NEC advises that users who are familiar with NEC3 contracts will have no trouble moving to NEC4 as the style, layout, terminology and key project management processes that run through in NEC contracts remain.
The Schedules of Cost Components have both been revised and the different fees have been simplified into one. There are new People Rates in options A and B, and people overheads and Working Area overheads have been deleted. The view from the speakers was that Quantity Surveyors will need to work through these changes carefully to avoid being caught out, but that it should reduce the impression of double dipping taking place. NEC advises that users who are familiar with NEC3 contracts will have no trouble moving to NEC4 as the style, layout, terminology and key project management processes that run through in NEC contracts remain.
A recent New Zealand statement on the law of penalties
by john green
Many legal systems worldwide will not enforce contractual provisions which are penalties. However, the courts’ desire to enforce parties’ commercial bargains has led to inconsistent application and tortuous interpretation of the rule against penalties.
The recent decision of the New Zealand Court of Appeal in Wilaci PTY Limited v Torchlight Fund No 1 LP (In rec) [2017] NZCA 152 (2 May 2017) will be of interest to those operating in the construction sector as it provides an indication as to how New Zealand courts might treat liquidated damages clauses.
Torchlight was a private equity fund which was established in 2009 to invest in distressed assets. It is no longer active having transferred those assets to a Cayman Islands’ entity. One of its investments involved the purchase of a debt from Bank of Scotland International totalling AUD$185m, of which Torchlight had repaid all but AUD $37m by mid-2012. Being in a difficult liquidity position to pay off the debt, Torchlight sought bridging finance from a Mr Grill, a wealthy Australian engineer, businessman and founder of the publicly listed WorleyParsons Limited.
Torchlight and Mr Grill entered into a 60-day contract in which Mr Grill would provide AUD$37m to discharge the debt. In return Torchlight would repay the principal with interest at 5.25% callable on day 60 (a total of $320,000), and an additional $5m due 120 days from the day