A leading construction lawyer has urged contractors to ensure they are properly licensed after a series of court decisions impacted the definition of “building work”.
McCullough Robertson Lawyers Special Counsel Alex Power also encouraged parties to building contracts to spend more time on designs upfront to avoid costly delays and disputes.
Mr Power said contractors needed to be aware of whether work they were undertaking required a Queensland Building and Construction Commission (QBCC) licence.
Without the appropriate licence, contractors may miss out on payment or even face disciplinary action or prosecution.
Various Court decisions had considered any fixed structure, such as retaining walls, concreting, plinths, shelters, and undesignated roads on private property, as falling within the definition of building work.
Such work therefore had to be undertaken by a licensed contractor holding a QBCC licence.
Mr Power said some types of fixed structures, like roads for public use, public bridges, bikeways and footpaths, earthmoving and excavating, and work for water reticulation systems, sewerage systems and stormwater drains fell within the list of exceptions to building work.
However, the definition of “building work” was broad and he urged contractors to carefully consider whether any scope of work that they were carrying out might require a QBCC licence.
“The consequence of a contractor entering into a contract to carry out building work, for which it does not hold the requisite QBCC licence, is that the contractor is not entitled to payment under the contract, and may also face disciplinary action or prosecution,” Mr Power said.
“It is very important that contractors ensure that they hold the requisite licence for any building work scope that they contract to carry out, no matter how insignificant that item of building work may be compared to the rest of the work being carried out under the contract.’
Mr Power also urged parties to building contracts to invest more time on planning and designs upfront to avoid some of the issues he was seeing during construction.
He said most building disputes he dealt with arose from inadequate design drawings, under-priced scope and unrealistic timeframes.
The construction industry had also experienced 30 to 50 percent cost increases due to the impact of COVID and overseas wars.
Mr Power, who specialises in construction and major projects, said time blow-outs in construction typically arose because of weather and difficulties obtaining products in the supply chain.
Delays also occurred when building designs were inadequate and this resulted in a lack of clarify around the full nature of the work required.
“I highly recommend spending the time at the start of a job to ensure that the designs are adequately detailed so that delays and disputes are not caused later on,” Mr Power said.
“Principals need to be satisfied that the designs they are providing to contractors are adequately detailed and not subject to substantial change.
“When designs change the contractors will likely put in variation claims and add the cost of having to redesign, reconstruct or order new materials.”
Mr Power said the construction industry was also still dealing with the aftermath of cladding fires in Australia and overseas.
Most Australian states had introduced bans on the problem cladding in the wake of the Lacrosse fire in Melbourne in 2014 and the 2017 Grenfell Tower fire in London that resulted in the deaths of 72 people.
The Lacrosse fire was started by a cigarette and the fire spread rapidly up 13 storeys via the cladding, causing an estimated $5.7 million damage.
The Grenfell Tower fire was caused by an electrical fault and burned for 60 hours, with cladding again blamed for the dangerous spread of the flames.
Queensland figures published on the Safer Buildings Website earlier this year showed that, out of the 71 government-owned buildings first identified as being at risk, 14 remained problematic.
“With respect to privately owned buildings, as of May this year, 18,000 private buildings have been cleared,” Mr Power said
“There are 976 that require a solution to address an identified risk from cladding and another 308 considered at risk. But progress is being made.”
Mr Power said building owners were under pressure from insurers to remove the risky cladding.
“If the cladding is not removed the building might be uninsured,” he said.
“In Queensland whilst the government hasn’t said that owners have to remove the cladding the government has to be notified if there is cladding on the building.
“As a consequence of that, insurers are aware of the (cladding) status of the building.”
