BuildLaw Issue 30 December 2017 | Page 19

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An Authorised Nominating Authority under the Construction Contracts Act 2002

BuildLaw | Dec 2017 18

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Facts

A dispute around payment arose in a particularly fraught project in Glenn Innes. The project, as described by Associate Judge Sargisson, was for two houses that were architecturally unique and complex on a difficult construction site. Throughout the project, construction and communication difficulties compounded and accordingly “tensions rose considerably once issues of payment entered the picture.”

Dreamhome (the contractor) sought payment for achieving two milestones. GPW (the principal) disagreed that these milestones had been achieved and sought expert determination under the contract. The expert agreed with GPW that the milestones had not been achieved. Dreamhome disputed this finding and issued a Payment Claim under the CCA. Relevantly, the date of service was disputed with Dreamhome claiming it was served 12 December 2017, whereas Dreamhome claims it was not served until 27 January 2017. A responding payment schedule was issued 3 February 2017 (out of time if Dreamhome’s service date was correct).

On 27 January 2017, Dreamhome notified GPW of its intention to suspend work (for non-payment of the payment claim). On this date, Dreamhome also served a statutory demand for the sum claimed under the invoices (being $232,531.57). A second expert determination was released on 24 February 2017, agreeing that Dreamhome had not complied with their contractual obligations and GPW was entitled to cancel the contract.

Can a contractor get around their delays and inadequacies simply by issuing a payment claim? The recent High Court case of GPW Investments Ltd v Dreamhome Construction Group Ltd [2017] NZHC 2057 illustrates the interaction between the payment regime under the Construction Contracts Act 2002 (CCA), and the statutory demand regime under the Companies Act 1993.

Sam Thyne

NEW ZEALAND

Facilitator of timely payments, or draconian regime?

CASE IN BRIEF

GPW Investments Ltd v Dreamhome Construction Group Ltd