Australian Construction Law Q&A series

Yes, it is possible to sidestep an expert determination clause where there is good reason not to enforce the process, however the starting position is that parties should ordinarily be held to their contractual bargain.

In a recent Supreme Court of South Australian case (Dexus SAHMRI2 Pty Ltd (atf Sahmri2 Trust) v South Australian Health and Medical Research Institute Ltd), the Court considered to what extent a clause in a contract mandating expert determination could prevent a party from commencing court proceedings.  

In this case a party commenced court proceedings without going through the dispute resolution process required by the contract, which included a requirement for disputes to go through expert determination before legal proceedings could be commenced. The other party made an application to the court to stay the proceedings on the basis they had been commenced in breach of the contract.

The Court accepted that the dispute before it was, on the contract, required to be referred to expert determination before litigation.  However, ultimately the court did not grant a stay of the proceedings.

In deciding whether to grant a stay, the court stated that the starting point is that parties should ordinarily be held to their contractual bargain, but that position may yield where there is good reason not to enforce the process, for example where:

• expert determination would only deal with part of the dispute;
• following the agreed process would result in a duplication of effort;
• the dispute was unsuitable for expert determination because it was outside of the expert’s field of expertise or it would not involve the application of specialist knowledge; or
• expert determination was inappropriate or inadequate for the nature of the dispute. 

In this case, the legal proceedings concerned specific performance and mandatory injunctions to compel the execution of leases. The court held that the question of relief in this case was not something an expert could determine and ultimately needed to be resolved by the court. As a result, it was appropriate for the entirety of the dispute to be determined by the court.

The Court noted that expert determination may be well suited to discrete technical questions, but it may be less suitable where the dispute raises broader issues of contractual construction, the characterisation of parties’ conduct, or legal questions such as waiver and estoppel.  It may also be less appropriate where the relief sought is something only a court can finally grant, such as specific performance or mandatory injunctive relief.  

The decision illustrates that while expert determination agreements cannot simply be ignored, they do not operate with automatic force. 

Yes, but proceed with caution. If your tool removal is too significant, it might be seen as evincing an intention to no longer complete the works which can constitute repudiation. We recommend first looking at remedies available under the contract and legislation to secure payment.
 
You should always check the terms of your contract, but usually if they are your tools and equipment (not Principal-supplied plant, materials and equipment) then you are free to do with those items as you please. Moving tools and equipment around can constitute business-as-usual activities.

However, if you aren’t getting paid under the contract, we recommend you look for other remedies before demobilising plant and equipment. For example, depending on the facts and circumstances of the non-payment, the particular clauses of your contract, and the applicable security of payment legislation in your State or Territory, you may have the right to suspend works, charge interest, apply for rapid adjudications, or utilise other swift processes under your dispute resolution clause such as determination of claims by the superintendent, mediation, or expert determination.

The reason caution should be exercised before removing tools and equipment from site in circumstances where you aren’t getting paid is because, if the Principal sees a correlation between failing to pay and you taking your tools off site, you are arming them with factual information that may prejudice you down the track. For example, when a contractor starts taking a significant amount of tools and equipment offsite, that could be characterised as evincing an intention to no longer complete the works which may constitute repudiation. Repudiation has significant consequences, such as allowing the other party to elect to accept your repudiation and terminate the contract.

Whether conduct amounts to repudiation depends on what that conduct, viewed objectively, signifies to a reasonable person.

Whether removing your tools and equipment off site amounts to repudiatory conduct will depend on the specific facts of each case. In light of this, we recommend seeking legal advice before doing so in circumstances where you aren’t getting paid and to get guidance on other options that may be available to you to secure payment under the contract.

Common interest privilege allows you to share privileged information with third parties without waiving the privilege. For privilege to be maintained, the communication of the information must be confidential and the parties must share a common legal interest in the subject (i.e. co-defendants in litigation).

Why do you need it?

Common interest privilege allows you to share privileged and confidential information with third parties (who you share a common legal interest) without waiving privilege.

Suppose you are litigating against the Principal and you share the same, non-conflicting, interests in the outcome of the litigation with another contractor (for example, you are both members of the unincorporated D&C Contractor JV). You may want to share privileged communications to discuss strategy. Or in another case, perhaps you wish to share this information with your insurer, one of your subsidiaries or another co-defendant in litigation.

To avoid waiving legal professional privilege when you share the communications, you will need to establish the required common legal interest with the other person so that you share the legal professional privilege that attaches to the communication.

When will you have it?

Common interest privilege is not a separate category of privilege, but rather an exception to the waiver rule. While it is not limited to litigation, common interest privilege generally arises in a litigation context. Its applicability outside of litigation is less certain at common law.

For common interest privilege to exist, the communication or documents you are sharing with a third party must already be protected by legal professional privilege or litigation privilege.

When the privileged document or communication is shared with a third party, for common interest privilege to apply the document must be shared on a confidential basis and both parties must have a common interest in the outcome of litigation or the legal advice. However, the concept of common interest is not strictly defined and we recommend you exercise caution when relying on it.

Whether common interest privilege exists will depend on the facts existing at the time the privileged material is shared. It has been found that common interest does not arise where each party has their own selfish, potentially adverse, interests in receiving the privileged information, or where the interest are not legal but are commercial or financial.

In our example of an unincorporated JV above, we suggest you enter into a common interest deed with the other party/parties setting out your shared legal interest. While this is not conclusive evidence that a common interest exists, it will minimise the risk of waiver when sharing privileged documents between you.

Now! As of 15 April 2026, just about all the amendments to the Building and Construction Industry Security of Payment Act 2002 (Vic) are operative.

The commencement of the new SOPA regime was announced on 14 April 2026, to take effect on and from 15 April 2026. This brings forward the previous longstop date for commencement of 1 September 2026.

The new rules apply even if your contract commenced under the old regime. So, you will need to keep the following in mind if you find yourself in a SOPA adjudication on and from 15 April 2026:

• The concept of ‘excluded amounts’ has been abolished, meaning an adjudicator can consider a wider array of matters when determining the validity of a payment claim (including, for example, contractual set off rights).
• The concept of a ‘claimable variation’ has been abolished, meaning an adjudicator can consider amounts referable to a variation even if that variation has not been agreed in writing.
• If responding to a payment claim, you must provide all relevant reasons in your payment schedule – it is no longer possible to supplement these reasons in an adjudication response.
• An adjudicator may decline to enforce a time bar which is deemed to be unfair (including, for example, where it is unreasonably onerous for the contractor to comply).   
• The concept of ‘reference dates’ has been abolished, meaning claimants can now submit one payment claim per month (referable to work undertaken during the specified month), and one payment claim on or following the termination of a contract.
• If seeking recourse to security, you must notify the other party at least five business days prior – even if your contract imposes no notice requirement.
• A claim for the return of security may be served 20 business days after the end of the defects liability period – if your contract specifies a later date for the return of security, that will be of no effect.

There are two amendments which are yet to commence (expected 1 September 2026), which allow an adjudicator to have regard to submissions in support of a performance security claim, and specify when adjudicator fees must be paid.

It can be hard to keep up with ever-changing (and nationally inconsistent) SOPA procedures. If you need assistance navigating the playbook, feel free to reach out and we’d be happy to discuss. 

The term “qualifying cause of delay” is usually a reference to a specific event or events that entitle a contractor to an extension of time to the date for practical completion under a construction contract. The qualifying causes of delay relevant to each construction contract are defined in each particular contract. 

It is a common feature of construction contracts that, in specific circumstances, the contractor will be entitled to an extension to the relevant completion date under the contract. This entitlement will generally arise only where a ‘qualifying cause of delay’ has occurred, being a particular event or circumstance defined in the contract.

Typical qualifying causes of delay can include: 

• Delays caused by the principle or its representatives (including the superintendent);
• Variations;
• Force majeure events, such as acts of war or terrorism;
• Industrial action / disputes;
• Latent conditions; 
• Changes in legislative requirements occurring after the contract date; or
• Inclement weather.

As a matter of contractual risk allocation, the typical position is that the party best able to control a particular risk should bear the time and cost consequences of delay attributable to that risk. Therefore, delay caused by the contractor will not ordinarily constitute a qualifying cause of delay. By contrast, delay caused by the principal will usually be treated as a qualifying cause of delay. This also avoids the operation of the prevention principle, under which a principal may be precluded from enforcing the contractual completion dates where its own acts have prevented the contractor from completing on time. Delays arising from causes beyond the control of either party, often described as ‘neutral’ delays, are commonly the subject of contractual negotiation as to whether they constitute a qualifying cause of delay or not. 

The extension of time entitlements under construction contracts are important because construction contracts will often contain a mechanism where, if completion is not achieved by the required date under the contract, the contractor will be liable to pay liquidated damages (a pre-agreed daily or weekly amount) to the principal for the period of the delay. The entitlement to an extension of time therefore offers the contractor relief from having to pay liquidated damages associated with that delay. 

Not necessarily - privilege will not generally be waived where the privileged material is shared unintentionally, and reasonable steps are subsequently taken to protect its confidentiality. However, prompt action to rectify the inadvertent disclosure is critical.

Privilege can be waived by accidentally sharing a document with the wrong person, however the waiver is not automatic. If you act quickly to rectify the mistake and maintain the confidentiality of the document, privilege will not generally be waived. 

Where you have inadvertently shared privileged material, you should promptly take the following steps to rectify the mistake:

• upon realisation, immediately notify the recipient that the disclosure was a mistake; 
• assert privilege over the information; and 
• request that the recipient destroy the document without reading or copying it. 

It is also good practice to ask the recipient to provide written confirmation that they have destroyed the materials and to keep a record of this communication.

Not necessarily - it will depend on both the character of the ministerial direction and the breadth of your change in law provision.

If your contract defines ‘Law’ or ‘Statutory Requirement’ narrowly (i.e., by reference only to statutes and regulations), a ministerial direction will not trigger the provision. If your definition is broader than that (as many are) and includes wording such as orders, decrees, directives, subordinate instruments, delegated legislation and proclamations, it is likely that a ministerial direction will trigger your change in law provision.

A change in law provision allocates the risk of legislative or regulatory changes that may occur throughout the life of a contract. A typical change in law provision will define what constitutes a change, oblige the parties to comply with the change and entitle the contractor to claim for the extra time or costs required to account for changes to the scope of works caused by the change in law.

In deciding whether a change in law provision has been triggered, the label ‘ministerial direction’ is not decisive. What matters is whether the direction is a binding legislative instrument, and if the direction is captured by the wording of the change in law provision.

Ministerial directions are issued in respect of specific legislation. The legislation the direction is made under will typically, but not always, state whether the direction is or is not a legislative instrument. For example, under section 23 of the Liquid Fuel Emergency Act 1984 (Cth) (the Act) the Minister may give a direction to corporations regulating or prohibiting the supply of liquid fuel. If your definition of ‘Law’ or ‘Statutory Requirement’ includes words like ‘delegated’, ‘subordinated’, or ‘secondary’ legislation, then it is likely to pick up a ministerial direction under this section (or sections like it).

Even if not stipulated, a ministerial direction will still be construed as a legislative instrument if the direction alters the content of the law.

Note that a change in law is not an automatic entitlement to relief. Typically, to be entitled to time or cost relief, you will need to be able to show that the ministerial direction caused:

• an increase in cost;
• delay; or
• an inability to perform.

The industry finds itself in a complex situation, and legislative intervention may be on the cards as the situation develops.

Yes - you are generally responsible for the acts of your agents, provided they were acting within the scope of their authority.

At common law, an agent is a person who acts in a representative capacity for you and in your interests. If you are a principal, this would include the project’s superintendent when they are performing contract administration actions on your behalf. However, in most cases this will not include your subcontractors.

You will generally be liable for the acts of your agents provided they were acting within the scope of their authority. This includes liability for torts or breaches of contract committed by the agent in the course of their duty.

Importantly, the scope of your agent’s authority includes not only the express authority that you have given in words or writing, but also the authority to do things incidental or necessary to carry out that express authority (implied authority). This authority is referred to as their “actual” authority. Further, the scope of their authority includes the authority that you (or your agent, provided you have allowed them to do so) hold them out as having i.e. authority that a third person reasonably believed the agent has based on your actions, even if no actual authority exists. This is referred to as their “apparent” or “ostensible” authority. You are generally responsible for your agent’s acts within both their actual and apparent authority.

Coupled with your responsibility for your agents’ actions is the fact that, unless specifically excluded in a contract between you and your agent, you must also indemnify your agents against all liabilities incurred in the reasonable performance of their agency.

No - where performance becomes impossible due to circumstances outside of the parties’ control, the contract may be “frustrated” and the parties discharged from their future obligations under the contract.
 
In Australia, the law recognises that circumstances exist where it would be unfair for parties to be required to perform their contractual obligations because factors outside of their control have made it impossible to do so. In these circumstances, the doctrine of frustration discharges the parties from their future obligations under the contract.
 
A contract is frustrated where, without the fault of either party, events occur that cause performance under the contract to be radically different to that which was completed at the time the contract was made. For example, this can occur where the parties have contracted on the basis that their bargain would be performed in a particular way, and that method of performance is no longer possible. Courts have used terms such as “radical change”, “a thing different in substance”, “fundamentally different” or an event depriving a party of “substantially the whole benefit which it was the intention… that he should obtain”.

However, the doctrine of frustration is difficult to establish and will only be applied narrowly by the courts. Events such as hardship, inconvenience or material loss occasioned by being required to continue to perform the contract are generally not sufficient to frustrate a contract. For example, if the contract is for the delivery of goods and the normal or planned transit route is no longer available but the goods can still be delivered by taking a longer and harder route that would increase the seller’s costs, it is likely that the contract will not be frustrated. This is because performance is deemed possible despite being inconvenient. Further, a “bad bargain” or expectations that did not eventuate do not amount to frustration as these are risks that are inherent in contracting.

A term is essential when it is of such importance to the parties that they would not have entered into the contract without being assured of strict or substantial performance of that term.

A term in a contract is considered essential when it goes to the root of the contract. This will be the case where a contractual term is so important to a party that they would not have entered into the contract unless assured of strict or substantial performance of that term, and the other party knows or should have known this to be the case. The party’s intention that the term was to be essential can be determined through express words used by that party, or by considering the term in the context of the contract as a whole.

A term is likely to be essential where any kind of breach of that term would result in serious consequences for the other party, so that it effectively deprives the other party of “substantially the whole benefit” of entering into the contract. Further, a term is more likely to be essential if it is determined that damages would not adequately compensate the aggrieved party for a breach of the term.

A breach of an essential term can give rise to the right to terminate the contract. As a result, if a breach of the term is likely to occur, it is less probable that the term is an essential term on the basis that the parties are less likely to have intended for such a breach to result in the termination of the contract.

A term in a construction contract stating that “time is of the essence” is a widely accepted example of an essential term.

A project is largely complete once Practical Completion (or its equivalent) is reached. However, it is not until the Certificate of Final Completion (or the like) has been issued that your obligations to carry out the works, and the Principal’s obligation to pay you, have been discharged – that is, the project has finished.
 
There are generally two key concepts or milestones in construction contracts which mark completion – “Practical Completion” and “Final Completion”. Most construction contracts incorporate this general distinction though they may not use the same terminology.

In the case of the Practical Completion, the Superintendent, Independent Certifier or other designated party will issue a ‘Certificate of Practical Completion’ when the works are complete except for minor defects which do not impair the operation / functionality of the works.
 
However, while the works may be practically complete when this certificate is issued, the project is not actually finished until the defects liability period has ceased and defects are rectified. It is at this point in time when you will be issued with what is often called a ‘Certificate of Final Completion’. This will commonly be accompanied by a release of any remaining security the Principal holds. The Certificate of Final Completion signifies that your obligations to carry out the works, and the Principal’s obligation to pay you, have been discharged. That is, the project has finished.
 
In some cases, Practical Completion and/or Final Completion may have quite prescriptive requirements beyond those we have identified, which you will find in contractual definitions or the operable completion clauses.

No, not necessarily. If you have a security interest in something other than land – for example, materials procured by the subcontractor for incorporation in the works – your interest may not be ‘secure’ if you have not registered it on the Personal Property Securities Register (PPSR).

The default position under section 55 of the Personal Property Securities Act 2009 (Cth) is that a perfected security interest (i.e., one that is registered on the PPSR) has priority over an unperfected security interest. For example, if the subcontractor becomes insolvent and enters liquidation, your claim to the property subject to your security interest (or funds from its sale) will rank behind someone else who has registered their own security interest in that property.

But, beware the risk of taking your time! If someone else has a security interest in personal property (e.g., your subcontractor’s financier has security over all of your subcontractor’s present and after acquired property) and they register that interest on the PPSR before you register your own, the default rule says their interest will have priority over yours.

The takeaway? Register your interests as soon as you can, otherwise you might not be as secure as you think.

If the arbitration clause is valid and binding and the dispute is within the scope of the clause, you must go to arbitration. There might however be an exception if you are seeking urgent interlocutory relief from a court.

An arbitration clause is a dispute resolution provision in a contract that requires parties to resolve disputes through arbitration rather than through court proceedings, or some other process. These clauses are commonly used in construction contracts.

Arbitration clauses are often legally binding, which means that if the dispute that has arisen falls within the scope of the clause, you will not be able to go to court. In most modern construction contracts, arbitration clauses define dispute broadly and therefore tend to capture most if not all of the disputes that are likely to arise in connection with the contract.

Arbitration clauses are often considered to be independent of the main contract, which means that they remain enforceable even if the main contract is invalidated.  In some rare cases, the arbitration clause itself might be invalid and therefore not enforceable (in which case you can refer the dispute to court). However, to establish that the clause is invalid is a very high bar.

No, you cannot contract out of the various security of payment legislation which is in place in all Australian jurisdictions.

Security of payment legislation has been implemented across all Australian States and Territories. The various security of payments laws and regulations are designed to promote efficient cash flow for payments within the construction industry. They do this by establishing statutory rights to make payment claims, imposing payment timeframes and providing rights to have payment dispute speedily resolved (on an interim basis) by adjudication in accordance with the relevant legislation.

In all States and Territories, the relevant security of payment laws cannot be contracted out of. Parties are unable to exclude, modify, or restrict the operation of the relevant legislation within their contract, and any clause within an agreement that attempts to do so will generally be void and have no effect.

Yes. Generally you can sue a joint venture, but the type of joint venture – ‘unincorporated’ or ‘incorporated’ – will determine how you do this.

A joint venture typically refers to a commercial arrangement where multiple parties collaborate on a specific project or business opportunity (rather than operating as an ongoing business), share resources and form a contractual association to achieve a common goal. Joint ventures can take many forms, including being incorporated or unincorporated.

If a joint venture is incorporated, it forms a separate legal entity and can sue and be sued independent from its members. You can therefore bring the action against that incorporated joint venture entity, rather than the individual members that sit behind it.

However, if a joint venture remains unincorporated, you typically sue the individual members directly as there is no separate legal joint venture entity to sue. Although it depends on the specific terms of the contractual arrangement, most commercial joint venture agreements provide for joint and several liability of each of the members. If this is the case, you can either sue all of them together for the full amount, or any one of the members individually for the entire loss.  

Force majeure is a creature of contract and catastrophe is not necessarily required.
 
A ‘force majeure’ clause can stipulate that any event, no matter how insignificant, can be sufficient to trigger the stated remedies.
 
As the qualifying force majeure events are defined within the contract itself, it is entirely up to the parties to determine which events will be eligible force majeure events in their particular contract. Ultimately, force majeure clauses are just a tool to allocate risk for the occurrence of certain events in a contractual arrangement.

To ensure a force majeure clause will be enforceable, parties need to specify which events qualify and the provisions of the contract that will apply if the events occur. The description of the events should be as specific as possible to avoid future disagreement about your counterparty’s interpretation. Whilst that description can, and often will, include ‘catastrophic’ events like a freak storms or global conflict, you can agree for the terms of these clauses to apply when less catastrophic events pop up that still impact on the project.

No. A remedy which operates as a penalty is unenforceable.

When a contract is breached, the law states that the wronged party should only be put into the position they would have been had the contract been correctly performed. As a result, clauses in a contract that are included for the purpose of penalising a party for their breach will be invalid. This is true even if both parties have agreed to be bound by that penalty clause.

When assessing whether the clause operates as a penalty, the courts will ask is whether the damages stipulated in the contract are ‘out of all proportion to the interests of the party which it is the purpose of the provision to protect’.

The courts do recognise that the parties to a contract are in the best position to estimate the financial impact of a specific breach. Accordingly, clauses which are a genuine pre-estimate of the damage likely to be caused by a breach will generally be valid and enforceable, especially if the clause has a strong commercial justification. Further, the estimate is an estimate of the likely damage at the time of entering into the contract. If circumstances change so that, at the time of the breach, the amount is not reflective of the actual loss, it will still be enforced by the courts if it was a genuine pre-estimate at the time the contract was signed.

Not always. It depends on the field, but experience counts!

Usually, a witness can only speak to their direct knowledge of things they experienced firsthand and cannot provide their opinions. However, when a person has specialised knowledge or experience, they can provide their expert opinion when giving evidence on subjects that are within their area of expertise.

Depending on the subject area, formal qualifications are not always required. A court can accept that a witness has specialised knowledge in a field that has been gained through training or extensive experience alone. However, in highly technical fields, formal qualifications are likely to be needed in addition to extensive experience.

Some experts are independent, external witnesses appointed (usually by lawyers) to prepare a report and provide an opinion based on a set of facts and assumptions. In a construction context, many project team members can also provide expert opinion evidence based on their training and experience – but you should keep in mind that this evidence is not independent and might be given less weight than an independent expert’s report.

Yes, but only if the email is sufficiently clear and formal and complies with all obligations of the contract in relation to issue and form.

First and foremost, a certificate of practical completion must comply with the requirements of the contract. If the contract prescribes that the certificate must be issued in a form that is not an email, you cannot certify practical completion by email.

However, if the contract is not prescriptive on form, an email may be acceptable. The test is whether, in the circumstances in which it is provided, the email is understood, viewing the matter objectively, to be certifying practical completion. What is certain is that the email will need to be clear and unambiguous (so that the parties are not left in doubt) and adopt suitably formal language (J Hutchinson Pty Ltd v Transcend Plumbing and Gas fitting Pty Ltd [2023] VSC 39).

For an email to function as a certificate of practical completion, it will help if it:

• expressly identifies that it is a certificate of practical completion;
• clearly states what the relevant date or dates are (for example, where there are separable portions of the works);
• makes formal assurances or confirmations in relation to facts in an authoritative manner; and
• is a single email (rather than part of a longer chain).

It is very unlikely. Most Australian jurisdictions now impose Christmas/New Year blackout periods in their security of payment regimes, with Victoria set to adopt one in 2026.

During the Christmas period, the NSW, ACT, SA, TAS, NT, QLD and WA security of payment regimes all operate blackout periods by excluding certain dates from the definition of “business day”, on top of the usual public holidays. This means that timeframes under the various security of payment regimes in these jurisdictions are paused, preventing respondents from being ambushed during the following periods:

• New South Wales, the ACT, South Australia and Tasmania: 27–31 December;
• Northern Territory: 25 December to 7 January;
• Queensland: 24 December, 27-31 December and 2-10 January (noting the days that fall in between are already excluded as public holidays); and
• Western Australia: 22 December to 10 January (however note that contracts entered into before 1 August 2022 are still under the old WA security of payments regime which imposes a shorter blackout period running from 25 December to 6 January).

Victoria is the only outlier. Its current legislation excludes only weekends and statewide public holidays from the definition of “business day” However, the Victorian Government has endorsed amendments to the current legislation which include excluding the period from 22 December to 10 January from the definition of “Business Day”. These amendments will take effect from 1 September 2026 and will apply to construction contracts irrespective of when they were entered into.

Maybe, so proceed with caution. There is no clear line between permissible scoping and repudiation and the answer will depend on what you are actually doing, viewed objectively and what it signifies to a reasonable person.
 
Whether testing the market for alternative contractor/subcontractor options amounts to repudiation will depend on what you are actually doing, viewed objectively, and what that signifies to a reasonable person. This is because “testing the market” is a broad concept and can vary in nature and degree. Further, the courts are yet to consider a case where a principal has scoped alternative subcontractor options, so we cannot say for certain where the line between permissible scoping and clear repudiation lies.
 
Generally, you will repudiate a contract where your words or conduct convey to a reasonable person that you do not intend to be bound by the contract (Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623, 647-8, 664; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115, 135). Your counterparty may then elect to terminate the contract (Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd; McDonald v Denny Lascelles (1933) 48 CLR 457, 469-70).
 
It is likely therefore that speaking to other subcontractors generally about rates and methodology will not objectively show your intention not to fulfil your contract. Formally tendering a works package, on the other hand, may show you intend to give work within your subcontractor’s scope to someone else.
 
In response to this question, always ask: could what I’m doing signify that I’m unwilling to continue performing the contract?

Yes, if you are claiming costs on a quantum meruit basis (meaning ‘what the job is worth’), you can recover profit.

Quantum meruit means “as much as they deserve” or “what the job is worth”. When determining payment on a quantum meruit basis, the court will consider what a ‘fair and reasonable value’ would be for the works performed. This generally includes a reasonable percentage to cover profit and overheads.

As the foundation for quantum meruit lies in unjust enrichment, the actual amount awarded will depend on the specific circumstances, and the evidence that can be adduced.

However, following Mann v Paterson [2019] HCA 32, the court will be reluctant to award an amount in quantum meruit that exceeds the total contract price or appropriate portion of the contract price (with that apportionment to be determined on a case by case basis, depending on the contract terms). However, the contract price will usually have already accounted for a profit margin.  

Yes, an arbitration clause will generally outlive the contract in which it sits. An arbitration clause functions as a separate agreement to the main contract.

If the main contract is terminated, rescinded, frustrated, or otherwise ‘dead’, the arbitration clause remains operational and is treated as distinct from the contract itself. This means that a dispute as to the validity of the contract can (and usually must) be determined in accordance with the arbitration clause, and the arbitrator can make a determination that the contract is void without depriving themselves of the jurisdiction to do so.

However, an arbitration clause will not be enforced if the clause itself is invalid. (International Arbitration Act 1974 (Cth) s 7(5)). Whether the arbitration clause is valid will be a question of fact and law specific to the clause. The events that killed the main contract will not necessarily affect the arbitration clause and courts have held that it is “necessary to distinguish between repudiation of the substantive contract and repudiation of the arbitration agreement” (CPB Contractors Pty Ltd v Celsus Pty Ltd [2017] FCA 1620 [65]).

For example, a homeowner entered into a building contract with a builder who held a fraudulent licence. The homeowner purported to rescind the contract with the builder by reason of the fraud and sought to transfer the proceedings from arbitration to court. However, the court held that the parties were still required to apply the arbitration clause because it was treated as a separate agreement, not affected by the fraud (Ferris & Anor v Plaister and Anor (1994) 34 NSWLR 474).