This article was written by Scott Watson and Aisling Scott.
The recent decision in Waterford PPG Pty Ltd v Civil Constructors (Aust) Pty Ltd  QSC 8 comes as a reminder that the exclusions from the definition of “building work” are to be construed broadly, so as to give effect to the clear and express legislative intention to exclude particular types of work from the regulatory framework set out in the QBCC Act.
The guidance provided by the Court in this decision is particularly important for building and construction clients operating in Queensland given the implications for access to the adjudication procedures, the penalties prescribed under the QBCC Act, and other potential regulatory implications of carrying out building work without the appropriate licence.
Waterford PPG Pty Ltd (Waterford) and Civil Constructors (Aust) Pty Ltd (Civil) were parties to a contract for the construction of certain drainage and sewerage reticulation works for a proposed subdivision.
During the course of the works, Waterford disputed a payment claim submitted by Civil, and the matter proceeded to adjudication. The adjudicator determined the matter substantially in Civil‘s favour. Waterford sought declaratory relief before the Court and contended that the adjudicator’s determination should be set aside for jurisdictional error. Waterford submitted that Civil’s structural landscaping class of building licence limited Civil to the construction of retaining walls or other similar structures. It followed, in Waterford’s submission, that Civil’s building licence did not entitle Civil to perform the “building work” the subject of the disputed payment claim, such that there was no enforceable construction contract to which the adjudication regime could apply.
Prohibition against “unlawful building work” (i.e. carrying out building work without the appropriate licence)
Section 42 of the QBCC Act prohibits the carrying out of, or undertaking to carry out, building work without the appropriate class of licence. The effect of that provision being that, if Civil did not hold the appropriate class of licence, and had carried out building work, Civil would be:
- ‘not entitled to any monetary or other consideration’ for the performance of that work’
- unable to claim payment pursuant to contractual terms for the building work.
- unable to access the security of payment regime (ie there would be no jurisdiction to ground the adjudication application as no enforceable construction contract exists).
- limited to claiming its actual costs absent any profit, the cost of the contractor’s own or employee labour, amounts in excess of the contract sum or any unreasonable expenses.
Therefore the issue before the Court turned on whether the work which Civil carried out constituted “building work” for the purpose of the QBCC Act. The QBCC Act operates by way of a broad definition of what is “building work”, subject to a series of specific exclusions from that definition contained in the Regulations under the QBCC Act.
Included in the definition of “building work” is the erection or construction of a building. The term “building” is defined as including a water tank connected to the stormwater system for a building. “Building work” is also defined to include the provision of sewerage or drainage in connection with a building and any site work (including construction of retaining structures) related to work of that kind.
Relevantly, the Regulations state that building work under the QBCC Act does noes include “Construction, extension, repair or replacement of a water reticulation system, sewerage system or stormwater drain, other than works connecting a particular building to a main of the system or drain.” Importantly, the Regulations also specify that a “building” in this context, includes a “proposed building”.
Boddice J held that there was no lack of jurisdiction because Civil was not required to hold a licence for these work and therefore Civil was entitled to make the adjudication application. In so finding, His Honour concluded that:
- the works carried out by Civil involved, effectively, the construction of a sewerage system; they were not a “building” in their own right. Therefore, this did not amount to connecting a building to a main sewer line, as additional work needed to be undertaken to connect any future (but not yet “proposed”) building to a main.
- at the time the work was undertaken it could not be properly contended there was a proposed building as the proposed lots had not yet been subdivided, although His Honour did acknowledge such an inference was available.
- the Regulations evidence a legislative intention to exclude particular works from the definition of building work, such that it would defeat the express wording of the Regulations to hold that the construction of a sewerage system constituted “building work” for the purpose of the QBCC Act.