Over the weekend, the NSW Government made new Public Health Orders which immediately shut down construction sites and prohibit maintenance, cleaning or other works at residential premises until 31 July 2021 (subject to change).
Certain exceptions to these Orders apply for emergencies or urgent matters, such as to ensure the safety/security of a construction site, to ensure the integrity of plant, equipment or works done that would otherwise deteriorate, to maintain public utilities, and to receive deliveries of supplies that would otherwise deteriorate.
In addition, the NSW Government has banned anyone in the City of Fairfield, City of Liverpool or Canterbury-Bankstown local government areas from leaving their own local government area until 31 July 2021, unless they are an ‘authorised worker’ (a list of whom can be found here). This applies even if they would otherwise have had a ‘reasonable excuse’ to leave their home previously.
Below are some key legal considerations for those affected by the Orders.
KEY LEGAL CONSIDERATIONS
Everyone affected by the Orders:
- Consider your employment arrangements. You must not require staff who live in the City of Fairfield, City of Liverpool or Canterbury-Bankstown local government areas to leave their own local government area, unless they are an authorised worker (a list of which can be found here). For other staff, you must require them to work from home (unless it is not reasonably practicable). If there are staff who may not have any useful work to perform, you may consider negotiating with them to take leave or make other arrangements or, worse still, standing them down.
- Consider your entitlements to claim under insurance policies. Your business interruption insurance policies may cover certain losses you incur arising from the Orders. Even if your policy contains exclusions for pandemics or similar events, the High Court of Australia recently found that such exclusions in some policies cannot be relied upon by insurers. You should seek legal advice if pandemic or similar exclusions apply to your policy.
- Consider your solvency position. If you have concerns for your own insolvency, seek immediate professional advice on how to protect you and your business. Directors may also seek to invoke safe harbour provisions, if available and practicable to do so (noting there may be implications for doing under agreement terms).
- Consider whether government support is available. While this is not strictly a ‘legal’ consideration, the NSW and Commonwealth Governments have sought to provide targeted support to businesses and individuals during this time. You should consider whether what support (if any) is available to you or your business.
Contractors, Suppliers and Consultants:
- Consider your contractual entitlements and obligations arising from the Orders. You may be entitled to issue force majeure notices suspending works, or claims for extensions of time and costs arising from the Orders. If your contract does not provide a clear pathway to do so, you may wish to consult a lawyer to determine what alternative bases are available to make such notices and make claims. Act FAST – strict time limits commonly apply to issuing claims or notices!
- Get ready to respond to similar claims and notices issued by your subcontractors, suppliers and consultants.
Principals and Developers:
- Get ready to respond to claims and notices issued by your contractors, suppliers or consultants. You may find that contractors, suppliers and consultants are creative in how they craft their claims for time and costs, or notices arising from the Orders. The claims or notices may not be on traditional extension of time, delay damages or force majeure provisions of an agreement.
- Consider your obligations under any finance arrangements. You may have disclosure obligations to your financier under your financing arrangements. Consequences may apply if you fail to do so.
- Consider your obligations and entitlements under upstream project agreements. You may have obligations to notify, or entitlements to claim, under upstream project agreements you have entered into, i.e. under PDAs.
If you have any queries or need specialist legal assistance in relation to the Orders, please contact Doron Rivlin or Craig Clements.
Disclaimer: This article does not constitute legal advice and is not to be relied upon for any purposes. It does not take into account your objectives, situation or needs. You should seek legal advice that is tailored to your objectives, situation or needs.