Projects & Construction: 2022 Year in Review

As we come to a close on 2022, our Projects & Construction team reflects on the achievements, significant projects and highlights of the year.

 “The last year has seen a continued pipeline of investment in critical infrastructure.  There’s been a noticeable shift in risk allocation and pricing, with many major projects embracing a more collaborative contracting approach which we expect to see continue in 2023.”  

Martin Lovell – Practice Team leader

Industry insights

The construction and infrastructure sector has experienced a year of sustained turbulence, grappling with a number of unique economic and environmental challenges and now heading into the new year grappling with the implications of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, with many EBAs up for renegotiation next year.

A combination of rising material costs, global supply chain disruptions, labour shortages and extreme weather events has continued to test the skills, resilience and profitability of contractors working in the sector.

For projects already on foot, we have seen an uptick in contractual claims for time and cost relief, as contractors seek to minimise the impact of having committed to projects on a fixed lump sum basis prior to encountering the pressures referred to above. For projects in the tender phase, we are starting to see more collaborative contracting models being utilised (for instance, Early Contractor Involvement, alliancing and modified Design & Construct models), together with a trend towards a more balanced risk allocation.

Elsewhere, the Commonwealth Government’s intention to broaden the scope of the unfair contract terms regime under the Australian Consumer Law has the potential to further upend the sector.

These changes will come into effect in November 2023. They will only apply to new contracts, or existing contracts that are renewed or varied.  This transition period is intended to provide business with time to review and amend their standard form contracts to ensure compliance with the updated regime.

In NSW, the government has released three draft Bills for consultation as part of the 2020-25 ‘Construct NSW’ industry reforms. The draft legislation is wide ranging in scope and will impact those operating in the commercial and residential construction sectors.

We expect these Bills will be introduced in Parliament in 2023, and if passed will progressively come into effect from 2024 onwards.

In Victoria, legislation has been passed further extending the timeframe within which certain claims in respect of non-compliant cladding can be made. For claims that would otherwise have become statute-barred between 16 July 2019 and 1 December 2023, they can now be advanced up to 15 years after the date of issue of the occupancy permit or certificate of final inspection. Accordingly, claims that were previously out of time have now been revived by reason of these changes.

In South Australia we saw the State Government move to ease inflationary pressure on local construction businesses with the introduction of “Rise and Fall” clauses in all General Building Contractor contracts awarded by the Department for Infrastructure and Transport.  Head contractors are required to include comparable rise and fall clauses in all subcontracts and supply agreements and to pass on rise and fall related payments.

Team movements

The team welcomed several new members this year including Ben McLeod (Partner) in the Melbourne office and Tautvydas Anusaitis (Lawyer) in our Sydney office. In addition, we celebrated the promotion of Juniper Watson (Special Counsel) in Adelaide, Gareth Gillespie (Associate) in Sydney, and Oliver Radan (Associate) in Adelaide. We are excited to see our team continue to deliver excellent service to our clients.

Significant matters

Throughout the year, we continued to represent and advise our clients, across various industries and issues, including:

Clarke Energy
Advising on its agreement with Alinta Energy to Engineer, Procure and Construct (EPC) a 60MW expansion and upgrade of Alinta Energy’s gas-fired Newman Power Station in Western Australia’s Pilbara region. Clarke Energy also entered into a long-term contract to maintain the facility for Alinta Energy following completion of the EPC works.

Cross River Rail
Advising Hitachi on various aspects of the Cross River Rail Project in Queensland.

ElectraNet SA
Advising on a number of projects including:

• major contracts for the $2.28b SA-NSW electricity interconnector project known as Project EnergyConnect
• delivery of the $320m Eyre Peninsula high-voltage line upgrade project
• 30-year Transmission Connection Agreements for Neon’s Goyder South wind farm project.

SAPgen Pty Ltd
Acting in relation to the proposed Summerfield Renewable Energy Hub in South Australia.

Symal Group
Acting for Symal Group as part of the Nexus consortium for the North East Link project in Victoria and in respect of Inland Rail.

Multigate Medical Projects Pty Limited
Advising and drafting for supply and installation of a very large Automated Distribution Centre at Yenora, NSW with Very Narrow Aisle Racking, Miniload Case Buffer, Multi-shuttle Tote Buffer and Automated Guided Vehicle  Fleet.  Considerable co-ordination of separate contractor interfaces required close consideration.

Penrith City Council
Drafting contracts for and advising on two large commuter carparking stations (1,000 parking spaces in total) and associated facilities, at Penrith (Soper Place) and Kingswood.  The Soper Place Penrith project includes a four story A-Grade commercial building and multi use community facility (931sqm) with public rooftop garden.

Nuance Group
Advising on:

• the grounds on which an arbitration award can be appealed under the Commercial Arbitration Act NSW
• the degree of error needed to be established to have an arbitral award set aside

Appearing before the Supreme Court of NSW and providing submissions on the above issues.

Academy Constructions
Advising on:

• time bars for bring claims minor and major defects under the Home Building Act NSW
• time bars under the Design and Building Practitioners Act NSW
• basis on which claims may be brought under the Design and Building Practitioners Act NSW

Defending proceedings in the Supreme Court of NSW relating to the above issues.

Recognition

The Legal 500 Asia Pacific

In the 2022 edition of The Legal 500 Asia Pacific, Piper Alderman was recognised across 12 areas of law including Construction and Energy (transactions and regulatory). A number of our team members were highlighted as recommended or key lawyers for this category, including Megan Calder, Martin Lovell and Kathryn Walker.

The Best Lawyers in Australia

In the 2022 edition of The Best Lawyers in Australia, 52 of Piper Alderman’s lawyers are recognised across 42 legal areas including the following in our national Projects & Construction team:

• Megan Calder – Construction / Infrastructure Law
• Geoff Emmett – Construction / Infrastructure Law
• Martin Lovell – Commercial Law, Construction / Infrastructure Law, Project Finance and Development Practice, Structured Finance Law
• Karyn Reardon – Construction / Infrastructure Law
• Kathryn Walker – Construction / Infrastructure Law

Doyle’s Guide

In the 2022 rankings for Doyle’s Guide, the firm and members of our Projects & Construction team have been recognised as follows:

• Megan Calder – Recommended Construction & Infrastructure Litigation Lawyer, Victoria
• Ben McLeod – Recommended Construction & Infrastructure Litigation Lawyer, Victoria
• Martin Lovell – Leading Energy & Resources Lawyer, South Australia
• Andrew Robertson – Leading Construction & Infrastructure Litigation Lawyer, South Australia
• Juniper Watson – Construction & Infrastructure Rising Star, Australia

We were also delighted to receive some very kind feedback from clients and contacts during the research process for the legal directories, including:

‘Full service firm that delivers.  Good value, efficient, high quality.’ (Legal 500 Asia-Pacific, 2022)

‘For us, the consistency of the product provided and the availability of Martin and Juniper make them stand out. ’ (Legal 500 Asia-Pacific, 2022)

‘Martin Lovell, Juniper Watson and their team provide fantastic service and a high quality product.  Nothing is too difficult for them and they consistently deliver.’ (Legal 500 Asia-Pacific, 2022)