Faculty of Law The Centre for Mining, Energy and Natural Resources Law

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1 Faculty of Law The Construction Law 2 and 5, 6 & 7 December 2016 Programme & Introduction and Phil Loots Short Course Leaders 2016 (selection, arrangement and commentary) The University of Western Australia. These workshop materials are provided for your study purposes only and may not be reproduced. They do not constitute legal advice v1

2 TABLE OF CONTENTS 1. PROGRAMME 2 2. SHORT COURSE COORDINATORS 6 3. INTRODUCING THE PRESENTERS 7 4. LEGAL CONTINUING PROFESSIONAL DEVELOPMENT (CPD) POINTS 8 5. INTRODUCTION Teaching Materials About the course 8 The University of Western Australia Plenary 1

3 1. PROGRAMME Day 1 Friday 2 December 2016 Session Time Session Title Presenters Plenary Registration Introduction Course Introduction, Phil Loots Session Structure of project contracting arrangements, nature of construction contracts and areas of law which most commonly touch construction contracts Break Session Common terms in design and construct contracts (using AS4902 as the basis for discussion); risk allocation and how contracts allocate risk; pricing and different pricing structures Lunch Break Session Contract formation, including early contractor involvement, expressions of interest, invitations to tender, tendering and contract formation (including letters of intent and award) Break Session Small Group Session a contract negotiation focused on the clarifications register. Phil Loots Juliet Taylor C2: Professional Skills 1.5 The University of Western Australia Plenary 2

4 Day 2 Monday 5 December 2016 Session Time Session Title Presenters Session Time to complete obligations, liquidated damages, prevention principle, extension of time regimes (introducing common issues such as causation, concurrent delay, procedural obligations for claims, doctrine of penalties) Break Session Programming software demonstration - use in delay analysis. Stephen Rae Lunch Session Causation, proving delay, proving disruption and dealing with concurrency Afternoon tea Session Small Group Session: delay and disruption of the project (including concurrent events and a missed time bar). C2: Professional Skills 1.5 Phil Loots Juliet Taylor The University of Western Australia Plenary 3

5 Day 3 Tuesday 6 December 2016 Session Time Session Title Presenter Session Variations: valid and invalid variation directions; variation claims when no direction; valuing a variation; role of the superintendent/engineer Break Session Indemnity and insurance provisions, limits on liability, and exclusions from liability (and exceptions to exclusions) Lunch Break Session Completion and practical completion. Defects liability period and liability for defects, warranties and indemnities Break Session Small Group Session: Alleged defect causing plant down-time and loss of production. C2: Professional Skills 1.5 The University of Western Australia Plenary 4

6 Day 4 Wednesday, 7 December 2016 Session Time Session Title Presenter Session Dispute resolution clauses, including expert determinations; introduction to domestic and international arbitration legislation. Phil Loots Michael Feutrill Break Session Security of payments, including the Construction Contracts Act 2004 (WA). The University of Western Australia Plenary 5

7 2. SHORT COURSE COORDINATORS Partner Corrs Chambers Westgarth LLB (Hons), MBA is a partner at Corrs Chambers Westgarth and has practised as a specialist construction lawyer for about 20 years, principally in the resources sector, focused on construction dispute management and resolution. He was partner in charge of Corrs Perth office ( ) and Practice Group Leader of the firm s national Construction Practice ( ). He currently sits on the firm s board. Chris.ryder@corrs.com.au Philip Loots Seconded as Counsel to Wheatstone Project, Western Australia Philip Loots B.Com, LLB, PMD (Harvard) career includes over 40 years legal experience in all fields of the international engineering and construction industry including oil and gas mega projects. His attributes incorporate specialist expertise in risk analysis and management, capital procurement policy, contracting strategies and project implementation. Phil has written books on Construction Law and is joint author, with Dr. Donald Charrett, of Practical Guide to Engineering and Construction Contracts, published in 2009 by CCH. He is Adjunct Associate Professor, Centre of Mining, Energy & Natural Resources Law, Faculty of Law, University of Western Australia, a Statutory Adjudicator in WA and NT, a Fellow of the Australian Centre of International Commercial Arbitration and a Foundation member of DRBA. The University of Western Australia Plenary 6

8 3. INTRODUCING THE PRESENTERS Presenter/facilitator Experience Philip Loots Juliet Taylor See above See above Manager and Lead Projects Lawyer, BHP Billiton Stephen Rae Senior Managing Director, FTI Consulting Michael Feutrill Barrister, Francis Burt Chambers The University of Western Australia Plenary 7

9 4. LEGAL CONTINUING PROFESSIONAL DEVELOPMENT (CPD) POINTS Full attendance at this short course entitles a practitioner to 6 CPD points. Construction Law - December 2016 Competency 1 Competency 2 Competency 3 Competency 4 Practice Management Professional Skills Ethics & Professional Responsibility Substantive Law INTRODUCTION 5.1 Teaching Welcome. This course is taught through eleven plenary sessions and three small-group sessions. The plenary sessions are in the form of lectures interspersed with discussion. They aim to give a broad coverage of the key legal materials and concepts. Small-group sessions will take up a number of problems for more detailed examination in the light of general guidance in the lectures. In the first half of each small-group session participants will divide into syndicates to work up responses to the problems which will then be compared and further discussed in larger meetings in the second half of the session. 5.2 Materials This folder contains a synopsis of the coverage of each plenary session, together with some selected readings. Some of the readings included in the materials are drawn directly from legislation, regulations, reports of judicial decisions and academic writing. Context and language may be unfamiliar to course participants who do not have a legal background, but the lectures will aim to clarify the significance and, where necessary, the meaning of this material. Sample documents are included for study purposes only and are not to be copied or reproduced. Nothing contained in the materials or said during the course constitutes legal advice. 5.3 About the course This unit examines the fundamentals of construction law with an emphasis on their use in the context of resource industry projects. Construction projects throw up some of the most interesting issues in jurisprudence. The University of Western Australia Plenary 8

10 Although at its core, each construction project is concerned with a contract or a series of interrelated contracts, the great complexity of such projects means that those contracts are put to the test in ways that most others are not. Indeed, it is not unreasonable to suggest that the contract is one of the most important assets in the business of both owner and contract (and those who provide services to each). It is the tool by which risks, many of which are very difficult to predict and manage, are allocated and priced. It influences project culture and behaviours which have significant influence on the success of a project. It is also, of course, central to the resolution of disputes, many of which (unlike many contracts in other fields of commerce) are expected to arise. Inevitably, therefore, we will be studying several doctrines of contract law as they apply to construction contracts, some of which, indeed, have their origin or have enjoyed their development because of their importance to construction projects 1. Contract jurisprudence, however, is just the beginning. As we would expect, several principles of equity developed by the Courts of Chancery and now part of our law feature prominently in construction cases 2. Furthermore, given its importance to our economic prosperity, it is not surprising that the Parliament has had occasion to legislate in areas which impact directly or indirectly on the relationship between contractor and principal 3. In an effort to capture the areas of law which most influence the construction industry, we will follow the journey through a hypothetical construction project, from negotiation of the contract through some of the issues which most often arise, to a consideration of dispute resolution of those issues. We have selected a project for the design and construction of a power station for a gold mine in Western Australia. We will ask you to negotiate that contract and consider the risks to be managed (at least in part) and allocated by the contract. We will ask you to consider the myriad of interesting issues arising where the contractor is delayed. You will consider the process by which the principal directs changes to the work described in the contract and where those changes arise from other circumstances (such as unexpected ground conditions). You will consider the issues arising where the contractor s work product is not as it was promised to be (or at least where that is the allegation). Finally, you will consider how to manage the process by which any of these issues are to be resolved if they escalate into a dispute between the parties. The workshop sessions will allow you, not only to become familiar with these issues, but to explore some of the practical issues which participants have themselves experienced in other projects. 5.4 Evaluation 1 Consider, for example, the development of the prevention principle, from its origins in cases like Holme v Guppy (1838) 3 M&W 387 to the seminal cases such as Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 and beyond. 2 The injunction, so often sought in cases involving performance security under construction contracts, is an equitable remedy. Estoppel, also commonly pleaded in construction cases, is another. 3 For example, the Construction Contracts Act 2004 (WA) and the Australian Consumer Law. The University of Western Australia Plenary 9

11 Please complete the evaluation as you move through the course. The University of Western Australia Plenary 10