aswemustremindourselvesfromtimetotimethatlegislationis designed to support and implementthe plans that are adopted by theGovernmentonbehalfofthecommunity.ItisnottheroleoftheCourttoengageintownplanningthatfuelsareactive-based

approachwhich iscounter-productive toconsent authorities, the community andapplicants alike. Often the objectivebehind the rationale for change toplanninglawbecomesacasualtyof“theprocess”andcaughtupinthemomentumof the change itself, thus leading toineffectiveness and/or poor planninglegislationandregulationswhichdonotreflecttheoriginalintentoftheproposedchanges.

Clause 4.6, like SEPP 1 recognises theneed for flexibility in an environmentalplanning instrument (subject to criteriaof course). Any future changes to theNSW planning system should avoidambiguity, so that stakeholders do notneed to default to the Court in order todetermine,orclarify theactual intentofthe plan.

In bracing for change to the NSWplanning system in the second half of2016, please contact State PlanningServicesregardinganychangesthatmayimpact on your development.

John McFadden

M a n a g i n g D i r e c t o r,S t a t e P l a n n i n g S e r v i c e s

BRACE FOR CHANGE(CONTINUED)

Page 7: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

COUNCIL AMALGAMATIONS - POTENTIAL IMPLICATIONS FOR DEVELOPERS

SinceJanuary2016,48mergerproposalshavebeenreferredtotheChiefExecutiveoftheOfficeofLocalGovernment(OLG),whohasdelegatedtheexaminationandreportingprocess required by theLocal Government Act 1993 to a number of Delegates. TheDelegates are in the process of preparingreports on each of the merger proposals,which will be reviewed by the Minister forLocal Government (The Honourable PaulO’Toole) and the independent BoundariesCommission.

On12May2016,19newcouncilswereannounced,effectiveimmediately.Anothernine proposed merger councils have beengiveninprinciplesupportfromtheMinisterforLocalGovernmentalthoughthemergershavebeenpostponedpendingtheoutcomeofanumberofcurrentCourtproceedings.The effect of the amalgamations is thatcouncillors were stood down and have been replaced with an administrator andaninterimgeneralmanager,whowillbeinplace until 9 September 2017, the dateset for elections for new councils. This is12 months later than the election date forcouncilsnotbeingmerged.

TheNSWGovernment’sStrongerCouncilswebsite identifies that implementationof new councils will be supported byLocal Representation Committees, whichwill be formed by the Administrator.Additionally, the Administrators are toestablish Implementation Advisory Groupsto provide advice to the new councils on ImplementationPlans.

New councils will receive governmentgrants up to $15 million to invest incommunityprojectsandupto$10milliontostreamline administrative processes and cut redtape.Anyunspentfundsareabletoberedirectedtocommunityprojects.

Itisexpectedthatnewcouncilsforthemostpart will aim to operate under a ‘businessasusual’model,andforalreadyapproved

developments, little is likelytochange.Wenotethattheremaybedelaysinvoluntaryplanning agreements being approved dueto councils being reluctant to enter intoagreementsthathavefinancialimplicationsduring themergerperiod.Sydneycouncilswill also have additional obligations toimplement changes to local environmentalplans that meet requirements imposed bytheGreaterSydneyCommission.

Under the Local Government (Council Amalgamations) Proclamation 2016 (Proclamation),newcouncilsaretousebestendeavourstofacilitatetheoperationoftheProclamation,includingsharinginformation,agreeingaboutrequiredmattersandworkingco-operativelywithother councils. TheProclamationidentifiesthat:

(a) newcouncilsmust:

(i) have an operational plan in place by1August2016;

(ii) mustreviewitscommunitystrategicplanby1July2018;

(iii) a new delivery program must beestablished by 1 July 2018 for theperiod commencing on 1 July 2018andendingon30June2021;

(iv) applythestructureforratesappliedbyaformercouncil toratesleviedfor a parcel of land in a formerareaforthe2015/2016ratingyeartothatparcel;

(v) review the rating structure withinthe first term of the new councilfollowing the first election of thecouncil;

(b) thecodes,plans,strategiesandpoliciesof the new council are to be, as faras practicable, a composite of thecorresponding codes, plans, strategiesand polices of each of the formercouncils;

Page 8: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

COUNCIL AMALGAMATIONS - POTENTIAL IMPLICATIONS FOR DEVELOPERS(CONTINUED)

(c) a development control plan orcontributions plan that applied to aformer area immediately before theamalgamation day continues to applyto that part of the area of the newcouncilthatconsistsoftheformerarea;

(d) the code of conduct for a new councilistobethemodelcodeuntilacodeofconduct is adopted by the council inaccordance with the Local Government Act 1993; and

(e) specific requirements for new councilsare set out in Schedules 1 to 17 ofthe Proclamation (and set out in theschedules to the Local Government (City of Parramatta and Cumberland) Proclamation 2016 forParramattaandCumberland.

Once amalgamations have come intoeffect,thenewlyformedcouncilswillbeinthepositionofhavingtwoorthreeplanningteamsallindifferentlocations,alloperatingunder different local environmental plansand council operational policies. In the transitionalphase,itisanticipatedthat:

(a) changestopoliticalmakeupofcouncilsandoverallstrategicdirectionfornewlyformedcouncilsarelikelytooccur;

(b) administrativefunctionsbetweentwoormore amalgamating councils are likelytobeconsolidatedpriortochangestoplanninginstruments;

(c) administrativefunctionsarelikelytobemergedoveraperiodof9-15months;

(d) there will be substantive changes toexisting local environmental plans,development control plans and zoning-changestotheseplanninginstrumentsare expected to take at least 18-24months;

(e) it is anticipated that ‘transitionalprovisions’ will be put into place toenable undetermined developmentapplications to be assessed underpreviousplansandzonings;and

(f) after new planning instruments are ineffect, there are likely to be delays indevelopment application processingdue to new town planning personnelor less staff under the amalgamatedstructure, as well as uncertainty as tohowtoapplynewplanninginstruments.

Fe l i c i ty Doug las

Lawyer,McCulloughRober tson

Page 9: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

LESSONS FROM HUTCHISON V GLAVCOM - ENSURE YOUR PAYMENT CLAUSES DON’T FALL AFOUL OF THE BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT

In this article, we will look at the recentdecisionof theNSWSupremeCourt inJHutchison v Glavcom and the important pointsarisingfromthecaseaboutcontractdrafting,namely:

1.Whenamountsowingbyasubcontractorcan be set off against a payment claim;and

2.Whether contractual provisionsimposingconditionson thepaymentofapayment claim are void.

Background

In mid-2014, Glavcom was engagedby Hutchison to design and installjoinery in the Bondi Pacific, a mixed-useredevelopment of the old Suiss GrandHotel, for a contract sum of $5.3M. Thecontractual date for practical completionwas21April2015.

Hutchison was required to give GlavcomaccesstothesiteinAugust2014.Accesswas not until early April 2015, onlytwo weeks before the date for practicalcompletion. Glavcom did not claim anEOT under the subcontract and neitherdid Hutchison unilaterally grant one.Understandably,Glavcomdidnotachievepracticalcompletionby21April.

Laterin2015,GlavcomservedHutchisonwith a payment claim for $2.9M.Hutchison issued a payment schedule inresponsefor-$6.2M.Thisnegativeamountwas comprised mostly of a $4.3M claimfor liquidated damages. An adjudicatordetermined that $1.2M was payable byHutchisontoGlavcom.

Contractual set offs in a payment claims

The Court upheld the adjudicator’srejection of Hutchison’s claims for LDson the basis that Hutchison could nottake advantage of its own breach – i.e.delayingGlavcom’saccesstothesite.

Inaddition,theCourtheldthatduetoanabsence of any contractual provision forthe calculation of the progress payment

intheSubcontract,theadjudicatorwouldnot have been able to deduct LDs in thepayment claim anyway as there was no set offmechanism.TheCourtconcludedthattheamountofaprogresspaymentwastobe determined under s 9 of the Building and Construction Industry Security of Payment Act 1989 (Act) by reference tothevalueoftherelevantworkonly.

Contractual conditions on payment of a payment claim

Under the subcontract, it was aprecondition for the existence of areferencedateforpaymentthatGlavcomsubmit declarations concerning thepaymentofemployeesandsubcontractors.It was later discovered that Glavcomhad not paid its workers compensation insurancepremiums,incontradictionwithitssubcontractorstatements.

The Court held that contractual provisions creatingpreconditionstotheexistenceofareferencedate,iftheydonototherwisefacilitatethepurposeoftheAct,arevoidorvoidableunders34oftheAct.

As an aside, it is notable that for HeadContracts entered into after 21 April2014, there is a requirement for validsubcontractor statements for paymentundertheAct.AkeytakeawayfromthecaseisthatifaPrincipalwantedtoincludethis requirement in a Head Contract,carefuldraftingisneededtoensurethatitdoesn’trenderthepaymentclauseinthecontractvoidunders34,andhaveotherunintended consequences.

Key Points

Parties need to be aware of how theircontracts deal with a range of issuesarising under the Act. Contracts shouldclearly state how progress claims are tobedetermined,andbedrafted inawaythatdoesnotbreachofsection34ofTheAct.

Garth Campbell and Joseph Dowling

Kennedys

Page 10: EPM - Construction Project Management Sydney - NEWSLETTER€¦ · EPM News Flash EPM are proud to announce the appointment of Mark-Anthony Boutros in the role of Senior Development

Contact Uswww.epmprojects.com.au

POBox1034NorthSydneyNSW2059Level2,146ArthurStreetNorthSydneyNSW2060Ph:(612)94528300Fax: (612)94528388

AcknowledgementsThefollowingorganisationsregularlypartnerwithEPMandcontributedtothecontentofthisnewsletter.

Key ContactsAndrew GrahamCEOMobile:0419732021Email:[email protected]

Stephen Welsh GroupExecutiveMobile:0417307860Email:[email protected]

Mark BlizardGroupExecutiveMobile:0438126778Email:[email protected]

Johan O’Brien GroupExecutiveMobile:0414917904Email:[email protected]

Felicity Douglas-LawyerEnvironmental Planning LawMcCulloughRobertsonLevel16,55HunterStreetSydneyNSW2000 Ph:(02)92708610Fax:(02)92708699 [email protected]

John McFadden-ManagingDirectorStrategic & Statutory PlannersStatePlanningServices P.O.Box394 PyrmontNSW2009 Ph:(02)95521525Fax:(02)95521525Ejmcfadden@stateplanningservices.com.auwww.stateplanningservices.com.au

Garth Campbell and Joseph DowlingConstruction Law Kennedys Level31,2ParkStreetSydneyNSW1235 Ph:(02)82155999Fax:(02)82155988 [email protected]

Luke Foster-ExecutiveQuantitySurveyorConstruction ConsultantsMBMplPtyLtdLevel7,68PittStreet,SydneyNSW2000Ph:[email protected]

Alex Mullin-DirectorAccredited Construction Cer tif iersConstructionCertificationSolutions Suite606,6AGlenStreet,MilsonsPointNSW2061Ph:[email protected]