BuildLaw Issue 24 – June 2016

In this issue we feature ‘Judicial Remedies for Construction Defects: Common Law, Equity or Statute’, a paper prepared by Philip Britton and delivered by Philip to the Society of Construction Law New Zealand Inc in March of this year. We also present articles on limiting financial liability for contractors; the relevance of frustration in modern day construction contracts; delegation of an adjudicator’s decision making function; acting bona fide when calling on a bond (or not); varying no-variation clauses; entitlement to extensions of time in construction projects; and one good reason why milestone based entitlements to payment are really not such a good idea!

In ‘Case in Brief’, we present summaries of two recent cases of interest. NZ Fire Sprinkler Protection was a seminal case on how not to appoint an adjudicator under the Construction Contracts Act 2002 (to make matters worse, it is not the first time this has happened) and Iceland Drilling v Summit is an exemplar of the need to read the terms and conditions of any offer carefully – in this case the failure to read the second page cost Iceland Drilling nearly $1.3million.

Contents:

  • Limiting financial liability for contractors
  • John Sisk & Son v Duro Felguro UK Ltd [2016] EWHC 81 (TCC)
  • Case in Brief: New Zealand Fire Sprinkler Protection Ltd v AFS Total Fire Protection Ltd [2016] NZHC 690
  • Facing frustration: the relevance of frustration in modern day construction contracts
  • Judicial Remedies for Construction Defects: Common Law, Equity or Statute?
  • Telling the truth is still the best policy: Laing O’Rourke Australia Construction Pty Ltd v Samsung C&T Corporation, March 2016
  • Beware – a contract can be varied orally or by conduct even if the contract says otherwise!
  • Case in Brief: Jardbonir HF trading as Iceland Drilling v Summit Hydraulic Solutions Ltd [2016] NZHC 490
  • Is time on your side: how is the completion date affected where delay is attributable to actions of both principal and contractor?
  • Where to from here: what to do when an interim payment schedule runs out

Vicarious liability and subcontractors

By Sam Dorne Liability in tort depends upon proof of a personal breach of duty, with one true exception, vicarious liability. The law of negligence is generally fault based; a defendant is personally liable only for the defendant’s own negligent acts and omissions....

Limitation for payment claims under construction contracts

By Sam Dorne The decision in Hirst v Dunbar [2022] EWHC 41 (TCC) considers the impact of payment provisions in a construction contract, whether through contract or implied terms, and the commencement of the limitation period for payment claims under the contract. It...

Extensions of time in construction contracts

By Jo O’Dea   In an extension of time claim, blame for the delay was a relevant consideration when assessing what was “fair and reasonable”.   In CAJ v CAI [2021] 5 GCA 102, the Singapore Court of Appeal considered the issue of extensions of time in...

Testing the waters: New South Wales Supreme Court considers the prevention principle

By Hannah Aziz  Court provides further confirmation that the prevention principle can be excluded by the terms of a contract.   Introduction Following our recent commentary comparing the operation of the prevention principle in New South Wales and Victoria, the...

Construction contract or product warranty? Not all collateral warranty disputes can be adjudicated

By Belinda Green Collateral warranties might be parasitic on a construction contract, but that doesn’t automatically mean they are one. The individual wording and circumstances need to be considered. In some cases, like in Toppan Holdings Limited v Simply Construction...

When you think the amount of your personal guarantee had a limit – but it didn’t.

In a recent Court of Appeal case, Cancian v Carters [2021] NZCA 397, Carters sought to enforce a personal guarantee against Mr Canican.  The Court dismissed an argument from Mr Cancian that Carters had not notified him that that the limit on his personal guarantee had...

Leaky Home Case: Failure to obtain a building report results in reduction of damages for contributory negligence

By Melt Strydom. Apportionment for contributory negligence allows a court to share the responsibility between parties in circumstances where the test for causation and remoteness of damage justifies it. It doesn’t mean a respondent will not be held liable for...

Do payment claims for retention money ‘fit’ with the standard terms of contract in New Zealand?

By Maria Cole The New Zealand Construction Contracts Act 2002 (CCA) does not explicitly state that payment claims can be used to recover retention money. That said, it is clear the 2015 amendments to the definition of a ‘payment’ under the CCA are broad enough to...

Resolving Construction Disputes – Is Adjudication a Good Option?

By Natalia Vila.   With few exceptions, the Construction Contracts Act 2002 (the Act) applies to every construction contract relating to construction work carried out in New Zealand. Statutory adjudication under the Act is the most commonly used dispute...

Cost certainty for resolving building and construction disputes: Extension to the BDT Adjudication Low Value Claim Scheme

By Belinda Green.   One of the main barriers to dispute resolution is cost: no one wants to risk spending more than the amount they recover. With inflation and construction costs always on the rise, BDT is extending its Low Value Claim (LVC) Scheme for...

Construction Contracts – Enforcement of Debts Due and Mandatory Alternative Dispute Resolution Clauses

By Melissa Perkin. The recent High Court decision in Hellaby Resources Services Limited v Body Corporate 197281 [2021] NZHC 554 is of particular interest in the construction sector for several key reasons: it is a rare example where a stay of enforcement of summary...

The Enforceability of Liquidated Damages Clauses

Author: Melissa Perkin  Liquidated damages clauses, a common feature of construction contracts, stipulate the amount of money payable as damages for loss caused by a breach of contract, irrespective of the actual loss suffered. A recent United Kingdom decision of the...

Building and Construction Under COVID-19 Alert Level 4

For information and guidance on what building and construction work can be done at Alert Level 4: ·       Health and Safety protocols at different alert levels, visit CHASNZ COVID-19 and working at the current alert level (chasnz.org); and ·       COVID-19 guidance...

Class-action lawsuit against Harditex cladding fails

By Melissa Perkin.  A second class-action lawsuit[1] brought by a group of 144 homeowners whose homes were clad in Harditex fibre-cement cladding, has failed. The homeowners alleged that Harditex manufacturer James Hardie, between 1987 – 2005, knowingly sold defective...

What types of disputes can be referred to adjudication?

The types of dispute that can be referred to adjudication are listed below:  Default liability claim These are claims for technical non-compliance with the payment regime under the Act. Where a valid payment claim has been served by a payee on a payer and the payer...

Proposed Changes to the Construction Retentions Regime

Author: Hannah Stanley, Building Disputes Tribunal Registrar Despite the introduction of the retentions regime into the Construction Contracts Act 2002 (the Act) in 2017[1], many subcontractor retentions have still been left unprotected and various gaps in the...

Show Me the Money: Seven Things to Remember When Preparing a Payment Claim

By Amy McDonald Are you still waiting on an invoice to be paid that you sent ages ago? Have you done all the work but have nothing to show for it? Unpaid invoices can have a devastating impact on builders and subcontractors. Fortunately, the Construction Contracts Act...

Experts’ duties and conflicting interests – Secretariat Consulting Pte Ltd v A Company

By Belinda Green. Experts may look to amend their terms of engagement, as the English Court of Appeal finds a conflict of interest clause applied to a global brand, despite involving separate experts in different locations, contracting via separate legal entities....

Payment Claims: using Xero to send out your invoices? Don’t forget the important notice

By Catherine Green.   Do you use Xero to send out your invoices? Make sure they are compliant payment claims under the Construction Contracts Act 2002 (Act). The default payment regime under the Act is an efficient and effective way of getting your invoices paid....

The Award of Enforcement Costs under the Construction Contracts Act 2002

By Melissa Lin and Nashi Ali. Payees intending to recover costs from payers during the course of legal proceedings may want to reconsider issuing a statutory demand in the first instance and seek an adjudicator’s determination instead. Cubo Projects Ltd v S&S...