CONCRETE DISPUTES

Disputes relating to concrete work regularly feature in matters dealt with by the Tribunal.

Concrete work is generally undertaken in difficult conditions. Site conditions can be challenging and weather plays a critical part in the carrying out of all aspects of concrete work. Tolerances and surface finishes for footings, floor slabs, masonry walls, precast panels, beams and other building components, driveways, yards and patios can be critical and are often not well understood or achieved.

Ground conditions may vary across a site and may be more difficult to work in than expected (ie rock, buried rubbish, tree roots, other services etc) or in some cases, unsuitable for supporting the structure without considerable additional work being undertaken. That work often comes at considerable cost for which no real benefit is visible.

Concrete will crack for many and varied reasons. Where the concrete work is in fact the finished surface, cracks and other surface defects and irregularities will almost certainly come under close scrutiny and the scope and nature of any remedial work that may be required will inevitably be the subject of debate due to high cost at one end of the remedial spectrum and aesthetics and durability where a low-cost solution is proposed.

Quotations will often omit (deliberately or accidentally) items of work but not expressly state so on their face and may be presented in the form of an ‘estimate’ or contain estimates for items of work to be undertaken in the form of PC (Prime Cost) or Provisional Sums that are woefully inaccurate for the work/materials that are in fact required to be undertaken/supplied.

Owners will generally build to the very limit of their financing capacity with no contingency provision, and where ground conditions require bespoke geotechnical solutions, the cost and time associated with that work can cause financial problems for a project. In many cases owners will request changes to the scope of work and specification as work progresses without first obtaining a price or having any understanding of the cost and time consequences of their instructions.

On the other hand, some concrete contractors lack the necessary skills and/or fail to have adequate quality assurance processes in place to ensure they achieve the agreed/specified finish, and/or to complete their work by the due date for completion.

In the circumstances, it is little wonder that disputes relating to concrete work are commonplace. There are essentially two types of disputes that we deal with:

  • technical (in the legal sense) disputes – ie disputes that arise out of non-compliance with the technical requirements for making and responding to payment claims under the Construction Contracts Act 2002 (the Act); and
  • merits based disputes – ie disputes about the merits of the parties’ arguments in terms of the construction contract that governs their relationship, or in the case of a contract with a residential occupier, the statutory warranties that are implied into every residential building contract under s362I of the Building Act regardless of whether there is a written building contract. Typical merits based plumbing disputes include disputes in relation to:
    • non-payment for work undertaken;
    • contract interpretation – what the parties actually agreed;
    • scope of work;
    • quality of work;
    • quality of materials;
    • time for completion;
    • payment – the value of the work undertaken in the absence of express agreement as to price;
    • estimates v actual cost;
    • variations – whether certain work is in fact a variation to the agreed scope of work and the value of that varied work;
    • defective work;
    • scope and cost of rectification work;
    • repudiation/cancellation of the contract; and
    • damages for breach of contract.

What types of disputes arise in adjudications?

Default liability

The Construction Contracts Act 2002 provides for a regime under which a payee (the contractor who is seeking payment) can issue its invoice in the form of a payment claim which requires the payer (the person or company who has engaged the contractor to provide services) to respond with either payment in full or a payment schedule which meets the requirements of the Act.

If the payer fails to pay or issue a valid payment schedule, the payee is entitled to initiate an adjudication claim for payment in full on the basis of default liability. If the payee can establish that it has issued a valid payment claim and no valid payment schedule has been provided in response, an adjudicator must determine the matter in the payee's favour and payment must be made within two working days of receipt of the adjudicator's determination.

A default liability claim can only be brought by the payee not a payer.

Claim on the Merits

A claim on the merits may be brought as an alternative to a default liability claim or on a standalone basis.

If you are a respondent to a default liability claim, you may also wish to consider initiating your own adjudication on the merits.

Disputes on the merits are adjudication claims which consider the substantive rights and obligations of the parties in terms of the construction contract that governs their relationship, or in the case of a contract with a residential occupier, the statutory warranties that are implied into every residential building contract under s362I of the Building Act regardless of whether there is a written building contract. Typical merits based painting disputes include disputes in relation to:

  • non-payment for work undertaken;
  • contract interpretation – what the parties actually agreed;
  • scope of work;
  • quality of work;
  • quality of materials;
  • time for completion;
  • payment – the value of the work undertaken in the absence of express agreement as to price;
  • estimates v actual cost;
  • variations – whether certain work is in fact a variation to the agreed scope of work and the value of that varied work;
  • defective work;
  • scope and cost of rectification work;
  • repudiation/cancellation of the contract; and
  • damages for breach of contract.