S.H.A PREMIER CONSTRUCTIONS PTY LTD v LANSKEY CONSTRUCTIONS PTY LTD No BS1485 of 2019

The case covers a few key issues.

Background: This Australian case relates to the issue of a payment schedule. Under the Security of Payment Act, each payment claim shall be replied to by the CA with a payment schedule within a specified period. Also, CA cannot issue one payment schedule for multiple payment claims. If no payment schedule is issued, C is entitled to get paid for the payment claimed (even if there is no entitlement under the contract). CA issued a payment schedule for the payment claims as the payment due is “NIL”. So, the C trying to establish that the additional work they executed is a separate contract rather than variations, so he should be paid as no payment schedule was issued for the additional work/separate contract.

 

1)Is the additional work a variation or a separate contract?

1.     Contract- All V to be in writing as directed by the CA (Superintendent in this case)

2.     Email dated 29 August 2017- From C to CA:

“We have noticed some changes like additional freezer room; therefore, are we to proceed on this basis, or is this subject to variation approval”.

3.     Email dated 30 August 2017- From CA of the E to C:

“Should this result in a cost or time impost pls submit a variation which will be processed in the normal manner. Work orders will be raised on all approved variations. No work to proceed without work orders.”

The above email is significant due to the following reasons:

·         Work orders will be raised

·         No work to proceed without work orders

·         Issued by the CA(in the contract superintendent)

·         The project was conducted thereafter in accordance with that direction

·         The director was never revoked

 4.     So, the above email is an affirmation of the work order as a confirmation of an approved variation.

5.     CA issues number of Work Orders

6.     Conclusion- None of the work orders constituted separate contracts. Each was an approved variation.

 

2) Is there a waiver?

 1.     E waived the requirement for strict compliance with the variation provisions

““A party may expressly or impliedly give up its right to insist on a contractual condition. On the evidence, the referee found that that was what the plaintiff had done. By its conduct throughout it had waived a right to insist on strict performance of the conditions of the Contract with respect to the making of claims generally…” (Hammerschlag J in Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1163 [110] )

“According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right by acting in a matter inconsistent with that right.” (Mason CJ in Commonwealth of Australia v Verwayen (1990) 107 CLR 394 at [406]-[407] )

2.     Conclusion - E’s conduct in respect of the approval of the additional work on the contract constituted a waiver of its right based on the following:

·         The email of 23 February 2018 did not direct the first respondent to cease all work

·         E intended the C to continue to make enquiries with respect to the requirements for the roadworks.

 

How to avoid such issues: Make sure the CA issue V only uses a pre-defined format, not via email, etc. As the QS, always ask for the V instruction when certifying the payment.

 

Case: https://archive.sclqld.org.au/qjudgment/2019/QSC19-081.pdf

Note: The article was also published on www.aact.lk

Ceremonies and Cultural Aspects in the Construction Industry

Any construction will occur in a country with a unique culture and traditions. So, there are certain cultural things will take place on construction sites. The contractor may even practice their cultural stuff on the site if the contractor is a foreign company.

Even if we educate in science(s) innovated/ developed in the Western world, there is no issue in practice or adapting our cultural things in our industry.

This article discusses the various events conducted in construction projects in various countries.

Topping out ceremony

A topping-out ceremony is a construction tradition that has been occurring to celebrate project milestones. Traditionally, this ceremony occurs when the final concrete/ final structural beam is raised into place/ when the highest beam is placed/the last roofing piece. This typically includes a party with the participation of the project team and other stakeholders like the Client, media personalities, prospective buyers, etc. This is a good event in terms of marketing for the buyers to communicate that their product is nearing completion. Another historical belief is that Native Americans believed no structure could be taller than the trees, so they placed a tree in the final and highest beam.

 During ceremonies, they place an evergreen on top of the building, which usually stays on top until the building is finished.

 David, states in one of his articles that this has some ancient root. According to him, during the pre-Dark Age(5^th century-11^th century), in the Scandinavian cultures (Denmark, Norway, and Sweden), a tree was placed on top of a new building. The purpose was to appease the tree-dwelling spirits of their ancestors that had been displaced. Further, he states that during the 14th century in England, it was customary to put a yew tree branch at the highest point of the building to keep evil spirits at bay.

 

https://www.oxfordlearnersdictionaries.com/definition/american_english/evergreen

 

 http://www.scientiaproject.monte.nsw.edu.au/post/topping-out-ceremony

 

https://miron-construction.com/blog_entries/what-is-a-topping-out-ceremony/

This article (written by David) also provides more insight into this ceremony. https://www.linkedin.com/pulse/20141106224320-128875744-what-do-you-know-about-the-tradition-of-topping-out/

See the video below of a topping out ceremony.

https://www.facebook.com/watch/live/?ref=watch_permalink&v=3537842272921945

 

Ground-breaking ceremony

A common ceremony in construction projects is ground-breaking (cutting, sod-cutting, turning the first sod, or a sod-turning ceremony). This ceremony aims to celebrate the commencement of the construction project. The ground-breaking ceremony is usually attended by the Client, contractor's management and even politicians and businesspeople to generate interest in the project. During the ceremony, key personnel will break the ground to mark the commencement of construction.

According to Wikipedia, The first documented ground-breaking ceremony occurred in ancient China in 113 BC.

https://en.wikipedia.org/wiki/Groundbreaking

 

 Opening Ceremony

The opening ceremony may include a ribbon-cutting function by a special guest to mark the official opening of a building. The construction team, together with the consultant and client team, will take part in the ceremony. Many distinguished guests, including media personnel, may also be invited to get public attention, especially for marketing. The ceremony

 Apart from those widely spread worldwide, each country has its ceremonies. Below are such ceremonies. These are essential milestones in a construction project.

 Foundation stone laying ceremony

During the ground-breaking ceremony of a larger-scale construction project or even in small-scale residential construction projects before they start the masonry works, certain countries have a tradition of laying the 1st stone ceremonially. In residential projects, the foundation stone is not a cement block or engineering brick we use for the construction but a special block/unit that contains various herbal and other ingredients. However, in larger-scale projects, it may be cement blocks. The ceremony usually consists of religious work, too.

 

Place a special block/unit and cover it with mortar (Location: Sri Lanka)

Source: https://fim.cmb.ac.lk/foundation-stone-laying-ceremony-for-the-new-building-institute-of-indigenous-medicine-university-of-colombo/

 

Traditional religious and cultural activities. (Location: Sri Lanka)

Source: https://fim.cmb.ac.lk/foundation-stone-laying-ceremony-for-the-new-building-institute-of-indigenous-medicine-university-of-colombo/

 

Traditional religious and cultural activities. (Location: Sri Lanka)

Source: https://fim.cmb.ac.lk/foundation-stone-laying-ceremony-for-the-new-building-institute-of-indigenous-medicine-university-of-colombo/

 

Placing a special block/unit and having it covered with mortar by a group of guests. (Location: Sri Lanka)

 Source: https://www.zamzam.lk/foundation-stone-laying-event-for-green-community-experience-centre/

 

Placing a cement block and have it covered with mortar by a group of guests. (Location: Sri Lanka)

Source: https://cmb.ac.lk/foundation-stone-laying-ilc

 

Traditional religious and cultural activities(Location: Sri Lanka)

Source: https://cmb.ac.lk/foundation-stone-laying-ilc

 1St Steel Cut Ceremony

For the first time, I heard about this ceremony some time ago through a LinkedIn post by another professional. Although I am not fully aware of all the ceremony details, it appears that they organize it to celebrate the first ceremonial cut of steel, as the name suggests.

Source: LinkedIn post from Najmuddin Afham (Location: Middle East)

 

Keeping the First Door Frame and Jump over the Door frame.

This marks another ceremony frequently observed in residential construction projects across some regions of the world. In this ritual, a carpenter, attired in white clothing, jumps through the door frame into the house after placing a few of his tools inside the house through the door frame. This event usually unfolds at an auspicious moment determined by local traditions and is further enriched by customary practices.

 See the video below to understand the tradition.

https://www.youtube.com/watch?v=cQd-Km--5r4  (Location: Sri Lanka)

https://www.youtube.com/watch?v=emQg_IfqOWY  (Location: Sri Lanka)

 

Keeping the First Roof Tile

This ceremony is often observed in residential construction projects within certain cultural contexts. During this occasion, the homeowner typically prepares milk rice and other traditional dishes as a celebratory gesture to mark this milestone of the construction project.

 

If you are aware of any similar cultural practices or events in your region, please send me an email containing additional details, including photographs and videos, so that I may enhance and update this article.

 Note: The article was also published on www.aact.lk 

 

 

Interpretation of implied terms and importance of having a well-written IP clause in a construction contract.

With reference to Realestate.com.au Pty Ltd v Hardingham RP Data Pty Limited v Hardingham [2022] HCA 39 case

 

When we draft a contract, we shall make clear the intellectual property, copyright, and moral right obligations. Generally, clients are asking to transfer to them the IP rights created under the contract and grant them a license to use the background and third-party IP rights in connection with the contract.

When licensing the rights, one must carefully consider the extent of such transfer. Especially as the Client may transfer the right to a further party whose terms are not known to the contractor (as happened to REMA in the below-addressed case)

The photographer (REMA) entered into verbal agreements with real estate agencies to supply photographs of the properties. There were no written contracts signed. It was known to the parties that the agencies would upload the photos to a well-known real estate website, i.e., Realestate.com.au Pty Ltd (REA). Under the terms of REA, which agencies accept when uploading photos, REA can sub-license the content as it desires. Under that term, REA granted a license to RP Data Pty Limited (RP Data) (data and analytics property platform). RP Data then reproduced REMA’s photos for use on their platform. REMA sued RP Data for copyright infringement. This further proceeded to the High Court following the Federal Court decision.

The High Court states that:

“a reasonable person in the position of the parties would have known that one of the very purposes of REMA providing the photographs and floor plans to the agencies was so that the agencies could provide them to REA and that the agencies had no real choice other than to accept a term requiring them to provide a license to REA to use the photographs and floor plans indefinitely and to provide them to RP Data” (Para 113)

Therefore, the High Court held that the RP Data did not infringe copyright.

The High Court also refers to the grounds to consider the sub-licensable IP right an implied term.

"Apart from being reasonable and equitable, capable of clear expression and non-contradictory of the express terms of the contract, to be implied, a term must be necessary to give business efficacy to the contract (which will not be satisfied if the contract is effective without it), and it must be so obvious that “it goes without saying” (Para 18)

 

Case:39 (hcourt.gov.au)

Image - https://image.slideserve.com/562333/psychosocial-hazards-n.jpg

 

Note: The article was also published on www.aact.lk