04 Mar 2021

Major projects & construction 5 Minute Fix 70: Qld trust regime, harmonisation and arbitration

By THE MAJOR PROJECTS & CONSTRUCTION TEAM

Get your 5 Minute Fix of major projects and construction news. This issue: Queensland rolls out the first phase of its project trust regime; one step closer to harmonisation with Queensland adopting new model codes of practice, and Federal Court enforces domestic arbitration award via its original jurisdiction.

Project trust accounts: first stage of Queensland's project trusts go live

The roll-out of the first phase of Queensland's new project trust regime has commenced. From 1 March 2021, eligible Government contracts between $1 million and $10 million require project trust accounts. Previously, this cohort of projects required project bank accounts. However, the Queensland Government has now replaced the project bank account regime with a simplified project trust account framework.

From here on, project trust accounts expand their reach rapidly where more than 50% of the contract price is for project trust work:

  • From 1 July 2021: Government and hospital and health services' contracts over $1 million
  • From 1 January 2022: private sector and Local Government contracts $10 million or more
  • From 1 July 2022: Projects with a value above $3 million
  • From 1 January 2023: Projects with a value above $1 million.

Contractors with contracts that are the subject of the previous project bank account regime can elect to transition to the new project trust account scheme in the next 6 months (subject to certain limitations).

Principals and contractors need to be across the new arrangements.

Practice makes perfect: Queensland adopts new model codes of practice

The Queensland Government has reviewed its model codes of practice and approved new versions of 21 model codes of practice (based on the national model codes of practice developed by Safe Work Australia), with effect from 1 March 2021. Queensland's regulatory review is in line with two broader national WHS policy objectives:

  • first, securing a harmonised approach to Codes of Practice across Australia; and
  • second, the ongoing review of the model codes of practice. Queensland's revised model codes of practice accommodate the outcomes of Safe Work Australia's 2018 review of the national model codes of practice.

The Electrical Safety (Codes of Practice) and Other Legislation Amendment Notice 2021 revokes the former model codes of practice and approves new model codes of practice under the Work Health and Safety Act 2011 (Qld) and the Electrical Safety Act 2002 (Qld). The codes of practice provide practical guidance for duty holders to achieve the health and safety standards required by this legislation. Copies of the new codes can be viewed on the WorkSafe Queensland website.

Safe Work Australia's 2018 review was limited to examining the model codes' technical accuracy, usability, and readability. Consequently, we do not anticipate that the revised codes will substantially impact industry practice. We understand that substantive changes will form part of Safe Work Australia's next review cycle. However, affected duty holders should familiarise themselves with the updated codes.

Federal Court relies on its original jurisdiction to enforce a domestic commercial arbitration award

In First Solar (Australia) Pty Ltd, in the matter of Lyon Infrastructure Investments Pty Ltd v Lyon Infrastructure Investments Pty Ltd (No 2) [2021] FCA 109, a single Federal Court Judge, Justice Stewart, allowed for enforcement of a domestic commercial arbitration award in the Federal Court.

This decision is significant because, although the Federal Court provides a pathway for enforcing arbitrations under the International Arbitration Act 1974 (Cth) for international arbitrations, ordinarily, domestic arbitration awards are only enforceable in a state court under the relevant Commercial Arbitration Act.

The plaintiff sought enforcement of the arbitration award through an interlocutory application in the Federal Court as the parties had already commenced relevant proceedings which were subject to a stay order pending the determination of the arbitration. As domestic arbitration awards are ordinarily not enforced in the Federal Court, the plaintiff relied upon the original jurisdiction of the Federal Court. The Federal Court has original jurisdiction in respect of any matter arising under any laws made by Parliament (other than a criminal matter): section 39(B) of the Judiciary Act 1903 (Cth). Justice Stewart was satisfied that the arbitration award was in relation to a matter in which the Federal Court has jurisdiction, because the matter related to claims under the Australian Consumer Law (which is a law of the federal Parliament).

Domestic arbitration awards will continue to be generally enforced in state courts, but it is helpful for parties who are already engaged in Federal Court proceedings to know that such parties may be able to seek enforcement of domestic arbitration awards where the relevant matter invokes the Federal Court's original jurisdiction.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.