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

“Route to the decision” – Scottish court rejects challenge to adjudicator’s decision that did not expressly address a material line of defence

Written by Kate Holland In UK Grid Solutions Limited and Amey Power Services Limited v Scottish Hydro Electric Transmission PLC,[1] the unsuccessful party to an adjudication sought to resist enforcement on the grounds that 1) the adjudicator had failed to address a...

Asking a decision-maker to take a sneaky peek isn’t a strategically clever move: adjudicator’s decision held unenforceable due to breach of without prejudice rules

Written by Maria Cole A party (AZ) brought proceedings in the England and Wales Technology and Construction Court (Court) to enforce the decision of an adjudicator against the respondent (BY).[1] During the adjudication, AZ had placed without prejudice emails before...

Failed waterproofing causes a flood of costs

Written by Sam Dorne Legal battle over failed waterproofing comes to an end after plaintiffs prove their damages at the High Court in duty of care breach. Water water everywhere In the heart of Flat Bush, Auckland, stand the Nikau Apartments – a residential complex...

Mayor Brown is right about why public sector contracts go over time and over budget

Written by Rabin Rabindran and Derek Firth  In his opinion piece (NZ Herald 21 February 2024) Mayor Brown provides a number of reasons for these overruns.  They include an obsession with governance skills rather than a range of skills directly useful to the sector...

High Court soundly dismisses judicial review of adjudication determinations but may inadvertently have put the cat among the pigeons

By Alexander Lyall In Sam Pemberton Civil Ltd v Robertson,[1] the High Court considered applications for judicial review of two related adjudication determinations. In dismissing the applications, the Court underscored some of the key functions of the Construction...

Technocratic payment regime not the priority under the Construction Contracts Act

Written by Alexander Lyall In Dem Home Ltd v New Gate Ltd[1] the High Court considered whether a payment claim had been validly served under the Construction Contracts Act 2002 (the CCA). The decision is an ever-important reminder that the CCA is designed to maintain...

Highly stressful circumstances: Court of Appeal assesses contract in earthquake insurance mess

Written by Alexander Lyall   The Court of Appeal (the Court) has issued a decision in a long-running dispute between a Christchurch homeowner and her insurance and legal advocates. Pfisterer v Claims Resolution Service Limited & Anor[1] contains a close look...

Kane v Venues NSW: The Handrail Tale

Written by Sam Dorne The case of Venues NSW v Kane [2023] NSWCA 192, involving a patron’s fall within the lower concourse of the western grandstand of the McDonald Jones Stadium in Newcastle, Australia, looks at a fundamental legal question surrounding the duty of...

The “measured duty” to love thy neighbour: private nuisance and naturally occurring hazards

Written by Maria Cole A Christchurch landowner, whose property sits at the foot of unstable clifftop land purchased by the Crown following the Canterbury earthquakes, has failed in the Supreme Court to obtain damages in “private nuisance” for the risk of further...

New regulations for building products

Written by Richard Pidgeon The Building (Building Product Information Requirements) Regulations 2022 set out how information about building products contributes to building code compliance. The regulations stipulate that information on how products are to be installed...

Mainzeal saga ends in the Supreme Court

By Richard Pidgeon In Yan v Mainzeal Property and Construction Limited [2023] NZSC 113 the Supreme Court upheld damages against Mr Yan in the sum of $39.8 million and the remaining three directors (including Dame Jenny Shipley) jointly with Mr Yan in the sum of $6.6...

Obstructed view review

Written by Maria Cole Introduction In Wynyard Quarter Residents Association Incorporated v Auckland Council and Orams Group Limited,[1] a group of apartment owners filed judicial review proceedings seeking to overturn an Auckland Council decision to grant resource...

Keep calm and carry on: English Court of Appeal overturns controversial High Court ruling and clarifies guiding principles in serial adjudications

By Kate Holland The English High Court caused concern earlier this year when it held that an adjudicator had breached natural justice by holding himself bound by a previous adjudicator’s findings. Now, in Sudlows Ltd v Global Switch Estates 1 Limited,[1] the Court of...

Moving home

Written by Richard Pidgeon A family became dissatisfied with a house removal firm who had shifted their home from Remuera to Katikati. In Stott v Uplifting Homes Ltd [2023] NZHC 1514, the High Court determined the level of compensation after the contract was...

Big loss for insurer in legal battle with Napier Council over leaky building clause

Written by Sam Dorne In a recent case, the Supreme Court of New Zealand ruled in favour of the Napier City Council in an insurance claim involving building defects including weathertightness or “leaky building” issues, in what is seen as a return to the status quo...

Case update: English Court of Appeal confirms ‘useless’ ADR procedure too uncertain to enforce

By Kate Holland In our December 2022 issue of BuildLaw, we reported on a case in the English High Court[1] about an unusual alternative dispute resolution (ADR) procedure in a construction contract that was held to be too uncertain to be an enforceable condition...

Disgruntled builders lose defective cladding dispute

By Sam Dorne In Goodman-Jones v Hughey & ors [2023] NZHC 604, two experienced builders brought a claim for damages for a perceived defective installation of cladding for a new build. Despite the action being brought against multiple defendants the Court found that...

Craftiness is not an abuse of process

With cashflow a persistent concern for companies in the construction industry, a recent decision in the New South Wales Supreme Court may alleviate some of the stress. The decision should affirm to struggling parties that there is no problem with taking strategic...

Privileged glimpses: Curtain falls on art gallery’s nuisance ‘human zoo’ exhibit

By Kate Holland The UK Supreme Court has ruled that the London Tate Modern’s public viewing gallery overlooking the luxury glass-walled apartments nearby, is a visual intrusion amounting to the tort of nuisance. The decision in has attracted criticism for prioritising...

Waiver and estoppel arguments raised in interim payment dispute

By Sam Dorne The English Court of Appeal case of A & V Building Solutions Limited v J & B Hopkins Limited has highlighted issues parties face when there is ambiguity in relation to dates for requesting interim payment in construction contracts.[1] The case...
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