Lang0050 Case Study Assessment 3

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LANG0050 ESSENTIAL LITERACY FOR CONSTRUCTION PROFESSIONALS II 2024 STUDENT RESPONSE BOOK ASSESSMENT 3 08 Fall

LANG0050 Essential Literacy for Construction Professionals II 2023 Last amended: February 2023 ACKNOWLEDGEMENTS Contributor: Lauren Champion © Western Sydney University Enterprises Pty Limited 2023 Except as provided by the Copyright Act 1968, no part of this publication may be produced, stored in a retrieval system or transmitted in any form or by any means without the prior written permission of Western Sydney University Enterprises Pty Limited. This workbook is to be used for educational purposes only. Students should not make this publication available commercially, or redistribute it by any technological means. Students must not record lectures or tutorials via any technology unless they obtain the express consent of the lecturer prior to the lecture being given. Western Sydney University The College Nirimba Education Precinct Eastern Road Quakers Hill NSW 2763 Postal address: PO BOX 224 Quakers Hill NSW 2763 Phone: 1300 897 669 Disclaimer If you buy or use this publication you should understand clearly that it has been produced solely for learning purposes. While the author and Western Sydney University Enterprises Pty Limited have made every effort to ensure that the material in this publication is accurate and of high quality, you are expressly advised that you should not rely on the contents of this publication in order to make decisions having legal, accounting, property, financial, investment or similar consequences or for any purpose other than learning. For any purposes other than learning you should first obtain the advice of an appropriately qualified professional. The author and Western Sydney University Enterprises Pty Limited disclaim any liability to any person, whether a student or otherwise, in respect of anything, and the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, on the whole, or any part of, or omission from, the contents of this publication. © Western Sydney University Enterprises Pty Limited 2023 2

LANG0050 Essential Literacy for Construction Professionals II 2023 Western Sydney University ABN 53 014 069 881 is a registered provider under the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS). Provider Number 00917K. Western Sydney University Enterprises Pty Limited ABN 44 003 474 468 trading as Western Sydney University The College (CRICOS Provider Number 02851G | RTO Provider Number 90319) is a wholly owned entity of Western Sydney University. Academic Pathway Programs are delivered by Western Sydney University The College under arrangement with Western Sydney University. Academic Pathway Programs are delivered by Western Sydney University The College under arrangement with Western Sydney University. © Western Sydney University Enterprises Pty Limited 2023 3

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LANG0050 Essential Literacy for Construction Professionals II 2023 Table of contents LANG0050 ESSENTIAL LITERACY FOR CONSTRUCTION PROFESSIONALS II .................................. 4 Assessment 3: Construction report .......................................................................................... 4 The task ................................................................................................................................... 5 © Western Sydney University Enterprises Pty Limited 2023 4

LANG0050 Essential Literacy for Construction Professionals II 2023 LANG0050 ESSENTIAL LITERACY FOR CONSTRUCTION PROFESSIONALS II Assessment 3: Construction report Student name ” Dylan Gil Student number ” 22119492 Teacher(s) name(s) ” Date ” Word count (not including references and this template) ” 909 1. Fill in your personal details in the boxes above. 2. Read the task on the following page very carefully and ensure you follow all instructions. Assessment sections Possible marks you can get Construction report 90 marks Class Participation (Weeks 6–10) 10 marks Total 100 © Western Sydney University Enterprises Pty Limited 2023 5

LANG0050 Essential Literacy for Construction Professionals II 2023 The task You receive the email below from your manager. You are required to respond to your manager by writing a major report on the topic of Security of Payment in the construction industry. The report is highly structured and will involve a case study analysis of Galileo Miranda Nominee Pty Ltd v Duffy Kennedy Pty Ltd [2019] NSWSC 1157 . Get the full document here: https://www.caselaw.nsw.gov.au/decision/5d6f22eee4b0c3247d711925 You are required to: 1. Include the following six (6) sections with subheadings: Aim, Background, Security of Payment, Case Study, Recommendations, References. 2. Include a minimum of five (5) references in the Harvard WesternSydU style. At least two (2) of the references should be reputable legal websites that discuss the case. In addition, other appropriate sources must be used and cited throughout the report. 3. Include at least one (1) graph in the Background section, and at least one (1) process diagram in the Security of Payment section. All figures must be correctly cited and referenced in the Harvard WesternSydU style. They must not be copied from the model report in your Logbook. To: ali.haddad@padco.com.au From: linda.b@padco.com.au Subject: Security of payment — The case of Galileo Miranda Nominee Pty Ltd v Duffy Kennedy Pty Ltd [2019] NSWSC 1157 Hi Ali, As you may be aware, getting paid in the construction industry is often a challenging process. Parties to contracts who wish to be paid on time must be extremely diligent with their paperwork processes and pay careful attention to the law. It is usually a good idea to keep an eye on cases before the courts as these often have implications for contractors such as ourselves. One case I noticed recently is Galileo Miranda Nominee Pty Ltd v Duffy Kennedy Pty Ltd [2019] NSWSC 1157. As a construction contractor, this case, which was decided in the New South Wales Supreme Court, sounds very much like a situation we could find ourselves in one day. Would you kindly study this case and: 1. Generally, outline the current situation in the construction industry (background). You may like to use graphical data to help readers visualise the situation. 2. Give an overview of SOP and summarise the case. 3. Recommend any action that PADCo should take as a result of the findings. Around 1,000 words will suffice. Many thanks, © Western Sydney University Enterprises Pty Limited 2023 6

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LANG0050 Essential Literacy for Construction Professionals II 2023 Linda Type your response below: Case study – Security of payment Galileo Miranda Nominee Pty Ltd v Duffy Kennedy Pty Ltd (2019) NSWSC 1157. Aim The purpose of this paper is to evaluate a recent ruling from the NSW Supreme Court regarding work suspension in the construction sector and offer suggestions for PADCo's next steps. Background Construction companies in Australia are getting ready for a downturn in 2022 following a recent construction boom, according to Architectures Ideas (2022). Australia's building boom is expected to slow down in 2022 due to unsustainable expansion, according to a new analysis from the Housing Industry Association (HIA). Since 2019, when both residential and non- residential development saw a spike, the building industry has been seeing rapid growth. Since 2019, when both residential and non-residential development saw a spike, the building industry has been seeing rapid growth. Figure 1 shows GDP in Construction Australia between 2019 and 2023 https://tradingeconomics.com/australia/gdp-from-construction © Western Sydney University Enterprises Pty Limited 2023 7

LANG0050 Essential Literacy for Construction Professionals II 2023 Figure 1 (Australia Bureau of Statistics 2024) shows the GDP in the construction industry between 2019 and 2023. The Australian Bureau of Statistics (2024) shows the highest rate of GDP was around the 4 th Quarter of 2023 and the lowest was in the 2 nd Quarter of 2020. In the 3 year period between 2020 and 2023, the rate of GDP was on a steady incline. The first quarter of 2020 shows the GDP at 37.7k AUD Million in contrast to the first quarter of 2023 which shows 39.7k AUD Million. The number of GDP was low from the time between 2020 to 2021 staying between 36k to 38k AUD Million and it started to spike after the 3 rd Quarter of 2021 from 37.7k AUD Million to 4 th Quarter in 2023 and 40.8k AUD Million. The data suggests that the GDP was on a drastic decline in 2020 as it was affected by Covid-19 causing construction to come to a halt due to lockdown. Afterwards, with the country's reopening, the GDP began to rise. Security of Payment Nonetheless, due to the significant financial stakes, the majority of Australian jurisdictions have enacted legislation to guarantee payment security. This Act's goal is to ensure that subcontractors and contractors receive payment for the work they have accomplished and that payment is made on schedule. The process is designed to be simple for both claiming and paying. Even though each state's laws vary greatly from one another, every state shares certain components with each other. Figure 2 shows Suspending work under the NSW Schedule of Payment Act 2019 https://www.aandilawyers.com.au/information-centre/guide-to-the-security-of-payment- act-nsw © Western Sydney University Enterprises Pty Limited 2023 8

LANG0050 Essential Literacy for Construction Professionals II 2023 The eight-step Security of Payment process starts with the filing of a claim and ends with enforcement proceedings if the claim is not resolved. Contractors must make sure that all legal criteria in their state are fulfilled and must take great care when documenting their work. It is imperative for contractors to ensure that their documentation meets all state requirements and to be extremely thorough with it. For instance, the principal is required to submit a suitable payment schedule specifying the date on which the claim will be resolved in the second step following the submission of a claim. The Case In a recent ruling, the Supreme Court of Appeal for New South Wales considered whether a contractor had "reasonable cause" to halt work under a contract when the principal declined to pay unpaid interest on past-due progress payments. The case was Galileo Miranda Nominee Pty Ltd v. Duffy Kennedy Pty Ltd [2019]. Here, the project's main person, Galileo Miranda Nominee Pty Ltd ("Galileo"), and contractor, Duffy Kennedy Pty Ltd ("DK"), agreed to pay a lump amount of up to $66 million for the project's design and construction. The $323,000 progress payment that Galileo was supposed to make was three days overdue. DK gained the right to interest as a result. Despite this, Galileo paid the late fee without accruing interest. The balcony height and the omission of the penetration timetable were the two problems that were included in the occupation certificate default notice. Following that, Galileo sent out a "take-out notice" to take the remaining works out of DK's custody. DK questioned the validity of the take-out and default notifications, asserting that the agreement had been terminated by Galileo. The Supreme Court of New South Wales found the premise to be acceptable. By declining to follow instructions with the head certifier's instructions for granting of the occupation certificate, it was discovered that the contractor had betrayed their pledge to do the work with thoroughness. According to the interpretation of section 27(2) of the NSW Act, which grants the contractor the authority to halt work in the case of non-payment, the amount payable is the amount specified in the payments schedule. The interest entitlement under the section is not mentioned. Recommendations First, should PADCo make a request for a notice of default on a payment schedule in an effort to deduct funds. Any schedule must be verified to be in compliance with the Act's requirements. In other words, as per the Supreme Court of New South Wales (26 February 2021) the Payment Schedule ought to furnish people with sufficient information to understand the rationale behind any fund withholdings. In the event that PADCo attempts to withhold payment from a subcontractor, it is imperative that it confirms that the PaymentSchedule furnished encompasses all of the previously mentioned particulars. This is the second and maybe most significant condition. On the other hand, PADCo may find itself in a circumstance akin to Miranda Nominee Pty Ltd v. Duffy Kennedy Pty Ltd [2019] NSWSC 1157. Referencing New South Wales Caselaw 2019, Galileo Miranda Nominee Pty Ltd v Duffy Kennedy Pty Ltd [2019] NSWSC 1157, viewed 18 th May 2024 < https://www.caselaw.nsw.gov.au/decision/5d6f22eee4b0c3247d711925 > Trading Economics , Australia GDP from construction, viewed 17 th May 2024 < https://tradingeconomics.com/australia/gdp-from-construction > © Western Sydney University Enterprises Pty Limited 2023 9

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LANG0050 Essential Literacy for Construction Professionals II 2023 Architectures Ideas 2021, Is Australia’s construction boom coming to an end in 2022, viewed 18 th May 2024 https://architecturesideas.com/australias-construction-boom/ NSW legislation 2021, building and construction industry security of payment Act 1999 No 46, viewed 17 th May 2024 < https://legislation.nsw.gov.au/view/html/inforce/current/act-1999-046 > AANDI Lawyers 2020, Your guide to the Security of Payment Act – New South Wales, Viewed 18 th May 2024 < https://www.aandilawyers.com.au/information-centre/guide-to-the-security-of- payment-act-nsw > © Western Sydney University Enterprises Pty Limited 2023 10