Supplementary Order Paper No 52

  • released 11 March 2015, superseded 22 September 2015

No 52

House of Representatives

Supplementary Order Paper

Wednesday, 11 March 2015

Construction Contracts Amendment Bill


Proposed amendments for the consideration of the Committee of the whole House

Key:

  • this is inserted text

  • this is deleted text

Note: This Supplementary Order Paper shows amendments to the Bill that are being proposed by the Minister for the purposes of consideration in Committee of the whole House. This document does—

  • NOT have official status in terms of unamended text

  • NOT have the status of an as-reported version of the Bill.


Explanatory note

This Supplementary Order Paper (SOP) amends the Construction Contracts Amendment Bill—

  • to make provision for retentions (being money withheld by one party to a construction contract from money payable to another party to the contract as security for the performance of obligations under the contract) to be held on trust; and

  • to make other minor and technical changes.

Clause 2 is revised to provide that the commencement date of the new provisions in relation to retentions is 31 March 2016 and to change the coming into force date for the rest of the Bill to 1 July 2015.

Clause 4 is amended to make amendments to section 4 of the Construction Contracts Act 2002 (the principal Act) that are consequential to other changes in this SOP and clause 8B of the Bill.

Clause 5 is amended to make minor amendments that are consequential to other changes in this SOP and clause 16A of the Bill.

Clause 7 is revised to change the date when the principal Act will apply to contracts for design, engineering, and quantity surveying work (ie, related services) to 31 March 2016 and to remove from section 9 of the principal Act the reference to section 10, which is repealed by clause 8 of the Bill.

Clause 8A(2) is revised to replace new section 11(b)(iv). Section 11(b) of the principal Act lists provisions of a construction contract to which the principal Act does not apply. New section 11(b)(iv) currently refers to property management. The revised new section 11(b)(iv) refers generally to all services for the operation or management of a property that are not construction work and do not relate to construction work.

New clause 8AB amends section 13 of the principal Act. Section 13 makes conditional payment provisions in construction contracts ineffective. New clause 8AB defines a conditional payment provision to include any provision in a construction contract that makes the payment of retention money conditional on anything other than the performance of party B’s obligations under the contract.

New clauses 8AC, 8AD, 8BA, and 8BB make minor changes that are consequential to other changes in this SOP and clause 8B of the Bill.

New clause 8BC inserts new subpart 2A of Part 2 to—

  • define retention money:

  • require a party who withholds retention money to hold that money on trust:

  • provide that the trust only ends when—

    • retention money is paid; or

    • the party to whom the money is payable agrees to give up their claim, or

    • the money ceases to be payable by law:

  • make provision for proper accounting of retention money:

  • make provision in relation to the investment of retention money and interest payable on retention money:

  • prohibit provisions designed to delay payment of retention money:

  • provide that any provision in a construction contract is void that is designed to avoid the application of the provisions in the Bill relating to retentions.

Clause 8C, which amends section 19 of the principal Act, is replaced. The amendment clarifies that subpart 3 of Part 2 of the principal Act only applies to payment claims in relation to payments to which the contractor is entitled and expands the scope of the payment claims provisions to cover any type of payment under a construction contract for, or in relation to, construction work carried out by the contractor.

Clause 9 is amended and new clauses 9B to 9D inserted to make amendments that are consequential to the change to clause 8C (above) and to make an amendment to section 20 of the principal Act similar to that made by clause 9A of the Bill.

New clause 10A is inserted to replace section 25(2) of the principal Act to revise the example of a dispute in relation to a construction contract to include a disagreement as to whether or not there has been a breach of a term of the contract (including a term implied into the contract under the Building Act 2004 or any other enactment).

New clause 13AA is inserted to make a minor amendment that is consequential on clause 16A of the Bill.

New clause 13B is inserted, clause 14 is replaced, and clause 14A is amended. These clauses relate to the appointment of adjudicators. The main change is that, in order to be appointed as an adjudicator, a person who has been requested to act as an adjudicator must now serve a notice of acceptance within 2 working days of receiving the request. The changes also clarify that any conflict of interest issues that a prospective adjudicator may have must also be resolved within that period of 2 working days.

New clause 17A is inserted to make minor amendments to section 45 of the principal Act that are consequential to clause 16A.

New clause 24A is inserted to replace section 66(1)(a) to make a minor consequential amendment and to allow a claimant in an adjudication essentially to restart an adjudication where a prospective adjudicator has indicated that he or she is unwilling or unable to act as adjudicator.

New clause 24B is inserted to amend section 71 of the principal Act to clarify that the additional rule for limitation periods contained in section 393(2) of the Building Act 2004 applies in relation to adjudications.

Clause 29, which amends section 74 of the principal Act (which sets out the grounds on which a defendant may oppose the enforcement of an adjudicator’s determination as a judgment), is amended to clarify that the new ground of change in circumstance inserted by clause 29(2) applies only where the adjudicator’s determination is a determination about the rights and obligations of the parties under the contract (and not a determination about whether or not any of the parties are required to make a payment under the contract).

New section 82(2), inserted by clause 30B, is amended to clarify that the list of matters in new section 82(2)(a) to (i) that may be covered by regulations prescribing the form of a notice of acceptance is not exhaustive.

The Schedule is amended to correct a minor cross-referencing error and make consequential amendments as a result of the amendment to clause 2 (above).

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Supplementary Order Paper. The disclosure statement provides access to information about any material policy changes to the Bill and identifies any new significant or unusual legislative features of the Bill as amended.

A copy of the statement can be found at http://legislation.govt.nz/disclosure.aspx?type=sop &subtype=government&year=2015&no=52& .

Regulatory impact statement

The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 21 November 2014 to help inform the new policy decisions taken by the Government relating to the contents of this SOP.

A copy of this regulatory impact statement can be found at—


The Honourable Minister, in Committee, to propose the amendments shown in the following document.

Hon Nick Smith

Construction Contracts Amendment Bill

Government Bill

97—2

Contents

1 Title

2 Commencement

2 Commencement

3 Principal Act

Part 1
Amendments to preliminary provisions

4 Section 4 amended (Overview)

5 Section 5 amended (Interpretation)

6 Section 6 amended (Meaning of construction work)

7 Section 9 amended (When Act applies: general)

8 Section 10 repealed (When Act applies: residential construction contracts)

8A Section 11 amended (When Act does not apply)

Part 2
Amendments to principal provisions

Payments

8AB Section 13 amended (Conditional payment provisions ineffective)

8AC Subpart 2 heading in Part 2 replaced

8AD Cross-heading above section 14 amended

8B Section 14 amended (Parties free to agree on progress payment provisions in construction contract)

8BA Cross-heading above section 15 amended

8BB Section 18 replaced (Due date for payment)

8BC New subpart 2A of Part 2 inserted

8C Section 19 amended (Interpretation)

8C Section 19 amended (Interpretation)

9 Section 20 amended (Payment claims)

9A Section 21 amended (Payment schedules)

9B Section 22 amended (Liability for paying claimed amount)

9C Section 23 amended (Consequences of not paying claimed amount where no payment schedule provided)

9D Section 24 amended (Consequences of not paying scheduled amount in manner indicated by payment schedule)

10 New subpart 4 of Part 2 inserted

Adjudication of disputes

10A Section 25 amended (Right to refer disputes to adjudication)

11 Section 26 amended (Relationship between Part and other dispute resolution procedures)

12 Section 28 amended (How to initiate adjudication)

13 Section 31 replaced (When claimant may not seek approval for issue of charging order)

13AA Section 32 amended (Owner who is not respondent is party to adjudication proceedings)

13A Section 33 amended (Selection of adjudicator)

13B Section 34 amended (Eligibility criteria for adjudicators)

14 Section 35 amended (Appointment of adjudicator)

14 Section 35 replaced (Appointment of adjudicator)

14A New section 35A inserted (Notice of acceptance)

16 Section 37 amended (Response to adjudication claim)

16A New section 37A inserted (Reply to response to adjudication claim)

17 New sections 38A and 38B inserted

17A Section 45 amended (Adjudicator’s determination: matters to be considered)

18 Section 47 amended (Adjudicator's determination: form)

19 Sections 52 to 55 repealed

20 Section 58 amended (Enforceability of adjudicator's determination)

21 New section 59A inserted (Consequence of not complying with adjudicator's determination under section 48(1)(b) or (2))

22 Section 60 amended (Effect of review or other proceeding on adjudicator's determination under section 48(1)(a))

23 Section 61 repealed (Consequence of not complying with adjudicator's determination under section 48(1)(b) or (2))

24 Sections 62 to 64 and 67 repealed

24A Section 66 amended (Claimant may seek fresh adjudication if no adjudicator’s notice of acceptance received or dispute not determined)

24B Section 71 amended (Application of other enactments to adjudications)

Review and enforcement of adjudictor's determination

25 Part 4 heading replaced

26 New subpart 1AA of Part 4 inserted

27 Subpart 1 of Part 4 repealed

28 Section 73 amended (Enforcement of adjudicator's determination)

29 Section 74 amended (Defendant may oppose entry as judgment)

30 Section 75 amended (Entry as judgment if defendant takes no steps)

Part 3
Amendments to miscellaneous provisions

30A Section 80 amended (Service of notices)

30B Section 82 amended (Regulations)

31 New section 83 inserted (Secretary may require adjudication information)

32 New Schedule inserted

Schedule
New Schedule inserted


The Parliament of New Zealand enacts as follows:

1 Title
  • This Act is the Construction Contracts Amendment Act 2013.

2 Commencement
  • This Act comes into force on 1 November 2014.

2 Commencement
  • (1) Section 8BC comes into force on 31 March 2016.

    (2) The rest of this Act comes into force on 1 July 2015.

3 Principal Act
  • This Act amends the Construction Contracts Act 2002 (the principal Act).

Part 1
Amendments to preliminary provisions

4 Section 4 amended (Overview)
  • (1) In section 4(c) and (e), delete progress.

    (2) Replace section 4(d) with:

    • (d) default provisions relating to payments are set out in sections 15 to 18:.

    (3) Replace section 4(f) to (h) with:

    • (f) provisions granting a party to a construction contract who is owed money a statutory right to suspend work until payment is made are set out in section 24A:

    • (g) provisions relating to the adjudication of disputes are set out in Part 3:

    • (h) provisions enabling an adjudicator's determination to be reviewed or enforced are set out in Part 4:.

5 Section 5 amended (Interpretation)
  • (1) In section 5, repeal the definitions of commercial construction contract, residential construction contract, and residential occupier.

    (2) In section 5, definition of construction contract, replace paragraph (a) with:

    • (a) means a contract for carrying out construction work; and.

    (2A) In section 5, replace the definition of construction site with:

    construction site means—

    • (a) the land on which the claimant has been carrying out construction work under the relevant construction contract:

    • (b) in relation to related services, means the land or premises that are the subject of the contract.

    (3) In section 5, replace the definition of defendant with:

    defendant means a party—

    • (a) against whom an adjudication determination is made; and

    • (b) against whom enforcement of the determination is sought.

    (4) In section 5, replace the definitions of plaintiff and progress payment with:

    plaintiff means a party—

    • (a) in whose favour an adjudication determination is made; and

    • (b) who seeks enforcement of the determination

    progress payment

    • (a) means a payment for construction work carried out under a construction contract that is in the nature of an instalment (whether or not of equal value) of the contract price for the contract; and

    • (b) includes any final payment under the contract; but

    • (c) does not include an amount that is, or is in the nature of, a deposit under the contract.

    (5) In section 5, definition of working day, replace paragraph (c) with:

    • (c) for the purposes of sections 18, 22, 24A, 33, 35 to 37, 35A to 37A, 46, 47, 59, and 66, a day in the period commencing on 24 December in any year and ending with the close of 5 January in the following year; and.

    (6) In section 5, definition of working day, paragraph (d), replace 53 with 71B.

    (7) In section 5, insert in their appropriate alphabetical order:

    chief executive means the chief executive of the department responsible for the administration of this Act

    premises, in relation to related services, includes intended premises

    related services means construction work of the kind referred to in section 6(1A).

6 Section 6 amended (Meaning of construction work)
  • After section 6(1), insert:

    • (1A) Construction work includes—

      • (a) design or engineering work carried out in New Zealand in respect of work of the kind referred to in subsection (1)(a) to (d) and (f):

      • (b) quantity surveying work carried out in New Zealand in respect of work of the kind referred to in subsection (1)(a) to (g).

7 Section 9 amended (When Act applies: general)
  • (1) In section 9, after Subject to, insert subsections (2) and (3) and.

    (1) In section 9, replace sections 10 and 11 with section 11.

    (2) In section 9, insert as subsection (2):

    • (2) Despite subsection (1), this Act only applies to contracts for related services—

      • (a) entered into on or after 1 November 2015; or

      • (b) renewed for a further term on or after 1 November 2015 (except that this Act has effect only in relation to obligations that are incurred or undertaken on or after that date).

    • (3) The Schedule contains transitional provisions relating to amendments made to this Act on 1 November 2014.

    (2) In section 9, insert as subsections (2) and (3):

    • (2) Despite subsection (1), this Act only applies to contracts in relation to related services if—

      • (a) the contract is entered into on or after 31 March 2016; or

      • (b) the contract is renewed for a further term on or after 31 March 2016 but only in relation to obligations that are incurred or undertaken on or after that date; or

      • (c) the parties agree that the Act will apply.

    • (3) The Schedule contains transitional provisions relating to the application of amendments made to this Act by the Construction Contracts Amendment Act 2014.

8 Section 10 repealed (When Act applies: residential construction contracts)
  • Repeal section 10.

8A Section 11 amended (When Act does not apply)
  • (1) In section 11(b)(ii)(C), after contract, insert :.

    (2) After section 11(b)(ii), insert:

    • (iii) provisions under which a party undertakes to carry out construction work as a condition of an agreement for the sale and purchase of second-hand chattels, fixtures, or fittings; or

    • (iv) provisions regarding property management.

    • (iv) provisions regarding the carrying out by a party of services that—

      • (A) are for the operation or management of any building or structure or any other part of any land; and

      • (B) are not construction work; and

      • (C) do not relate to construction work.

Part 2
Amendments to principal provisions

Payments

8AB Section 13 amended (Conditional payment provisions ineffective)
  • (1) In section 13(1)(b), delete progress.

    (2) In section 13(2), definition of conditional payment provision of a construction contract, after paragraph (c), insert:

    • (ca) that is of a kind described in section 18I(1)(a); or.

8AC Subpart 2 heading in Part 2 replaced
  • In Part 2, replace the subpart 2 heading with:

    Subpart 2Payment provisions.

8AD Cross-heading above section 14 amended
  • In the cross-heading above section 14, delete progress.

8B Section 14 amended (Parties free to agree on progress payment provisions in construction contract)
  • (1) In the heading to section 14, delete progress.

    (2) In section 14(a), delete progress.

    (3) In section 14, insert as subclause (2):

    • (2) To avoid doubt, the parties to a construction contract may expressly agree to a single payment under subsection (1)(a).

8BA Cross-heading above section 15 amended
  • In the cross-heading above section 15, delete progress.

8BB Section 18 replaced (Due date for payment)
  • Replace section 18 with:

    18 Due date for payment
    • A payment (as defined in section 19) claimed in a payment claim served under section 20 becomes due and payable on the date occurring 20 working days after the payment claim is served.

8BC New subpart 2A of Part 2 inserted
  • After section 18 (as replaced by section 8BB), insert:

    Subpart 2ARetention money

    18A Interpretation
    • In this subpart, unless the context otherwise requires, retention money means an amount withheld by a party to a construction contract (party A) from an amount payable to another party to the contract (party B) as security for the performance of party B’s obligations under the contract.

    18B Application of subpart
    • (1) This subpart applies to commercial construction contracts where the amount of retention money is more than the de minimis amount.

      (2) Regulations may prescribe the de minimis amount for the purpose of subsection (1).

    18C Trust over retention money
    • (1) All retention money must be held on trust by party A, as trustee, for the benefit of party B.

      (2) A trust over retention money ends when—

      • (a) the money is paid to party B; or

      • (b) party B, in writing, agrees to give up any claim to the money; or

      • (c) the money ceases to be payable to party B under the contract or otherwise by operation of law.

    18D Accounting
    • (1) Party A must keep proper accounting records of all retention money held that—

      • (a) correctly record all dealings and transactions in relation to the money; and

      • (b) comply with generally accepted accounting principles; and

      • (c) are readily and properly auditable.

      (2) Party A must make accounting records of retention money available for inspection by party B at all reasonable times and without charge.

      (3) Regulations may further prescribe methods of accounting for retention money.

    18E Use of retention money
    • (1) Party A must not appropriate any retention money to a use other than to remedy defects in the performance of party B’s obligations under the contract.

      (2) Retention money held in trust by party A—

      • (a) does not need to be paid into a separate trust account; and

      • (b) may be commingled with other moneys.

    18F Investment of retention money
    • (1) Retention money may be invested by party A in accordance with the Trustee Act 1956 in relation to investment of trust funds.

      (2) If, upon the realisation of any investment, the amount received is—

      • (a) less than the amount invested, party A must make up the difference between the amount invested and the amount realised:

      • (b) more than the amount invested, party A may retain the benefit of the amount that exceeds the amount invested.

      (3) Party A may retain the benefit of any interest earned on retention money on or before the date on which it is payable under the contract.

    18G Interest on late payment
    • (1) Interest on retention money is payable to party B from the date on which it is payable under the contract until the date on which it is paid.

      (2) The interest referred to in subsection (1) is payable—

      • (a) at the rate agreed under the contract; or

      • (b) if the parties have not agreed a rate under the contract, at the rate or rates prescribed in regulations.

    18H Protection of retention money
    • Retention money—

      • (a) is not available for the payment of debts of any creditor of party A (other than party B):

      • (b) is not liable to be attached or taken in execution under the order or process of any court at the instance of any creditor of party A (other than party B).

      Compare: 2006 No 1 s 113(1)

    18I Prohibited provisions
    • (1) Any term in a construction contract is void that purports to—

      • (a) make the payment of retention money conditional on anything other than the performance of party B’s obligations under the contract; or

      • (b) make the date on which payment of retention money is payable later than the date on which party B has performed all of its obligations under the contract to the standard agreed under the contract; or

      • (c) require party B to pay any fees or costs for administering a trust under this subpart.

      (2) Any provision in a construction contract is void if the purpose, or one of the purposes, of the provision, is to avoid the application of any of the provisions of this subpart.

8C Section 19 amended (Interpretation)
  • In section 19, replace the definition of claimed amount with:

    claimed amount means an amount, specified in a payment claim, that the payee claims to be due for—

    • (a) construction work carried out; or

    • (b) liquidated damages under the contract; or

    • (c) breach of a term implied into the contract under the Building Act 2004 or any other enactment.

8C Section 19 amended (Interpretation)
  • (1) In section 19, replace the definition of claimed amount with:

    claimed amount means an amount of a payment, specified in a payment claim, that the payee claims to be due.

    (2) In section 19, definition of payee, delete progress.

    (3) In section 19, after the definition of payer, insert:

    payment means—

    • (a) a progress payment for construction work carried out under a construction contract; or

    • (b) another type of payment under a construction contract to which a party who has agreed to carry out construction work under the contract is entitled for, or in relation to, construction work carried out by that party under the contract.

    (4) In section 19, definition of scheduled amount, replace progress with a.

9 Section 20 amended (Payment claims)
  • (1) In section 20(1), replace each progress with a.

    (2) Replace section 20(1)(b) with:

    • (b) if the contract does not provide for the matter in the case of a progress payment, at the end of the relevant period referred to in section 17(2); or

    • (c) if the contract does not provide for the matter in the case of a single payment expressly agreed under section 14(1)(a), following the completion of all the construction work to which the contract relates.

    (3) In section 20(2)(b) and (c), delete progress.

    (4) In section 20(2)(d), replace indicate with state.

    (5) In section 20(3), replace If a payment claim is served on a residential occupier, it with A payment claim.

9A Section 21 amended (Payment schedules)
  • In section 21(2)(c), replace indicate with state.

9B Section 22 amended (Liability for paying claimed amount)
  • In section 22, delete progress.

9C Section 23 amended (Consequences of not paying claimed amount where no payment schedule provided)
  • In section 23(1)(b), delete progress.

9D Section 24 amended (Consequences of not paying scheduled amount in manner indicated by payment schedule)
  • In section 24(1)(d), delete progress.

10 New subpart 4 of Part 2 inserted
  • After section 24, insert:

    Subpart 4Suspension of work

    24A Suspension of construction work
    • (1) A party who carries out construction work under a construction contract (party A) has the right to suspend work under that contract if—

      • (a) any of the following circumstances applies:

        • (i) a claimed amount is not paid in full by the due date for its payment, and no payment schedule has been provided by the party who it is claimed is liable for the payment (party B):

        • (ii) a scheduled amount is not paid in full by the due date for its payment even though a payment schedule given by party B indicates a scheduled amount that party B proposes to pay to party A:

        • (iii) party B has not complied with an adjudicator's determination that party B must pay an amount to party A by a particular date; and

      • (b) party A has served on party B a notice under section 23(2)(b), 24(2)(b), or 59(2)(b), as the case may be; and

      • (c) the amount mentioned in paragraph (a)(i) or (ii) is not paid, or the determination mentioned in paragraph (a)(iii) is not complied with, within 5 working days after the date of that notice.

      (2) If party A exercises the right conferred by subsection (1), party A—

      • (a) is not in breach of the construction contract; and

      • (b) is not liable for any loss or damage suffered by party B, or by any person claiming through party B; and

      • (c) is entitled to an extension of time to complete the contract, but is not entitled solely by reason of this Act to recover any costs incurred as a consequence of the extension of time; and

      • (d) keeps party A's rights under the contract, including any right to terminate the contract; and

      • (e) may at any time lift the suspension, even if the amount has not been paid or the determination has not been complied with.

      (3) To avoid doubt, subsection (2)(c) does not affect party A's rights to recover (whether in an adjudication or otherwise) any costs incurred as a consequence of the extension of time that exist other than solely by reason of this Act, nor does it add anything to those rights.

      (4) If party A exercises the right conferred by subsection (1), the exercise of that right does not—

      • (a) affect any rights that would otherwise have been available to party A under the Contractual Remedies Act 1979; or

      • (b) enable party B to exercise any rights that may otherwise have been available to party B under that Act as a direct consequence of party A exercising the right conferred by subsection (1).

      (5) The right to suspend work under a construction contract ceases when party B pays the amount in full or complies with the adjudicator's determination.

      Compare: 2002 No 46 s 72.

Adjudication of disputes

10A Section 25 amended (Right to refer disputes to adjudication)
  • Replace section 25(2) with:

    • (2) An example of a dispute is a disagreement between the parties to a construction contract about—

      • (a) whether an amount is payable under the contract (for example, a progress payment) or the reasons given for non-payment of that amount; or

      • (b) whether there has been a breach of a term of the contract (including a term implied into the contract under the Building Act 2004 or any other enactment).

11 Section 26 amended (Relationship between Part and other dispute resolution procedures)
  • In section 26(3), replace However, an with An.

12 Section 28 amended (How to initiate adjudication)
  • After section 28(2), insert:

    • (3) A notice of adjudication must also set out prominently, in the prescribed form (if any),—

      • (a) a statement of the respondent's rights and obligations in the adjudication; and

      • (b) a brief explanation of the adjudication process.

13 Section 31 replaced (When claimant may not seek approval for issue of charging order)
  • Replace section 31 with:

    31 When claimant may not seek approval for issue of charging order
    • (1) A claimant may not seek any of the matters referred to in section 29 or 30 against an owner who is—

      • (a) an individual who is occupying, or intends to occupy, wholly or mainly as a dwellinghouse, the premises that are the subject of a construction contract:

      • (b) a trustee of a family trust, where the premises that are the subject of a construction contract are—

        • (i) owned by the trust; and

        • (ii) occupied, or intended to be occupied, wholly or mainly as a dwellinghouse, by any beneficiary of the trust.

      (2) In subsection (1), family trust means a trust that is established primarily to benefit a natural person for whom the settlor has natural love and affection.

    31A Compliance with requirements of Act relating to supply of certain information
    • (1) No notice of adjudication is invalid for any failure to comply strictly with the requirements of section 28(2)(a) to (d) and (g) as long as—

      • (a) the notice is in writing; and

      • (b) the nature of the dispute and the names of the parties involved are stated in the notice; and

      • (c) any non-compliance does not mislead or unjustly affect the interests of the recipient.

      (2) If a notice of adjudication fails, in accordance with section 28(2)(e) or (f), to state whether a charging order is being sought, approval for the issue of a charging order may not be given.

      (3) A notice of adjudication that fails to comply with section 28(3) has no effect and—

      • (a) this Part applies as if no notice of adjudication had been served; and

      • (b) the claimant may serve on the respondent a new notice of adjudication that complies with section 28(3).

      (4) If a party to an adjudication wishes to provide another party or the adjudicator with copies of, or extracts from, the construction contract but is for any reason unable to do so (for example, in a case where the contract is oral), that party may provide the missing information in the form of a statutory declaration together with any supporting documents that are available.

      Compare: 2002 No 46 s 64.

13AA Section 32 amended (Owner who is not respondent is party to adjudication proceedings)
  • In section 32(2)(a), after 37,, insert 37A,.

13A Section 33 amended (Selection of adjudicator)
  • Replace section 33(2)(b) with:

    • (b) for the purposes of subsection (1)(c), 5 working days after the notice of adjudication has been served or any further period that the parties may agree; and

    • (c) for the purposes of subsection (1)(d), 2 to 5 working days after the notice of adjudication has been served or any further period that the parties may agree.

13B Section 34 amended (Eligibility criteria for adjudicators)
  • Replace section 34(3) with:

    • (3) A person is not eligible to be an adjudicator in relation to a construction contract if that person has a conflict of interest (whether financial or otherwise).

    • (4) However, subsection (3) does not apply if—

      • (a) the person has disclosed the conflict of interest in accordance with section 35(3)(a); and

      • (b) the parties to the adjudication have confirmed that they agree to the person acting as adjudicator as referred to in section 35(3)(b).

14 Section 35 amended (Appointment of adjudicator)
  • (1) In section 35(2), after notice of acceptance, insert (a notice of acceptance).

    (2) Repeal section 35(4) and (5).

    (3) In section 35(6), replace that confirms the person meets the eligibility criteria for adjudicators under section 34 with that complies with section 35A.

14 Section 35 replaced (Appointment of adjudicator)
  • Replace section 35 with:

    35 Appointment of adjudicator
    • (1) This section applies if a person (the selected person) is requested to act as an adjudicator in accordance with section 33.

      (2) If the selected person is willing and able to act, the selected person must serve a notice of acceptance.

      (3) If the selected person has a conflict of interest (see section 34(3)) but is otherwise willing and able to act,—

      • (a) the selected person must disclose (orally or in writing) the conflict of interest to the parties to the adjudication and, as the case may be, the nominating body or the authorised nominating authority; and

      • (b) if the parties then confirm (orally or in writing) to the selected person that they agree to the selected person acting, the selected person must serve a notice of acceptance.

      (4) The selected person is appointed as adjudicator on serving the notice of acceptance under subsection (2) or (3)(b).

      (5) The notice of acceptance, and the service of the notice, must comply with section 35A (otherwise the notice has no effect and subsection (4) does not apply).

14A New section 35A inserted (Notice of acceptance)
  • After section 35, insert:

    35A Notice of acceptance
    • (1) A notice of acceptance must be in the form (if any) prescribed in regulations made under this Act.

      (2) A notice of acceptance that fails to confirm that the adjudicator meets the eligibility criteria for adjudicators under section 34 has no effect.

      (2) A notice of acceptance must confirm that the selected person meets the eligibility criteria for adjudicators under section 34.

      (3) A notice of acceptance must be served on the parties to the adjudication and, as the case may be, the nominating body or the authorised nominating authority.

      (4) A notice of acceptance must be served within 2 working days of the selected person receiving the request to act as adjudicator.

16 Section 37 amended (Response to adjudication claim)
  • (1) Replace section 37(1) with:

    • (1) A respondent may serve a written response to the adjudication claim on the adjudicator—

      • (a) within 5 working days after receiving that claim or the adjudicator's notice of acceptance (whichever is the later); or

      • (b) within any further time that the parties to the adjudication agree; or

      • (c) within any further time that the adjudicator allows.

    (2) After section 37(3), insert:

    • (4AA) Subsection (4) applies if, before the end of the period referred to in subsection (1)(a), the respondent requests additional time to serve a written response.

    • (4) For the purpose of subsection (1)(c), an adjudicator—

      • (a) must allow the respondent additional time to serve a written response if the adjudicator considers it necessary—

        • (i) having regard to the size or complexity of the claim; or

        • (ii) because, in the adjudicator's opinion, the claim has been served with undue haste and, as a result, the respondent has had insufficient time to prepare his or her response:

      • (b) may allow the respondent additional time to serve a written response if the adjudicator considers that additional time is reasonably required for any reason.

16A New section 37A inserted (Reply to response to adjudication claim)
  • After section 37, insert:

    37A Reply to response to adjudication claim
    • (1) A claimant may serve on the adjudicator a written reply to the response under section 37(1).

      (2) The claimant's written reply must be served within 5 working days after a copy of the response is served on the claimant under section 37(3).

      (3) The claimant must serve a copy of the reply and any accompanying documents on the respondent and every other party to the adjudication either before or immediately after they are served on the adjudicator.

      (4) An adjudicator who receives a claimant's written reply under subsection (1) may—

      • (a) refuse to consider any new material or issues raised in the reply:

      • (b) allow the respondent up to 2 working days to serve a rejoinder to the claimant's reply.

17 New sections 38A and 38B inserted
  • After section 38, insert:

    38A Special provisions for adjudication if approval for charging order sought by claimant
    • An adjudication in which the claimant seeks approval for the issue of a charging order in respect of a construction site must be conducted by an adjudicator who—

      • (a) is nominated for the purpose by an authorised nominating authority; and

      • (b) has the specific additional qualifications, expertise, and experience that may be prescribed for the purposes of this section (if any).

      Compare: 2002 No 46 s 63

    38B Parties may be represented at adjudication proceedings
    • (1) Any party to a dispute that has been referred to adjudication may be represented by the representatives (whether legally qualified or not) that the party considers appropriate.

      (2) Subsection (1) is subject to the adjudicator's power to direct that the number of representatives present at a conference of the parties is to be limited to allow for the efficient conduct of proceedings.

      Compare: 2002 No 46 s 67.

17A Section 45 amended (Adjudicator’s determination: matters to be considered)
  • (1) In section 45(c), after 36, insert and the claimant’s written reply (if any) referred to in section 37A.

    (2) In section 45(d), after 37, insert and the respondent’s rejoinder (if any) referred to in section 37A(4)(b).

18 Section 47 amended (Adjudicator's determination: form)
  • (1AA) After section 47(1)(b)(i), insert:

    • (ia) must be dated; and.

    (1) In section 47(1)(b)(iii), delete in a case where the adjudicator determines that a party to the adjudication is liable to make a payment,.

19 Sections 52 to 55 repealed
  • Repeal sections 52 to 55.

20 Section 58 amended (Enforceability of adjudicator's determination)
  • (1) In section 58(2), replace is not enforceable with is enforceable in accordance with section 59A.

    (2) Repeal section 58(3).

21 New section 59A inserted (Consequence of not complying with adjudicator's determination under section 48(1)(b) or (2))
  • After section 59, insert:

    59A Consequence of not complying with adjudicator's determination under section 48(1)(b) or (2)
    • (1) This section applies if a party against whom an adjudication determination is made fails to comply with the adjudicator's determination in respect of rights and obligations under the contract.

      (2) The party in whose favour the determination was made may apply for the determination to be enforced by entry as a judgment in accordance with sections 73 to 78 (but only after such date, if any, specified in the adjudicator's determination for compliance).

22 Section 60 amended (Effect of review or other proceeding on adjudicator's determination under section 48(1)(a))
  • In section 60 and the heading to section 60, delete under section 48(1)(a).

23 Section 61 repealed (Consequence of not complying with adjudicator's determination under section 48(1)(b) or (2))
  • Repeal section 61.

24 Sections 62 to 64 and 67 repealed
  • Repeal sections 62 to 64 and 67.

24A Section 66 amended (Claimant may seek fresh adjudication if no adjudicator’s notice of acceptance received or dispute not determined)
  • (1) In the heading to section 66, replace if no adjudicator’s notice of acceptance received or dispute not determined with in certain circumstances.

    (2) Replace section 66(1)(a) with:

    • (a) a person (the selected person) has been requested to act as an adjudicator in accordance with section 33 and—

      • (i) the selected person indicates that he or she is unwilling or unable to act; or

      • (ii) the claimant does not, within 5 working days of the selected person receiving the request, receive from the selected person a notice of acceptance under section 35(2) or (3)(b) in relation to which the requirements of section 35A are met; or.

    (3) In section 66(1)(b), replace accepts with is appointed for.

24B Section 71 amended (Application of other enactments to adjudications)
  • (1) In section 71(2)(c), after 1993, insert ; and.

    (2) After section 71(2)(c), insert:

    • (d) civil proceedings against a person for the purposes of section 393(2) of the Building Act 2004.

Review and enforcement of adjudictor's determination

25 Part 4 heading replaced
  • Replace the Part 4 heading with:

    Part 4
    Review and enforcement of adjudicator's determination.

26 New subpart 1AA of Part 4 inserted
  • After the Part 4 heading, insert:

    Subpart 1AAReview of adjudicator's determination

    Review of adjudicator's determination in respect of owner who is not respondent

    71A Owner who is not respondent may apply to District Court for review of adjudicator's determination
    • (1) An owner who is not a respondent may apply to a District Court for a review of—

      • (a) an adjudicator's determination that the owner is jointly and severally liable with the respondent to make a payment to the claimant; and

      • (b) an adjudicator's approval for the issue of a charging order in respect of the construction site.

      (2) A District Court has the jurisdiction to hear and determine an application for review under this section despite any limits imposed on District Courts in their ordinary civil jurisdiction by sections 29 to 34 of the District Courts Act 1947.

      Compare: 2002 No 46 s 52

    71B Procedure for seeking review
    • (1) An application for review under section 71A must be made by filing a notice, in the prescribed form (if any), in the District Court nearest to the place at which the adjudication proceedings to which the application for review relates were held.

      (2) The notice must be filed—

      • (a) within 20 working days after the date of the determination to which the application for review relates; or

      • (b) within any further time that the District Court may allow on application made before or after the expiration of the period referred to in paragraph (a).

      Compare: 2002 No 46 s 53

    71C Powers of District Court on review
    • (1) For the purpose of hearing the application for review, the District Court—

      • (a) must conduct the review as a hearing de novo of the relevant dispute; and

      • (b) has all the powers, duties, functions, and discretions of the adjudicator in making the determination to which the application for review relates; and

      • (c) has all the powers vested in a District Court in its civil jurisdiction.

      (2) On hearing the application for review, the District Court may—

      • (a) quash the determination, and substitute for it any other determination that the adjudicator could have made in respect of the original proceedings; or

      • (b) refuse the application.

      (3) A District Court's determination under subsection (2)(a)

      • (a) has effect as if it were a determination made by an adjudicator for the purposes of this Act; and

      • (b) is not a final determination of the dispute between the claimant and respondent to the adjudication under review.

      (4) Subsection (3)(b) does not prevent any proceedings between the claimant and respondent to the adjudication under review from being heard and determined at the same time as the application for review under this section.

      Compare: 2002 No 46 s 54

    71D Effect of review on adjudicator's determination
    • An application for review under section 71A does not operate as a stay of the adjudicator's determination unless a District Court Judge, on application, so determines.

      Compare: 2002 No 46 s 55.

27 Subpart 1 of Part 4 repealed
  • Repeal subpart 1 of Part 4.

28 Section 73 amended (Enforcement of adjudicator's determination)
  • (1) Repeal section 73(1).

    (2) Replace section 73(2) with:

    • (2) A plaintiff may apply for an adjudicator's determination to be enforced by entry as a judgment in accordance with this subpart.

    (3) Replace section 73(5) with:

    • (5) Despite subsection (2), a plaintiff in whose favour a determination has been made may only apply for that determination to be enforced by entry as a judgment—

      • (a) if any conditions imposed by the adjudicator have been met; and

      • (b) after the date (if any) specified in the adjudicator's determination for compliance.

29 Section 74 amended (Defendant may oppose entry as judgment)
  • (1) In section 74(1), replace 15 with 5.

    (2) After section 74(2)(c), insert:

    • (d) that due to a change in circumstances, which was not caused in any part by the defendant, it is not possible to comply with the adjudicator's determination:

    • (e) that the date (if any) specified in the adjudicator's determination for compliance has not (yet) passed.

    (3) After section 74(2), insert:

    • (2A) Subsection (2)(d) applies only if the adjudicator’s determination is a determination under section 48(1)(b) or (2).

30 Section 75 amended (Entry as judgment if defendant takes no steps)
  • In section 75, replace 15 with 5.

Part 3
Amendments to miscellaneous provisions

30A Section 80 amended (Service of notices)
  • In section 80(d), replace in the prescribed manner (if any) with in the manner (if any) prescribed in regulations made under this Act.

30B Section 82 amended (Regulations)
  • In section 82, insert as subsection (2):

    • (2) Regulations prescribing the form of a notice of acceptance may (without limitation) require that the notice—

      • (a) state that the adjudicator has accepted appointment as adjudicator:

      • (b) if the adjudicator has been appointed by a nominating body agreed between the parties, state that the nominating body has appointed the adjudicator because the parties could not or did not agree on an adjudicator:

      • (c) if an authorised nominating authority has appointed the adjudicator, state that the authorised nominating authority has appointed the adjudicator because the parties could not or did not agree on an adjudicator:

      • (d) confirm that the adjudicator meets the eligibility criteria for adjudicators under section 34:

      • (e) set out all of the relevant time frames for the adjudication process:

      • (f) identify which time frames have already commenced:

      • (g) note which time frames the respondent can ask the adjudicator to extend:

      • (h) indicate the likely costs of the adjudication:

      • (i) identify alternative options which may be available to the parties to resolve their dispute (other than by continuing the adjudication process).

31 New section 83 inserted (Secretary may require adjudication information)
  • After section 82, insert:

    83 Secretary may require adjudication information
    • (1) The chief executive may, for statistical or research purposes, require adjudicators, nominating authorities, or nominating bodies to provide any information (in their possession or under their control) regarding adjudications, including, for example, the number, nature, or outcome of adjudications initiated under this Act.

      (2) A person must not disclose information under subsection (1) except—

      • (a) with the consent of the relevant party to the dispute and any identifiable person to whom it relates; or

      • (b) to the extent that the information is already in the public domain; or

      • (c) in statistical or summary form arranged in a manner that prevents any information disclosed from being identified by any person as relating to any particular person; or

      • (d) if the information is to be used for statistical or research purposes and will not be published in a form that could reasonably be expected to identify any particular person.

32 New Schedule inserted (Transitional provisions relating to the 2014 amendments)
  • Insert the Schedule set out in the Schedule to of this Act.


Schedule
New Schedule inserted

s 32

Schedule
Transitional provision relating to the 2014 amendments

s 7(3) 9(3)

Transitional provision relating to 2014 amendments
  • The amendments made to this Act by the Construction Contracts Amendment Act 2014 do not apply to a construction contract that was entered into before 1 November 2014 1 July 2015 unless—

    • (a) the contract is renewed for a further term on or after 1 November 2014 1 July 2015; or

    • (b) the parties agree that the amendments will apply.