When Rates Don’t Reflect Reality – Lessons from Wiggins Island

When rates don’t reflect reality, how do you provide a fair measure of value? That was the challenge in Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd (No 3) [2017] QSC 85.

The Case in Brief

Civil Mining & Construction (CMC) carried out works on the Wiggins Island Coal Export Terminal in Queensland.  During the project, numerous variations and delays arose, and large sums were claimed under the contract’s valuation provisions.  The dispute eventually went to the Supreme Court of Queensland, where both parties presented expert evidence on the reasonable value of the varied works. 

The central issue was not whether variations existed, but how they should be valued.  The contract required that variations be priced using existing rates “where appropriate” and, if not, by reference to reasonable rates or prices.  CMC argued that many of the original rates were no longer applicable due to changes in scope and method.  Wiggins Island said the original rates should still apply. What the Court expected

What the Court Said

Justice Flanagan examined the evidence closely.  He noted that where the nature of the work changes materially, the original rates may no longer provide a fair measure of value.  The task then becomes one of assessing what is reasonable in the circumstances — an exercise in judgment, not simple arithmetic. 

The court was critical of expert evidence that applied existing rates mechanically without considering whether they remained commercially realistic.  Justice Flanagan preferred the evidence that explained the basis of each rate, compared it with market benchmarks, and demonstrated how it reflected the actual conditions of the varied work. 

The judgment reaffirmed that valuation under a construction contract is not a rigid formula.  It is a question of evidence, fairness and professional reasoning. 

Lessons for Quantity Surveyors and Quantum Experts

For QS experts, this case highlights the importance of context and reasoning in valuation.  The expert’s job is not to repeat what the contract says, but to interpret it through the facts of what was actually built. 

A credible valuation approach requires the expert to: 

1. Test applicability of original rates – explain whether the nature of the work, method or risk profile has changed. 

2. Use comparable benchmarks – support any new rates with reference to market data, tender comparisons or industry norms. 

3. Explain reasoning clearly – show how the rate or price reflects the cost and circumstances of the variation. 

An expert who relies solely on contract rates without analysis risks appearing mechanical.  Conversely, one who departs from the contract without justification appears speculative.  The court in Wiggins Island rewarded the evidence that combined contractual awareness with professional judgment. 

Why This Still Matters

Valuation disputes are often the most contentious part of a project.  They sit at the intersection of contract interpretation and professional skill.  This case shows that the court expects experts to apply both.  The QS must read the contract carefully but also exercise independent judgment about what is reasonable and fair in practice. 

The decision also reinforces that valuation evidence must be transparent.  The reasoning must be visible so the court can follow how the expert moved from data to conclusion.  Rates and totals mean little without the logic that connects them. 

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My View

In my view, this case demonstrates what true quantity surveying expertise looks like.  The expert who understands the contract, the site, and the market can explain why a price is reasonable with calm authority.  The one who hides behind schedules or formulas cannot. 

Wiggins Island reminds us that valuation is not a clerical exercise; it is a professional judgment grounded in evidence.  When a QS expert explains that judgment clearly and fairly, their opinion becomes not just persuasive but decisive. 

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