WATERPROOFING DISPUTES

Waterproofing disputes generally arise out of poor contractual documentation and/or defective work and/or materials.

Plans often lack detail and specifications are often general and not project specific. Quotations will often omit (deliberately or accidentally) items of work (ie supply of droppers and scuppers, or protective barriers in the case of tanking works) but not expressly state so on their face, and some may be presented in the form of an ‘estimate’ or a PC Sum (Prime Cost Sum) or Provisional Sum, that is woefully inaccurate for the works that are in fact required to be undertaken.

Many owners and head contractors will request changes/variations to the scope of work and specification as work progresses and no price will be agreed in advance.

While waterproofing is often an integral part of tiling work, it may be undertaken as a stand-alone activity and problems can arise when leaks appear in below ground structures and/or below and around decks, showers and wet areas and the cause is not readily identifiable as to a waterproofing, backfilling or tiling (damage from) issue. Another common cause for complaint is that waterproofing contractors will often withhold producer statements pending payment – the problem becomes more complex when the owner has paid the head contractor but the head contractor has failed to pay the waterproofing subcontractor.

On the other hand, mistakes and errors are a feature of any building related work and some waterproofing contractors lack the necessary skills and/or fail to have adequate quality assurance processes in place to ensure they achieve the agreed/specified scope of work to the specified standard, and/or to complete their work by the due date for completion.

In the circumstances, it is little wonder that waterproofing disputes arise from time to time. 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 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.
Skip to content