In Allied Grain Systems P/L v Inheritance Capital Asset Management P/L [2023], Thomson Geer successfully acted for Allied Grain Systems, clarifying what is required to establish inadvertence for the purposes of obtaining an exception to licensing requirements under the Building Work Contractors Act 1995 (SA) (BWC Act).

Background

Allied Grain Systems Pty Ltd (AGS) was a specialised contractor, building grain storage and handling equipment for a new grain export facility in Wallaroo, South Australia.

Each state has unique licencing regimes for building construction workers.  Some states, but not all, provide that a builder has no entitlement to be paid unless it is licensed.

Pursuant to section 6(2) of the BWC Act, a person not licensed as building work contractor is not entitled to be paid for building work, subject to certain exceptions including section 6(2)(b) of the BWC Act which provides an exemption to the licensing regime where the failure to be licensed stems from "inadvertence only".

AGS did not hold a licence, but sought a determination by the Court pursuant to section 6(2)(b) of the BWC Act that it had failed to obtain a licence by reason of inadvertence only.

Inadvertence and Ignorance of the Law

Justice Stanley found that the sole director of AGS, was unaware of the requirement to hold a builders' licence in South Australia and accepted his evidence that:

• AGS did not require a licence in New South Wales, and this coloured his view of the South Australian licencing regime; and
• after obtaining a licence in Queensland, he incorrectly expressed a view that AGS was not required to hold a builders' licence in any other state.  

The Court considered whether the failure to have regard to the statutory regime in South Australia amounted to "inadvertence" for the purpose of section 6(2)(b) of the BWC Act.  

Stanley J held that "inadvertence" included a person's failure to turn their mind to the relevant requirement, or a failure to appreciate the consequences of non-compliance.  His Honour specifically upheld the decision of A1 Quality Concrete Tanks Pty Ltd v Civil and Allied Technical Constructions Pty Ltd that unawareness of the requirements of the BWC Act could amount to inadvertence.

Finally, the Court also had regard to the underlying purpose of the inadvertence exception in the BWC Act, whereby his Honour stated at [39] that (emphasis added):

It is important to recognise the statutory purpose in enacting s 6(2)(b). It is intended to provide a remedy for human error. In construing the provision, care should be taken not to undermine that purpose by adopting a construction which is too narrow or rigid (emphasis added).

Accordingly, His Honour was satisfied that AGS' failure to obtain a licence resulted from inadvertence, and inadvertence only.

Key Takeaways

• Any entity performing building or construction works should confirm the licensing requirements in each state that they are performing works, as State licensing regimes are not uniform.  
• The inadvertence exception provides a remedy for human error, and could be satisfied by  ignorance of the existence of the BWC Act.  

For assistance regarding building licensing requirements, please contact a member of our Construction and Infrastructure team in your state.

Authors

Shannon Schwarz | Partner | +61 8 8236 1175 | SSchwarz@tglaw.com.au

Felicia Dianos | Associate | +61 8 8236 1213 | fdianos@tglaw.com.au

Joseph Semmens | Lawyer