As most are aware, on 17 July 2021, the NSW State Government issued the Public Health (Covid-19 Temporary Movement and Gathering Restrictions) Amendment (No.8) Order 2021.

This is the first occurrence of a closure in the construction industry since the pandemic began. This shut down has affected approximately 250,000 workers and has had widespread economic consequences.

The closure of construction sites and the broader industry throughout NSW has severely impacted the administration of construction contracts and the progress of sites. Typically, delays to a construction program impact the date for practical completion. This in turn, may trigger a claim for liquidated damages.

Given that the industry is in unchartered waters, it is important to understand the terms of your own contract and to determine whether you are entitled to an extension of time in order to avoid the payment of liquidated damages under the contract, or from a Principal perspective, whether you ought to grant EOT’s (even if not claimed) to seek to avoid time being put at large.

To summarise, the building and construction industry closure may impact upon the parties to a construction contract in any (or all) of the following ways:

  1. Delay damages.
  2. Liquidated damages.
  3. Extensions of time.
  4. Date for practical completion.
  5. Entitlements to payment.

You should examine your own contract to see how you are affected. If you have carried out work prior to the closure, your rights under the Building and Construction Industry Security of Payment of Act 1999 (NSW) (the Act) may not be impacted and if there are delays in payment, Contractors may consider their rights under the Act.

Should you require any further information, advice or assistance as to how to deal with these issues or seeking to update your contracts to seek to manage the risks associated with these issues, please do not hesitate to contact HBA Lawyers.

Ziv Ben-Arie on 0415 933 993
Patrick Haklany on 0414 680 780
Rishon Cross