Contractual and Legal
The Commerce Act 1986 applies to all commercial activity. An organisation such as Precast NZ comprising members that are competitors, must take particular steps to ensure its activities do not contravene the anti-competitive requirements.
The Commerce Commission has published guidelines available at www.comcom.govt.nz/trade-associations/
Construction Contracts Act 2002 applies to all construction projects and covers matters concerning payments. Compliance with this Act and its procedures are necessary to ensure remedies are available in the event of disputes.
The Construction Contracts Bill amending and updating the 2002 Act was before the Commerce Select Committee in mid/late 2013. Following submissions it is likely the bill will be amended and may not come into effect before 2015.
A copy of a submission calling for security of retentions in Construction Contracts can be accessed here.
Consumer Build is an independent organisation offering advice on numerous legal issues relating to building. The link above is to Construction Contract Act but many other construction related matters are covered.
Voidable Transactions A recent Court of Appeal decision CA773/2012 permits receivers to claw back progress payments made during the two years preceding a construction company failure. This has severe implications for subcontractors who will have already lost their current progress claims as well as all retentions being held by the failed company and may then be faced with paying back progress payments previously received. Moves are underway to take an appeal to the Supreme Court on this issue of profound importance to subcontractors.
While not directly involved the legal proceedings, Precast NZ is supporting the appeal, as are some of our members.
This Subcontract agreement was developed by representatives of subcontractors and Registered Master Builders. It is aimed at ensuring obligations and responsibilities are identified by providing more information prior to entering into a binding contract thus reducing later disputes. It is available in hard copy or in electronic format which has recently been upgraded to improve ease of use by head contractors. It is recommended that all Precast NZ Members insist on use of this agreement. It is available through the Members section of this web site, or from the Registered Master Builders Federation
Are retentions serving any purpose other than to provide unsecured interest free finance to high risk operators? See one person’s view on our situation here in NZ, or check out the views of the National Specialist Contractors' Council and their efforts in the UK.