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J & D Rigging Pty Ltd v Agripower Australia Ltd

 

[2013] QCA 406

Reported at [2015] 1 Qd R 562

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

J & D Rigging Pty Ltd v Agripower Australia Ltd & Ors [2013] QCA 406

PARTIES:

J & D RIGGING PTY LTD
ACN 075 350 140
(appellant)
v
AGRIPOWER AUSTRALIA LIMITED
ACN 123 823 226
(first respondent)
ADJUDICATE TODAY PTY LIMITED
ACN 109 605 021
(second respondent)
HELEN DURHAM
(third respondent)

FILE NO/S:

Appeal No 6662 of 2013

SC No 2128 of 2013

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

20 December 2013

DELIVERED AT:

Brisbane 

HEARING DATE:

5 November 2013

JUDGES:

Holmes JA and Applegarth and Boddice JJ

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

  1. Allow the appeal.
  1. The orders made on 25 June 2013 be set aside.
  1. In lieu thereof it be ordered that the application is dismissed and the applicant pay the first respondent’s costs of and incidental to the application, including reserved costs.
  1. Direct that any submissions by the appellant in relation to costs be filed and served by 31 January 2014, and any submissions in reply be filed and served by 7 February 2014.

CATCHWORDS:

Contracts – Building, engineering and related contracts – remuneration – statutory regulation of entitlement to and recovery of progress payments – adjudication of payment claims – where the first respondent purchased mining plant and equipment which was affixed to land subject to a mining lease – where the first respondent engaged the appellant to dismantle and remove the plant – where the first respondent did not pay the appellant after being served with a payment claim – where the appellant was successful at adjudication – where the primary judge found that the dismantling of the plant was not “construction work” under a “construction contract” within the meaning of s 10 of the Building and Construction Industry Payments Act 2004 (Qld) and consequently the adjudication decision was void for want of jurisdiction – where the primary judge found that “land” does not include mining leases and the plant did not “form part of land” within the meaning of s 10 – whether the phrase “forming, or to form, part of land” in s 10 imports the common law doctrine of fixtures

Acts Interpretation Act 1954 (Qld), s 32A

Building and Construction Industry Payments Act 2004 (Qld), s 7, Sch 2

Agripower Australia Ltd v J & D Rigging Pty Ltd & Ors [2013] QSC 164, related

Allen v Feather Products Pty Ltd (2008) 72 NSWLR 597; [2008] NSWSC 259, cited

Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (In liq) (2000) 202 CLR 588; [2000] HCA 25, cited

Attorney-General (NSW) v Brewery Employees’ Union (NSW) (1908) 6 CLR 469; [1908] HCA 94, cited

Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700; [1938] NSWStRp 35, cited

Barker v The Queen (1983) 153 CLR 338; [1983] HCA 18, cited

Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd [2013] 2 Qd R 1; [2012] QSC 388, cited

CBI Construction Pty Ltd v Abbott [2008] FCA 1629, cited

Commissioner of Main Roads v North Shore Gas Co Ltd (1967) 120 CLR 118; [1967] HCA 41, cited

Director of Public Prosecutions (Vic) v Le (2007) 232 CLR 562; [2007] HCA 52, cited

Director of Public Prosecutions v Le (2007) 15 VR 352; [2007] VSCA 18, cited

Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue (2011) 43 WAR 186; [2011] WASCA 228, cited

Ganter v Whalland (2001) 54 NSWLR 122; [2001] NSWSC 1101, cited

Gibson Lea Interiors Ltd v Makro Self Service Wholesalers Ltd [2001] BLR 407, cited

Grosvenor Constructions (NSW) Pty Ltd v Musico (2005) 21 BCL 266; [2004] NSWSC 344, cited

HM Hire Pty Ltd v National Plant and Equipment Pty Ltd & Anor [2013] QCA 6, cited

Holland v Hodgson (1872) LR 7 CP 328; [1872] SC 19281929, cited

Lenz Nominees Pty Ltd v The Commissioner of Main Roads (2012) 186 LGERA 58; [2012] WASC 6, cited

May v Ceedive Pty Ltd [2006] NSWCA 369, cited

Musico v Davenport [2003] NSWSC 977, cited

National Australia Bank Ltd v Blacker (2000) 104 FCR 288; [2000] FCA 1458, cited

Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2012] 1 Qd R 525; [2011] QCA 22, cited

Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249; [2005] HCA 28, cited

RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390; [2008] QCA 397, cited

Re Lehrer [1961] SR (NSW) 365, cited

TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576; [2010] HCA 49, cited

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

Turner v George Weston Foods t/as Tip Top Bakeries (Newcastle) [2007] NSWCA 67, cited

COUNSEL:

R A Holt QC, with M Ambrose, for the appellant

M M Stewart QC, with M H Hindman, for the first respondent

No appearance for the second and third respondents

SOLICITORS:

Boulton Cleary & Kern for the appellant

TressCox Lawyers for the first respondent

No appearance for the second and third respondents

  1. HOLMES JA:  I agree with the reasons of Applegarth J and the orders he proposes.
  1. APPLEGARTH J:  A large treatment and storage plant was constructed on land at Cape York.  It was constructed by bolting its steel structures onto concrete footings and plinths.  The plant or mill that was constructed, which included a very large kiln, was used to treat and store clay, kaolin and other extracted products.  The owner of the plant and equipment sold it to the respondent.[1]
  1. The land on which the plant was constructed is held on trust for Aboriginal Reserve Purposes by deed of grant in trust. The land is subject to mining leases which were granted in 1995 and which are due to expire in 2016.
  1. The respondent engaged the appellant to dismantle the plant and to remove it from the site. When the respondent did not pay the appellant $3.1 million after being served with a payment claim, the matter went to an adjudication. The adjudicator awarded the appellant an amount just over $2.5 million.
  1. The respondent brought proceedings to have the adjudication decision declared void. It alleged that the contract in question was not for “construction work” within the meaning of s 10 of the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”), and therefore the adjudication decision was vitiated by jurisdictional error.  Construction work is defined by BCIPA to include “dismantling of buildings or structures, whether permanent or not, forming, … part of land”.  The primary judge held that the dismantling of the plant was not “construction work” under a “construction contract”, and consequently the adjudication decision was void for want of jurisdiction.[2]  Her Honour’s conclusion on the issue of jurisdiction was, in summary:
  1. “land” in s 10 of BCIPA does not include mining leases;
  1. the plant may have formed part of the mining leases; and
  1. the plant did not “form part of land” within the meaning of s 10.
  1. The appellant submits that the primary judge erred in concluding that:
  1. the meaning of the phrase “forming, or to form, part of land” in s 10 imports the common law doctrine of fixtures, which requires an investigation about the objective intention of certain parties at the time when the building or structure was constructed; and
  1. because the mining plant was on land over which mining leases had been granted, it did not, for the purposes of s 10 of BCIPA, form part of the land to which it was physically affixed.

It contends that nothing in BCIPAsuggests that the legal ownership of land or other legal bases under which land is held or occupied, for example under a lease or licence, is relevant to the making of a claim for a progress payment.

  1. The respondent contends that s 10 imports concepts and tests from the common law relating to fixtures.  The appellant replies that BCIPA is not concerned with real property law about fixtures.  It is not concerned with who owns land, but with ensuring that a person who undertakes construction work is able to recover progress payments for it.  According to the appellant, the terms and context of s 10 suggest that the words “forming, or to form, part of land” call for a practical inquiry about the physical relationship between the thing and land.  It is not concerned with whether other parties, with whom the parties to the construction contract may have no knowledge or association, intended the thing to form part of the land.  That inquiry is relevant to the law of real property about ownership of fixtures.  It is not imported into s 10.
  1. The appellant submits that whilst a mining lease may not be legally categorised as “land”, the physical “land” on which the building or structure is constructed does not change its character by reason of the existence of a mining lease.  Also, according to the appellant, the fact that land upon which a mining lease is granted may be land upon which construction works form part is reinforced by s 10(3), which states that despite subsections 10(1) and (2), “construction work” does not include certain forms of mining activities.  The appellant also relies upon s 10(2) which declares that “construction work” includes building work within the meaning of the Queensland Building Services Authority Act 1991 (Qld) (“the QBSA Act”).

The issue

  1. The substantial issue raised by the appeal is whether the phrase “forming, or to form, part of land” in s 10(1) of BCIPA should be interpreted in the context of that statute by reference to rules about fixtures in the law of real property.

Section 10 and its context

  1. The purpose of BCIPA is to ensure that a person is entitled to receive, and is able to recover, progress payments if the person undertakes to carry out “construction work” under a “construction contract” or undertakes to supply related goods and services under a construction contract.[3]  BCIPA is intended to provide “a speedy interim solution to progress payment disputes arising under construction contracts”.[4]  The statute’s scheme has been summarised elsewhere.[5]  BCIPA applies to a “construction contract” which means a “contract, agreement or other arrangement under which one party undertakes to carry out construction work for, or to supply related goods and services to, another party.”[6]  The term “construction work” is defined by s 10:

10Meaning of construction work

(1)Construction work means any of the following work—

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

(b)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for 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, airconditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems;

(d)the external or internal cleaning of buildings, structures and works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension;

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

(i)site clearance, earthmoving, 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;

(f)the painting or decorating of the internal or external surfaces of any building, structure or works;

(g)carrying out the testing of soils and road making materials during the construction and maintenance of roads;

(h)any other work of a kind prescribed under a regulation for this subsection.

(2)To remove doubt, it is declared that construction work includes building work within the meaning of the Queensland Building Services Authority Act 1991.

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

(a)the drilling for, or extraction of, oil or natural gas;

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

  1. Nothing in BCIPA gives a claimant any right or interest in the land upon which construction work takes place.  Its focus is on the existence of a construction contract for construction work.  A contractor entering into a construction contract may not know the nature of the legal title over the land on which the work is to be performed.  Generally, it is irrelevant to the performance of contractual obligations.  In some cases, including large projects, a claimant subcontractor may not know the identity of the principal.  It may not know whether the principal and the owner of land upon which a structure is to be erected are identical.  If it knows that they are different parties it may not know about their intentions and their respective legal rights.  A subcontractor may not know whether other parties intend that a structure be owned by the owner of the land.  A contractor which is engaged to dismantle a structure many years after it was constructed may not know what certain parties intended at the time of the construction.
  1. If the respondent is correct then, before being able to make a payment claim under BCIPA, the contractor would need to investigate the objective intention of parties with which it had no association or knowledge, rather than address the practical question of whether a structure was to form part of land, for example by being fixed to it, or, in the case of demolition work, whether it presently forms part of land.  According to the appellant, s 10 uses ordinary words and the purpose of the statute is advanced by adopting their ordinary meaning.  The issue of whether a thing forms part of land is answered by considering its physical relationship with land, and one practical inquiry is to ask whether the subject of the work is to be fixed to the land.  The respondent advances a number of arguments about why s 10 imports the technical, legal meaning of “land” and the law about whether a fixture forms part of land.

The ordinary meaning and the legal concept of land

  1. The respondent submits that the ordinary meaning of “land” and the question of whether something forms part of it is displaced, and that s 10 imports both the legal concept of land and the law of real property which treats certain structures and other objects as “forming part of the land”.  It is not immediately apparent why, in the context of a statute which relates to interim payments for the carrying out of construction work, and not real property, rules about the ownership of fixtures are imported.  When a word or term is used in a statute it should not be assumed it is used simply and exclusively in its technical, legal sense, rather than according to its ordinary meaning.[7]  The context in which a word or term is used and the purpose of the statute may determine whether it has its ordinary meaning or is used in a technical or legal sense.  Sometimes where words have acquired a legal meaning, they should be understood in that sense.[8]  However, it is important to resist a lawyer’s inherent tendency to equate words which have their ordinary meaning with words which have a technical legal meaning.
  1. As the primary judge observed, the meaning of “land” at common law is far more expansive than its primary meaning in ordinary language. A dictionary definition of “land” is:

“The solid portion of the earth’s surface, as opposed to sea, water.”[9]

  1. At common law and in the context of the law of real property, “land” includes certain things above and below its surface. This is reflected in the maxim that ownership of land carries with it everything both above and below the surface.[10]  The owner of the land is presumed to also own a structure constructed on it and things affixed to it.[11]  A fixture becomes part of the land.  Whether a thing is a fixture depends essentially upon the objective intention with which it was put in place.[12]  In determining the existence of such an intention one looks at all the surrounding circumstances, including the degree of annexation to the land and the function served by that annexation.[13]  Sir Frederick Jordan emphasised that in determining whether a party has title to a thing the court assesses the intention with which the thing is fixed to the land: the question is whether it has been fixed “with the intention that it shall remain in position permanently or for an indefinite or substantial period.”[14]  For example “the fact that the fixing is very slight helps to support an inference that it was not intended to be permanent.”[15]

Following this authority, the primary judge stated that:  “How long it was contemplated that the item would be on the land – whether permanently or for an indefinite or substantial period as opposed to temporarily – is relevant to the assessment of the objective intention with which it was placed on the land”.[16]  The relevant intention need not be that the object should remain in position permanently.  It is sufficient that it is intended to remain for “an indefinite or substantial period” rather than merely “for some temporary purpose”.[17]

  1. Where an item is not attached to the land other than by its own weight, it is generally considered to be a mere chattel, and not to become part of the land. However, even in such a case, if the intention is apparent to make an item part of the land, it becomes part of the land. In Holland v Hodgson, the example was given of blocks of stone, placed one on top of another without any mortar or cement for the purpose of forming a dry stone wall, becoming part of the land.[18]
  1. The respondent submits that the Parliament must be taken to have legislated against the background of the general principles of the common law. The term “land” is described by the respondent as “one of the building blocks of the law of property” and, being a term with an accepted legal meaning, is commonly used in statutes in that sense to define with certainty the ambit of particular legislative regimes.[19]  So much may be accepted.
  1. The issue then is whether in this particular statutory context the legislature should be taken to have not only used the word “land” in its technical, legal meaning but also imported rules about fixtures in the law of real property when it used the words “forming, or to form, part of land.” That issue should be resolved having regard to the subject matter of BCIPA and the context in which the words appear.
  1. The importation of rules about fixtures in the law of real property may be justified in the context of a statute which is concerned with property and its ownership, or statutes which impose obligations, such as an obligation to pay taxes or duties, based on ownership.  The importation of rules about the ownership of property is less compelling in the context of a statute that is concerned with a construction contract, and which is not concerned with the ownership of buildings, structures or other things that result from construction works.  BCIPA is concerned with interim payments for the carrying out of construction work.  It is not apparent why common law rules about the ownership of property should be imported into s 10.
  1. Rather than assuming that the Parliament intended the words “forming, or to form, part of land” to be understood as importing common law rules in relation to fixtures, the Parliament should be taken to have used those words in a sense that enables contractors to ascertain as simply as possible whether BCIPA applies in the circumstances.  The inquiry as to whether a building or structure forms or is to form part of land calls for a practical assessment of the physical relationship between the thing and the relevant land.  It does not call for an inquiry into some stranger’s intention.
  1. I am not persuaded that rules about the ownership of fixtures, despite their adoption in other statutory contexts, should be adopted in interpreting s 10 of BCIPA.

Acts Interpretation Act

  1. The Acts Interpretation Act 1954 (Qld) contains definitions which may be displaced, wholly or in part, by a contrary intention appearing in a statute.  It defines “land” as including “messuages, tenements and hereditaments, corporeal or incorporeal, of any tenure or description, and whatever may be the interest in the land”.  This non-exhaustive definition must also be taken to include the ordinary meaning of land.  The intention of Parliament is that the term “land” has this extended statutory definition unless the context or subject matter otherwise indicates or requires.[20]  A similar definition contained in the Interpretation Act 1987 (NSW) was considered in Re Lehrer and the Real Property Act.[21]  As the primary judge noted, Jacobs J concluded that the definition of “land” in the Interpretation Act was wide enough to include the air space above the soil and the upper floor of a building as a tenement or corporeal hereditament.
  1. The fact that the word “land” has an extended definition by virtue of the Acts Interpretation Act, unless a contrary intention appears, may explain why, for the purpose of s 10 “land” would include the upper floor of a high-rise commercial building.  It does not explain why rules in relation to the ownership of fixtures should be imported into s 10 in determining whether a building or structure forms, or is to form, part of land.  That question might be resolved by applying the ordinary meaning of the word “form”.  The primary judge cited the following two meanings of the transitive verb “to form” from the Oxford English Dictionary:

“… 6a.  To be the component or material of; to go to make up, to compose.”  and

“… 6b.  To serve for, constitute, to make one or part of.”

  1. If the ordinary meaning is used, then the relevant inquiry is about the physical relationship between the thing and the land. That inquiry may involve some of the considerations that apply in the context of the law of real property, including the degree of annexation and the functions served by that annexation. The words of the statute, according to their ordinary meaning, are not concerned with an intention, and it is difficult to discern why the legislature would have expected a party seeking to rely upon BCIPA to inquire into the intention of a party or parties who it does not know.  The common law of real property is concerned with ascertaining whether a permanent fixing was intended.[22]  The common law rule is that “what is annexed to the land becomes part of the land.”[23]  But this does not justify the importation into s 10 of BCIPA of the notion that a permanent fixing was intended.
  1. BCIPA reallocates financial risk between the parties to a construction contract to which it applies.[24]  Section 10 should be interpreted so that its ordinary words are able to be applied by parties to determine whether or not a contract is subject to BCIPA.  If possible, the statute should be interpreted so that it is capable of being applied in a practical way by parties to a construction contract or a proposed construction contract.  The ordinary meaning of the words in s 10 anticipates a practical inquiry into the physical relationship between an item and land, by asking in the case of s 10(1)(a) whether the building or structure forms, or is to form, part of land.  In the case of the demolition or dismantling of a building or structure, the inquiry is whether the building or structure forms part of land.  The inquiry is into the physical state of things, not the intention of parties at the time the building or structure was constructed, possibly many years earlier.

Contextual usage

  1. The common law rules relate to ascertaining intention, which may be inferred from a matter such as the degree of annexation. The fact that phrases similar to “forming, or to form, part of land” can be found in authorities such as Holland v Hodgson[25] dealing with ownership of land and fixtures does not justify the importation of common law rules in relation to fixtures into s 10.  The meaning of “forming, or to form, part of land” in s 10(1) must be determined in its statutory context.
  1. The immediate context of the words suggest that common law rules were not imported.  Subsection 10(1)(a) refers to “buildings or structures, whether permanent or not, forming, or to form, part of land” (emphasis added).  The inclusion of the words “whether permanent or not” would be unnecessary if the expression “forming, or to form, part of land” imported common law rules about fixtures.  As the primary judge noted, the common law doctrine of fixtures does not require permanence.  It is sufficient if the thing is placed on the land for an indefinite or substantial period rather than temporarily.[26]  By contrast, the statute’s reference to “whether permanent or not” allows the provision to apply to a temporary building or structure, provided it forms part of land.  The respondent submits that the inclusion of the words “whether permanent or not” confirms that “forming part of land” is to be understood in the general law sense in which permanence is not required.  I disagree.  The words permit a temporary building or structure to be the subject of construction work.  This is inconsistent with common law rules.  The inclusion of the words “whether permanent or not” counts against the importation of the common law doctrine of fixtures.
  1. In addition to their immediate context, the words “forming, or to form, part of land” need to be construed in the context of the statute as a whole. As already stated, it is not apparent why rules that apply in the context of real property law in determining questions of ownership should be imported into a statute which deals with contractual relations between parties who may own no interest in the land or the thing that is constructed upon it.

Comparable legislation

  1. The respondent points to the legislative origins of BCIPA, noting that care needs to be taken in applying authorities dealing with English legislation to the Australian context.[27]  BCIPA was modelled on New South Wales legislation, but contains some significant differences.  The 1999 New South Wales legislation adopted certain provisions of the Housing Grants, Construction and Regeneration Act (1996) (UK), however there are significant differences between those two statutes.[28]
  1. Extrinsic material suggests that certain words in the 1996 United Kingdom Act were intended to introduce a simple test of asking whether a thing is fixed or attached to land or attached to something else which is itself attached to the land, rather than importing the law as to fixtures.  However, given the limitations on the reception of extrinsic material as an aid to construction, an English judge in 2001 did not have regard to such material in a case about shopfittings.[29]  His Honour Judge Richard Seymour QC interpreted the words as importing concepts and tests of the law of fixtures.  This single judge decision had not been delivered in 1999.  Therefore, it cannot be supposed that the New South Wales legislature had regard to it and intended to import the law of fixtures, rather than introduce the simple test which commended itself to at least some legislators in the United Kingdom in 1996.  If the New South Wales legislature in 1999 intended the words “forming, or to form, part of land” to have their ordinary meaning, then the Queensland legislature may have followed suit, and not been troubled by a decision by a judge in England. It may have been content that shopfitting work was covered by s 10(2), which has no counterpart in legislation in other jurisdictions.
  1. No decision interpreting the words “form, or to form, part of land” in s 5 of the New South Wales Act as importing the law of fixtures was cited.
  1. The legislative origins of BCIPA do not illuminate whether the Queensland Parliament intended the words in s 10 to have their ordinary meaning or a technical, legal meaning drawn from the law of fixtures.
  1. Little assistance is derived from the interpretation of similar words in Commonwealth industrial legislation.[30]  As McDougall J stated in Musico v Davenport:[31]  “care needs to be taken in seeking to apply decisions on a different legislative scheme.”

Consequences

  1. The respondent accepts that in testing competing constructions of a statute, a court may consider the practical consequences of each construction. However, it submits that this analysis has a limited purpose. It is to test whether, in a particular respect, the statutory language adopted by the legislature truly reflected its objective intention, as revealed by the statute as a whole. To go beyond this limited analysis is said to “risk taking over the function of making policy choices which properly belongs to the legislature”.[32]  The appellant invokes what the respondent describes as “consequentialist arguments from particular examples” of seemingly harsh outcomes that arise because similar work will not always attract the benefits and burdens of BCIPA.  The respondent correctly identifies a flaw with this approach.  On any view, it is easy to find practical examples where identical work receives different legislative treatment depending upon its ultimate location.  Identical cabinet work, for example, may have a different status depending upon whether it is destined for a ship or a shipping company’s city boardroom.
  1. Seemingly arbitrary results are a function of legislation which distinguishes, in the case of s 10(1)(a) and (b) between buildings, structures or works which form, or are to form, part of land, and buildings, structures or works which do not.  For example, it is hard to understand why construction of a massive structure, such as a dragline at a mining site, should fall outside of BCIPA because the dragline moves slowly across land, whereas a small tool shed fixed to concrete footings on the same site would fall within it (subject to the mining lease issue discussed below).  But these seemingly arbitrary results are a function of legislation which draws a line according to whether a thing forms part of land.  The legislature has chosen that criterion to determine the construction work which will attract the benefits and burdens of BCIPA.
  1. In choosing between the competing constructions advanced by the appellant and the respondent it is permissible, however, to have regard to the practical consequences of each construction, including the inconvenience of requiring parties to a construction contract to inquire into the intentions of unrelated parties, and the inconvenience of disputes before adjudicators and courts about the intentions of those parties.
  1. The ordinary meaning of the words in s 10 call for an inquiry into the physical relationship between a thing and land.  It is similar to the inquiry into the degree of annexation which is relevant to determining whether an object is owned by the owner of land because it was erected with the intention that it should become part of the land.  The greater degree of annexation, the stronger the inference is that there was such an intention.  Similarly, the greater the degree of annexation the stronger the case for concluding that the structure forms part of the land according to the ordinary meaning of the word “form” when used in conjunction with the ordinary meaning of land or the extended definition of “land” in the Acts Interpretation Act.
  1. The construction contended for by the appellant does not require a party to an actual or proposed construction contract to conduct investigations to determine the objective intention of a third party in causing an object to be attached to land.  Also, it does not call for an inquiry into the legal title held over the land on which the work is to be performed in order to determine, for example, whether a party has an interest in the land as a lessee.
  1. The construction contended for by the respondent calls for a more extensive, and possibly difficult, inquiry. To know whether or not it has the benefit of BCIPA, a subcontractor engaged by a principal to dismantle or demolish a building or structure would be required to investigate whether other parties associated with its construction many years earlier occupied the site under a licence, and whether they should be taken to have intended the structure to become the property of the owner of the land.
  1. To take another example of the inconvenience of the interpretation contended for by the respondent, a builder who constructs a substantial commercial building, such as an exhibition centre which forms part of land, should be in a position to know if the sub-contract it proposes to enter will be to perform “construction work” for the purposes of BCIPA.  It should not be required to investigate whether the developer of the site intends to demolish the exhibition building in the near future when a high-rise building is constructed by the developer in association with the land’s owner.  The developer and the owner may intend that the exhibition building be owned by the developer and not become part of the land.  Why should a subcontractor be required to investigate and reach a view about these matters, and possibly be involved in a dispute about the intentions of parties with which it has no association?
  1. The objective intention of those parties may be relevant to the ownership of the exhibition building. The ordinary words of s 10 do not make them relevant to the practical inquiry of whether the exhibition building forms part of the land upon which it is constructed.
  1. The consequences of requiring parties to construction contracts to investigate the legal ownership of land, the interests to which it is subject, and the intentions of unrelated parties are inconvenient. So is the potential for disputes about such matters. These inconvenient consequences, whilst not a strong factor, support the appellant’s construction of s 10.

Section 10(2)

  1. According to the appellant, the construction of the phrase “forming or to form part of land” in s 10(1)(a) is assisted by s 10(2).  Section 10(2) declares that “construction work” includes building work within the meaning of the QBSA Act.  The term “building work” is broadly defined in the QBSA Act.  It includes the erection or construction of a building and the term “building” is further defined in the QBSA Act as including “any fixed structure”.  The QBSA Act does not state whether a building is a thing that is intended to form part of land.
  1. I am not persuaded that s 10(2) is of any assistance in construing s 10(1).  The QBSA Act covers a wide array of “building work” subject to a variety of exceptions and modifications.  It is true that s 10(2) does not simply create an additional category of “construction work” which otherwise would fall outside of the “construction work” defined in s 10(1).  This is apparent from the words “To remove doubt” at the start of s 10(2).[33]  Many fixed structures which are subject to the QBSA Act will be structures that fall within the definition of construction work in s 10(1)(a) of BCIPA.  But this practical overlap does not mean that the wide variety of “building work” within the meaning of the QBSA Act assists in construing the words “forming, or to form, part of land” in s 10(1)(a).  The respondent’s submissions on this point should be accepted.

Mining leases and s 10(3)

  1. The land upon which the plant was constructed was subject to mining leases issued under the Mineral Resources Act 1989 (Qld).  The owners of the land are unrelated to the holders of the mining leases.  The primary judge examined the Mineral Resources Act 1989 (Qld) and authorities dealing with comparable statutes in other jurisdictions.  Her Honour’s careful analysis reached the conclusion that the holder of the mining lease was entitled to remove minerals vested in the Crown, but did not acquire any estate or interest in the land the subject of the mining leases.[34]  The mining leases were not “land” within the definition of the Acts Interpretation Act or in accordance with common law principles.  The appellant does not contest this conclusion.  Its submission is that, while the mining leases may not be legally categorised as “land”, the physical land on which the building or structure stood did not change its character by reason of the existence of a mining lease.  The issue simply is whether the plant forms part of the physical land upon which it was situated.
  1. It is unnecessary to canvass other cases relating to construction work on mining sites, including Thiess Pty Ltd v Warren Bros Earthmoving Pty Ltd[35] and HM Hire Pty Ltd v National Plant and Equipment Pty Ltd.[36]  The implication of works being done on mining leases and the fact that a mining lease is not “land” either were not considered in those cases, or not considered relevant to whether the works formed or were to form part of land.  The mining lease point raised in this proceeding is not a bad one because it seemingly escaped the attention of many lawyers involved in BCIPA cases over the years about work performed on land that is subject to mining leases.
  1. Generally speaking, the extraction of minerals can only take place pursuant to a mining lease.[37]  The effect of s 10(3) of BCIPA is that certain kinds of work on areas covered by mining leases which otherwise would fall within the definition of “construction work” in subsections 10(1) and (2) are taken outside of that definition.  The implication is that other kinds of construction work on such land such as the construction or dismantling of structures that form part of land may constitute “construction work”.  The work may be undertaken as part of a mining venture and be authorised by a mining lease.  If such work on land that is subject to a mining lease precluded the building, structure or construction works from “forming, or to form, part of land”, then s 10(3) would have little, if any, work to do.
  1. The appellant contends that if construction work on mining leases did not fall within ss 10(1) and (2), then s 10(3) would be unnecessary and that the respondent’s construction makes s 10(3) redundant.
  1. The respondent replies that, whereas the present case concerns a structure erected by a party who held a mining tenement, without any legal estate or interest in the land, the position is different if the structure is erected by a party who holds both mining and land tenures.  For this reason, s 10(3) is not rendered otiose.  However, this argument does not explain why the legislature should be taken to have intended that construction work on mining sites may fall within BCIPA if a mining lease is held by a land owner, but fall outside of it if it is not.  No policy objective consistent with BCIPA’s purpose could be identified by the respondent to explain such a haphazard operation.
  1. For example, if a mining company engages a builder to construct an office on a site, and the office is to form part of the land which is subject to a mining lease, why should the application of BCIPA to the construction contract depend on whether the land is owned by the mining company, a related company to which the mining lease was granted or a party which is unknown to the builder, such as a foreign investor or a farmer?  The mining lease may not be “land” but this does not alter the fact that the building will be affixed to land and form part of it.
  1. Also, it would be a curious result if a long-standing building, such as a site office, constructed on land that is subject to a mining lease, did not constitute a building that formed part of land during the term of the mining lease, but did so once the lease had expired. On that approach, a builder who undertook its demolition during the term of the mining lease would not be undertaking “construction work” within the meaning of s 10, but would be if it undertook the work after the mining lease expired.
  1. Care must be taken not to reject an interpretation of the Act because seemingly arbitrary results flow from such an interpretation. As noted, BCIPA generates some seemingly arbitrary or anomalous results because of the lines drawn by the legislature. However, it should not be construed so as to produce such haphazard and apparently unintended consequences for builders since they are not consequences which flow from the words of the statute.
  1. The statute should be construed as the appellant submits. On this approach, while a mining lease may not be legally categorised as “land”, the actual land on which the building or structure is affixed does not change its character by reason of the existence of a mining lease. The physical characteristics of the thing that is to be constructed or that has been constructed and the thing’s relationship to the land determine whether it forms part of land.

Conclusion

  1. The appellant’s construction of s 10 should be preferred.  The appellant has established that the learned primary judge erred in the two respects stated in [6].
  1. The fact that the plant was constructed on land subject to a mining lease, and the fact that a mining lease is not “land” within the meaning of s 10 of BCIPA, do not preclude a conclusion that the construction work in this case was the dismantling of buildings or structures forming part of land.
  1. The word “land” in s 10 has the extended meaning contained in the Acts Interpretation Act as well as its ordinary meaning.  The expression “forming, or to form part of land” uses the word “form” in its ordinary sense.
  1. The words of s 10 do not call for an inquiry into whether the plant formed part of land according to common law rules about the ownership of fixtures.  They do not import a requirement that the plant be owned by the owner of the land upon which it was constructed as a result of this having been the objective intention of certain parties.  Requirements of the law of real property about ownership of things affixed to land are not imported into s 10.  Instead, the degree of annexation will be relevant to the issue of whether or not a thing forms part of land.
  1. The plant consisted of:
  1. Four small mixing tanks 7 metres in diameter and 7 metres high weighing approximately 15 tonnes each and two large mixing tanks 10 metres in diameter and 10 metres high weighing approximately 28 tonnes. These mixing tanks were clamped and bolted to concrete slabs.
  1. Five storage bins 6 metres in diameter and 12 metres high weighing approximately 19 tonnes.  The bins were suspended from a steel frame which was set in concrete.
  1. Four bag houses approximately 4 metres square and 6 metres high weighing approximately 9 tonnes.  These were contained within a steel shed framed by structural steel which was bolted to a concrete slab.
  1. A large kiln 4.2 metres in diameter and 62 metres long.  The approximate weight of the structure, including the refractory, is over 300 tonnes.  The kiln was sitting on two steel carry stations bolted to concrete plinths.

The contract, as varied, included the dismantling of a small steel storage shed, silo support structural steel, electrical motor control, soft starts, variable frequency drive panels, over 300 tonnes of structural steel, fabricated stairs, platforms and enclosed ladderways and two kiln baghouses.

  1. The fact that the plant was affixed to the land to stabilise it and to allow its efficient operation does not mean that it did not form part of the land upon which it was constructed. The fact that the plant might have to be removed at some future time did not make it any less a feature of the land upon which it was affixed.  BCIPA extends to construction work on temporary buildings or structures, provided they form part of land.  Accordingly, it may apply to factories, warehouses and industrial plants which have a limited life and which are able to be dismantled.  The treatment and storage plant in this case might be removed towards the end of the mining lease or after it expired.  Until that happened, it formed part of the land upon which it was constructed because of the nature of its construction and the degree to which it was affixed to the land.
  1. The contract between the appellant and the respondent was a contract, agreement or other arrangement by which the appellant undertook to carry out “construction work” within the meaning of s 10 of BCIPA.  The adjudicator had jurisdiction and the adjudication decision was not void for want of jurisdiction.

Orders

  1. I would make the following orders:
  1. Allow the appeal.
  1. The orders made on 25 June 2013 be set aside.
  1. In lieu thereof it be ordered that the application is dismissed and the applicant pay the first respondent’s costs of and incidental to the application, including reserved costs.

As to the costs of the appeal, the first respondent should pay the appellant’s costs of and incidental to the appeal.  After the conclusion of the hearing of the appeal, senior counsel for the appellant indicated that if the appeal was successful it would seek to make submissions on costs.  The notice of appeal seeks costs on an indemnitybasis.  I would direct that any submissions by the appellant in relation to costs should be filed and served by 31 January 2014, and any submissions in reply be filed and served by 7 February 2014.

  1. BODDICE J:  I have read the reasons for judgment of Applegarth J.  I agree with those reasons, and the proposed orders.

Footnotes

[1] I shall refer to the first respondent as the respondent; the second and third respondents having abided the order of the Court and not appeared at first instance or on appeal.

[2] Agripower Australia Ltd v J & D Rigging Pty Ltd [2013] QSC 164.

[3] Building and Construction Industry Payments Act 2004 (Qld) (BCIPA), s 7.

[4] Thiess Pty Ltd v Warren Bros Earthmoving Pty Ltd [2013] 2 Qd R 75 at 101 [104].

[5] Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2012] 1 Qd R 525 at 546-550 [52]-[66].

[6] BCIPA, Schedule 2 dictionary, emphasis added.

[7] TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576 at 583 [14].

[8] Attorney-General (NSW) v Brewery Employees Union (NSW) (1908) 6 CLR 469 at 531; Barker v The Queen (1983) 153 CLR 338 at 341; Director of Public Prosecutions v Le (2007) 15 VR 352 at 362 – 363 [41] - [42] affirmed in Director of Public Prosecutions (Vic) v Le (2007) 232 CLR 562 at 566-567 [5]-[7] and 595 [124].

[9] Oxford English Dictionary (2012) OED at 20 December 2013.

[10] Re Lehrer and the Real Property Act [1961] SR (NSW) 365 at 369-370; Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue (2011) 43 WAR 186 at 221 [205]; Lenz Nominees Pty Ltd v Commissioner of Main Roads (2012) 186 LGERA 58 at 101-102 [311].

[11] Re Lehrer and the Real Property Act [1961] SR (NSW) 365 at 369-370; Commissioner of Main Roads v North Shore Gas Co Ltd (1967) 120 CLR 118 at 127.

[12] TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576 at 585-586 [24].

[13] May v Ceedive Pty Ltd [2006] NSWCA 369 at [74]; National Australia Bank Ltd v Blacker (2000) 104 FCR 288 at 295 - 296 [15] - [16]; Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712; Holland v Hodgson (1872) LR 7 CP 328 at 334-335.

[14] Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712; TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576 at 590 [38].

[15] Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712-713.

[16] Agripower Australia Ltd v J & D Rigging Pty Ltd [2013] QSC 164 at [55].

[17] Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712.

[18] (1872) LR 7 CP 328 at 335.

[19] Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249 at 257-261; Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (In liq) (2000) 202 CLR 588 at 595 [5].

[20] Acts Interpretation Act 1954 (Qld), s 32A.

[21] [1961] SR (NSW) 365 at 370-371.

[22] Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700.

[23] Holland v Hodgson (1872) LR 7 CP 328 at 334.

[24] RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390 at 400-401 [39]-[41], Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd [2013] 2 Qd R 1 at 9-10 [41].

[25] (1872) LR 7 CP 328 at 334 which used the expression “becomes part of the land”.

[26] Agripower Australia Ltd v J & D Rigging Pty Ltd [2013] QSC 164 at [55].

[27] Grosvenor Constructions (NSW) Pty Ltd v Musico (2005) 21 BCL 266 at [18].

[28] These are noted in Bell and Vella “From motley patchwork to security blanket:  The challenge of national uniformity in Australian ‘security of payment’ legislation” (2010) 84 ALJ 565 at 567.

[29] Gibson Lea Interiors Ltd v Makro Self Service Wholesalers Ltd [2001] BLR 407 at 414.

[30] CBI Construction Pty Ltd v Abbott [2008] FCA 1629 at [45]-[49] in which Gilmour J had reference to the degree of annexation and object of annexation in concluding that certain works on a North West Shelf gas project were “arguably structures or works which will form part of land”.

[31] [2003] NSWSC 977 at [51].

[32] Ganter v Whalland (2001) 54 NSWLR 122 at 131 [36]; Turner v George Weston Foods t/as Tip Top Bakeries (Newcastle) [2007] NSWCA 67 at [47]-[60].

[33] Precisely what the words “To remove doubt” add to the meaning of s 10(2) may itself be a matter of doubt: cf Allen v Feather Products Pty Ltd (2008) 72 NSWLR 597 at 602-603.

[34] Agripower Australia Ltd v J & D Rigging Pty Ltd [2013] QSC 164 at [72].

[35] [2013] 2 Qd R 75.

[36] [2013] QCA 6.

[37] Mineral Resources Act 1989 (Qld) ss 6, 6A, 8, 9, 234.

Close

Editorial Notes

  • Published Case Name:

    J & D Rigging Pty Ltd v Agripower Australia Ltd & Ors

  • Shortened Case Name:

    J & D Rigging Pty Ltd v Agripower Australia Ltd

  • Reported Citation:

    [2015] 1 Qd R 562

  • MNC:

    [2013] QCA 406

  • Court:

    QCA

  • Judge(s):

    Holmes JA, Applegarth J, Boddice J

  • Date:

    20 Dec 2013

  • White Star Case:

    Yes

  • Selected for Reporting:

    Editor's Note

Litigation History

Event Citation or File Date Notes
Primary Judgment [2013] QSC 164 25 Jun 2013 -
Appeal Determined (QCA) [2013] QCA 406 20 Dec 2013 -
Application for Special Leave (HCA) File Number: B7/14 20 Jan 2014 -
Special Leave Refused [2014] HCATrans 106 16 May 2014 -

Appeal Status

{solid} Appeal Determined - {hollow-slash} Special Leave Refused (HCA)