06 April 2023
23 min read
#Government, #Construction, Infrastructure & Projects
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At the end of last year, the federal government passed legislation to amend the Australian Consumer Law (ACL) to expand and strengthen the unfair contract terms (UCT) regime. The amendments to the UCT regime in the ACL will come into effect on 10 November 2023 (Commencement Date).[1]
The Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 expands the threshold of contracts captured under the ACL, making them subject to the UCT provisions. The bill aims “to strengthen and clarify the existing unfair contract terms regimes to reduce the prevalence of unfair contract terms in consumer and small business standard form contracts”.
The current UCT regime applies to ‘consumer contracts’ and ‘small business contracts’ that are ‘standard form contracts’. The changes will expand the definition of the last two. This may have a cascading effect in the contractual chain on any future project and will impact existing and planned projects, for example:
This article focuses on how the new UCT regime will impact contracts in the construction industry. For more information regarding the amendments generally, please see our previous article here.
Whilst the debate continues as to when a government agency is conducting a business in its general procurement activities and thereby loses the benefit of crown immunity, the UCT regime will apply to many other participants in a project. Where government mandates terms, which when applied downstream may be unfair, the application of UCT may mean that a head contractor has to choose between complying with the head contract requirement to pass the term downstream and avoiding potential consequences of the UCT regime.
The risk of being put in this invidious position may cause some contractors to avoid government work, or avoid using enterprises that fall within the operation of the amended regime as their subcontractors. This is compounded by the fact that in addition to a term being declared void, the courts will have other powers, including the imposition of substantial penalties (structured to deter a view of penalties as merely a cost of doing business), and the making of other orders in connection with the whole contract, including a prohibition on entering into similar contracts.
Where government is keen to provide opportunities to all sizes of enterprises, it cannot assume that the application of crown immunity to its contract means it can ignore the UCT regime in its dealings. This point is not unique to construction projects and would apply to all government procurement.
The ACL currently defines a ‘small business contract’ as a contract for a supply of goods or services, or a sale or grant of an interest in land in the ACL where:
The changes expand the threshold of what would be considered a ‘small business contract’ by including at least one party that:
Only one of the criteria above needs to apply. It is easy to see how this will significantly increase the application of the regime and include many participants in the construction industry, including those on government projects.
Under the ACL, there is a statutory presumption that a contract is a ‘standard form contract’ if alleged by a party (unless proven otherwise). The courts are guided by factors in determining whether a contract is a ‘standard form contract’, such as bargaining power, whether the contract was prepared prior to discussion between the parties, whether a party was given the opportunity to negotiate the terms and whether the contract was presented on a ‘take it, or leave it’ basis. The changes include additional circumstances where a contract could still be deemed a ‘standard form contract’, despite a party having had the opportunity to:
Further, courts will take into account the number of times parties enter into a contract containing the same or substantially similar terms. The more times parties enter into such a contract, the greater the likelihood an inference will be drawn of it being a standard form contract. If parties frequently agree on template contracts containing little to no changes, changes are rarely negotiated and terms are accepted by one party to increase their workflow, these contracts are likely to be considered standard form contracts under the new UCT regime.
Again it is easy to see how this will apply to many engagements of trade contractors in the industry, who are often signed up by head contractors on a standard form with little or no room to negotiate.
Under the UCT regime, a contract term would be considered unfair, if:
Clause 25 of the ACL contains a list of examples of contract terms that may be unfair. This list is not exhaustive and is intended to provide guidance on what terms could be unfair. Some examples in the list are terms that:
These terms are not uncommon in contracts used throughout the industry.
If a court determines that a term is unfair in a standard form contract, that term would be deemed void. The court may provide declaratory relief or grant an injunction with respect to the unfair contract term. The amendments expand the kind of orders the court may make, such as:
The amendments also broaden the penalties for contravention of the UCT regime.
All participants in the construction industry are likely to be affected by the amendments to the UCT regime. It is common for parties in the industry to engage in projects based on standard form contracts which are not always modified or equally weighted for the sake of expedience.
Where government agencies are comfortable that they have the benefit of crown immunity, it is still necessary for those agencies to consider the application of the UCT regime in their dealings in at least the following respects:
If you have any questions about this article, please get in touch with partner Helena Golovanoff.
Authors: Helena Golovanoff, David Kang & Simona Njaim
[1] Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth), s 2.
AAT Bulletin Issue No.6/2023
The AAT Bulletin is a fortnightly publication containing information about recently published decisions and appeals against decisions in the AAT’s General, Freedom of Information, National Disability Insurance Scheme, Security, Small Business Taxation, Taxation & Commercial and Veterans’ Appeals Divisions (27 March 2023). Read more here.
Decisions Reserved
The Court of Appeal maintains a list of matters before the Court for which judgment is reserved (31 March 2023). Read more here.
Snowy Hydro & contractor fined $30,000 after two incidents in Kosciuszko National Park
The warning comes after Snowy Hydro Limited and their contractor WeBuild were each issued with a $15,000 penalty notice by the EPA following two alleged pollution incidents in the Kosciuszko National Park. Read the article here.
First Prosecution under tough building legislation
SSC Group Holdings Pty Ltd is the first developer in the State to be prosecuted under NSW’s Residential Apartment Buildings Act. Executive Director at Fair Trading NSW Matt Press said SSC Group Holdings was convicted and fined $11,000 in the Sutherland Local Court for failing to give an expected completion notice to NSW Fair Trading in an acceptable amount of time. Read the article here.
NSW judge confirmed as head of National Anti-Corruption Commission
Attorney-General Mark Dreyfus has unveiled the first appointments to the national integrity body, with a Court of Appeal judge who headed up the inquiry into alleged ADF war crimes in Afghanistan to be its inaugural commissioner. Read the article here.
Debra Mortimer becomes Australia's first female Federal Court chief justice
Melbourne-based justice Debra Mortimer will become the Federal Court of Australia's first female chief justice, following the mandatory retirement of her predecessor, Chief Justice James Allsop. Read the article here.
Visscher v SafeWork NSW (No 3) [2023] NSWSC 317
ADMINISTRATIVE LAW – judicial review – Supreme Court Act 1970 (NSW), s 69 – where plaintiff seeks judicial review of decision of Full Bench of Industrial Relations Commission of NSW – prohibition notice issued by SafeWork NSW inspector under Work Health and Safety Act 2011 (NSW) – owner/builder building own house – application for external review commenced before Industrial Relations Commission – Commission’s jurisdiction to consider claim of public interest immunity.
STATUTORY INTERPRETATION – construction of Work Health and Safety Act 2011 (NSW) – whether plaintiff a “worker” – meaning of “undertaking” and “workplace”– whether building site a “workplace” – whether owner/builder conducting an “undertaking.”
EVIDENCE – privileges – public interest immunity – notice to produce – documents produced in redacted form – objection to disclosure of identity of person who drew safety risks investigated to attention of SafeWork NSW – whether Industrial Relations Commission fell into jurisdictional error by finding that public interest immunity attached to documents – no jurisdictional error – Industrial Relations Act 1996 (NSW).
Crimes Act 1900 (NSW), s 314; Industrial Relations Act 1996 (NSW); Law Enforcement (Controlled Operations) Act 1997 (NSW); Occupational Health and Safety Act 1985 (Vic); Police Act 1990 (NSW), Supreme Court Act 1970 (NSW); Uniform Civil Procedure Rules 2005 (NSW); Work Health and Safety Act 2011 (NSW); Work Health and Safety Regulation 2017 (NSW).
Hong v Mosman Municipal Council [2023] NSWLEC 1149
DEVELOPMENT APPLICATION – dwelling house – wall height contravention – view sharing – visual privacy.
Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2000; Land and Environment Court Act 1979; Mosman Local Environmental Plan 2012; State Environmental Planning Policy (Coastal Management) 2018; State Environmental Planning Policy (Resilience and Hazards) 2021.
Altre Partners Pty Ltd v Northern Beaches Council [2023] NSWLEC 1145
DEVELOPMENT APPLICATION – proposed dwelling house – Oxford Falls Valley locality – whether proposed development will retain and complement distinctive environmental features of site – whether proposed development is sited and designed to be sympathetic to environmental features such as rock outcrops, remnant bushland and watercourses – whether proposed development is sited and designed to minimise the impact on remnant indigenous flora – whether proposed development is consistent with desired future character.
Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2021; Warringah Local Environmental Plan 2000; Warringah Local Environmental Plan 2011.
Newland Developers Pty Ltd v Tweed Shire Council [2023] NSWLEC 1144
DEVELOPMENT APPLICATION – concept development – stage one development – proposed community title subdivision – site nominated in development control plan as a school site – whether the provision should be varied – strategic provision of school facilities – satisfaction of flooding precondition in local environmental plan – whether there is sufficient detail as to water and sewer servicing – capacity of sewer infrastructure – appeal dismissed.
Civil Procedure Act 2005; Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2000; Local Government Act 1993; State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004; State Environmental Planning Policy (Housing) 2021; State Environmental Planning Policy (Resilience and Hazards) 2021; State Environmental Planning Policy (Transport and Infrastructure) 2021; Tweed Local Environmental Plan 2014.
Dey v Industrial Relations Secretary on behalf of the Department of Communities and Justice (Community Services) [2023] NSWIRComm 1025
EMPLOYMENT AND INDUSTRIAL LAW – Industrial Relations Commission – procedure and powers – application for witness to give evidence by AVL – relevant principles to the exercise of discretion to permit evidence by AVL – application dismissed.
Civil Procedure Act 2005 (NSW); Evidence (Audio and Audio Visual Links) Act 1998 (NSW); Federal Court of Australia Act 1976 (Cth); Industrial Relations Act 1996 (NSW); Uniform Civil Procedure Rules 2005 (NSW).
Neilson v Secretary, Department of Planning & Environment [2023] NSWLEC 32
JUDICIAL REVIEW – public duty – no failure of NPWS to comply with duty in plan of management for Mimosa Rocks National Park – statutory construction of plan of management – no failure of duty to maintain two roads identified for public access – no requirement for NPWS to enable access to mean high water mark – summons dismissed.
CIVIL ENFORCEMENT – no failure of NPWS to comply with duty in plan of management for Mimosa Rocks National Park – statutory construction of plan of management – summons dismissed.
Land and Environment Court Act 1979 (NSW); Protection of the Environment Operations Act 1997 (NSW); National Parks and Wildlife Act 1974 (NSW).
32 The Avenue Hurstville Pty Ltd ATF 32 THE AVENUE HURSTVILLE TRUST v GEORGES RIVER COUNCIL [2023] NSWLEC 1125
Development Consent: mixed-use development – siting of development – solar access – vehicular access – waste management.
Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2000; Georges River Local Environmental Plan 2021; Hurstville Local Environmental Plan 2012; Land and Environment Court Act 1979; State Environmental Planning Policy (Biodiversity and Conservation) 2021; State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004; State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development; State Environmental Planning Policy (Resilience and Hazards) 2021; State Environmental Planning Policy (Transport and Infrastructure) 2021.
Berryman v Murray River Council [2023] NSWCATAD 70
ADMINISTRATIVE LAW – administrative review – Government information – public interest test – balancing the public interest – copyright – whether any fair dealing exception is established – lack of evidence in support of submissions – form of access.
Administrative Decisions Review Act 1997 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Copyright Act 1968 (Cth); Government Information (Public Access) Act 2009 (NSW).
Henderson v SafeWork NSW [2023] NSWCATAD 73
ADMINISTRATVE LAW – administrative review – review of decision to refuse assessor accreditation – high risk work licence – operational experience – applicable standards – application of policy.
Civil and Administrative Tribunal Act 2013; Administrative Decisions Review Act 1997; Work Health and Safety Act 2011; Work Health and Safety Regulation 2017.
SafeWork NSW v Walgett Shire Council [2023] NSWDC 70
CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – duty of employers.
SENTENCING – objective seriousness – deterrence – aggravating factors – mitigating factors – capacity to pay a fine – appropriate penalty – Work Health and Safety Project Order.
SENTENCING PRINCIPLES – no record of previous convictions – good prospects of rehabilitation – remorse – plea of guilty.
Crimes (Sentencing Procedure) Act 1999; Fines Act 1996; Local Government Act 1993; Work Health and Safety Act 2011.
Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council [2023] NSWSC 262
LIMITATION OF ACTIONS – statute limiting recovery of rates paid to Council – Recovery of Imposts Act 1963 (NSW), s 2(1) – limitation period 12 months from date of payment – whether s 2(1) disapplied – challenge to validity of impost, but no recovery claimed under Local Government Act – whether Local Government Act allowed a claim for recovery of overpayment – whether different limitation period specified.
LOCAL GOVERNMENT – rates and charges – challenge to Council’s categorisation of land as “mining land” – consent orders filed in Land and Environment Court – land recategorised as “farm land” – claim for recovery of rates paid to council calculated as for mining land.
RESTITUTION – statutory claim for repayment of rates – action at common law based on restitution – proceedings seeking relief in separate courts – reasonable doubt as to correct court – no abuse of process – defence of Anshun estoppel.
Civil Procedure Act 2005 (NSW); Commonwealth Constitution; Environmental Planning and Assessment Act 1979 (NSW); Interpretation Act 1987; Land and Environment Court Act 1979 (NSW); Local Government Act 1993 (NSW); Recovery of Imposts Act 1963 (NSW); State Revenue Legislation Further Amendment Act 1995 (NSW).
Paul Ramsay Foundation Limited v The Council of the City of Sydney [2023] NSWLEC 1137
APPEAL – development application – consent sought for the extension of a previously approved internal lift to access a roof terrace– site is listed as an item of local heritage significance and assessed as having State heritage significance – impact of the development on heritage building.
Environmental Planning and Assessment Act 1979; Sydney Local Environmental Plan 2012.
Valuer-General v Sydney Fish Market Pty Ltd [2023] NSWCA 52
CROWN LAND – “Crown lease restricted” – Crown land – whether lease granted in 1994 over Crown land resulted in land being “Crown lease restricted” for purposes of Valuation of Land Act 1916 (NSW), s 14I – whether lease a “holding” for purposes of Valuation of Land Act – whether lease granted under Crown Lands Act 1989 (NSW) or Fish Marketing Act 1994 (NSW) – significance of transfer of land in 2006 from Crown to State Property Authority – whether vesting of land in a statutory authority caused land to cease to be Crown land.
STATUTORY CONSTRUCTION – whether lease granted in 1994 over Crown land was exercise of power under Crown Lands Act 1989 or Fish Marketing Act 1994 or both – significance of identity of Minister executing lease – significance of preconditions to exercise of power under Crown Lands Act – whether implied repeal – whether Fish Marketing Act displaced Crown Lands Act – importance of identifying whether in fact Fish Marketing Act conferred power at all.
Aboriginal Land Rights Act 1983 (NSW); Commonwealth Constitution; Constitution Act 1902 (NSW); Crown Land Management Act 2016 (NSW); Crown Lands Act 1989 (NSW); Crown Lands Alienation Act of 1861; Crown Lands Consolidation Act 1913 (NSW); Fish Marketing Act 1994 (NSW); Fish Marketing Amendment (Deregulation) Act 1997 (NSW); Fisheries and Oyster Farms Act 1935 (NSW); Fisheries and Oyster Farms (Amendment) Act 1942 (NSW); Fisheries and Oyster Farms (Amendment) Act 1963 (NSW); Interpretation Act 1987 (NSW); Land and Environment Court Act 1979 (NSW); Property NSW Act 2006 (NSW); Real Property Act 1900 (NSW); State Property Authority Act 2006 (NSW); Trade Practices Act 1974 (Cth); Trustee Act 1925 (NSW); Valuation of Land Act 1916 (NSW); Valuation of Land Amendment Act 2000 (NSW).
Wells v Woollahra Municipal Council [2023] NSWLEC 1141
DEVELOPMENT APPLICATION: dwelling house development in R2 Low Density residential zone – view loss.
Environmental Planning and Assessment Act 1979; Environmental Planning and Assessment Regulation 2021; Land and Environment Court Act 1979; Roads Act; State Environmental Planning Policy (Biodiversity and Conservation) 2021; State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004; State Environmental Planning Policy (Resilience and Hazards) 2021; Woollahra Local Environmental Plan 2014.
SafeWork NSW v BSA Limited (No.2) [2023] NSWDC 73
CRIMINAL LAW – prosecution – work health and safety – duty of person conducting a business or undertaking – risk of death or serious injury.
CRIMINAL LAW – elements of offence – whether defendant owed a health and safety duty – whether there was a failure to comply with that duty – whether the failure exposed a worker to the risk of death or serious injury – manifestation of the risk is not an element of the offence.
PROCEDURAL – reasonably practicable measures – whether the defendant knew of, or ought to have known of, the risk.
PROCEDURAL – sentence hearing – dispute as to facts – dispute as to the existence of risk – dispute as to failure to take reasonably practicable measures to eliminate or minimise the risk – determination of disputed matters upon a sentencing hearing.
OTHER – worker installing Foxtel satellite dish and set top boxes – existing dangerous fault in wiring of house – worker electrocuted when he came into contact with live wires and an earth underneath the house.
Work Health and Safety Act 2011; Work Health and Safety Regulations 2017.
Noubia Pty Limited v Coffs Harbour City Council No 3 [2023] NSWLEC 36
CIVIL ENFORCEMENT – amount of compensation payable for land transferred to local council in 2007 pursuant to condition of development consent – condition requires compensation to be determined in accordance with Land Acquisition (Just Terms Compensation) Act 1991 (NSW) – identification of public purpose – decrease in value of land transferred to local council as result of public purpose – hypothetical purchaser likely to consider hypothetical residential subdivision would be approved – appropriate valuation methodology – compensation awarded in amount sought by applicant.
Land Acquisition (Just Terms Compensation) Act 1991 (NSW).
Regulations and other miscellaneous instruments
Administrative Arrangements (Interim Ministerial Changes) Order 2023 – published LW 28 March 2023
Environmental planning instruments
Canada Bay Local Environmental Plan 2013 (Amendment No 23) – published LW 31 March 2023
Shellharbour Local Environmental Plan 2013 (Map Amendment No 1) – published LW 31 March 2023
Shellharbour Local Environmental Plan 2013 (Map Amendment No 2) – published LW 31 March 2023
Commonwealth legislation
Aged Care Act 1997 03/04/2023 – Act No. 112 of 1997 as amended
Fair Work Act 2009 31/03/2023 – Act No. 28 of 2009 as amended
Taxation Administration Act 1953 30/03/2023 – Act No. 1 of 1953 as amended
Social Security Act 1991 30/03/2023 – Act No. 46 of 1991 as amended
Referendum (Machinery Provisions) Act 1984 29/03/2023 – Act No. 44 of 1984 as amended
Broadcasting Services Act 1992 28/03/2023 – Act No. 110 of 1992 as amended
Commonwealth Electoral Act 1918 28/03/2023 – Act No. 27 of 1918 as amended
Paid Parental Leave Act 2010 28/03/2023 – Act No. 104 of 2010 as amended
Special Broadcasting Service Act 1991 28/03/2023 – Act No. 180 of 1991 as amended
A New Tax System (Family Assistance) Act 1999 27/03/2023 – Act No. 80 of 1999 as amended
Veterans' Entitlements Act 1986 27/03/2023 – Act No. 27 of 1986 as amended
A New Tax System (Family Assistance) (Administration) Act 1999 27/03/2023 – Act No. 81 of 1999 as amended
Data-matching Program (Assistance and Tax) Act 1990 27/03/2023 – Act No. 20 of 1991 as amended
Bills introduced
Ending Poverty in Australia (Antipoverty Commission) Bill 2023 30 March 2023
Constitution Alteration (Aboriginal and Torres Strait Islander Voice) 2023 30 March 2023
Digital Assets (Market Regulation) Bill 2023 30 March 2023
Social Services Legislation Amendment (Child Support Measures) Bill 2023 29 March 2023
Nature Repair Market (Consequential Amendments) Bill 2023 29 March 2023
Nature Repair Market Bill 2023 29 March 2023
Australian Security Intelligence Organisation Amendment Bill 2023 29 March 2023
Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 29 March 2023
Crimes and Other Legislation Amendment (Omnibus) Bill 2023 29 March 2023
National Security Legislation Amendment (Comprehensive Review and Other Measures No. 2) Bill 2023 29 March 2023
Family Law Amendment (Information Sharing) Bill 2023 29 March 2023
Family Law Amendment Bill 2023 29 March 2023
Renewable Energy (Electricity) Amendment (Cheaper Home Batteries) Bill 2023 27 March 2023
Online Safety Amendment (Breaking Online Notoriety) Bill 2023 27 March 2023
Interactive Gambling Amendment (Credit Card Ban and Acknowledgement of Losses) Bill 2023 27 March 2023
Australia Day Bill 2023 27 March 2023
Criminal Code Amendment (Prohibition of Nazi Symbols) Bill 2023 23 March 2023
Productivity Commission Amendment (Electricity Reporting) Bill 2023 23 March 2023
Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.
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