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

• “(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:”.

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

“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”.

“defendant means a party—

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

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

“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”.

• “(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”.

“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)”.

• “(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).”

• “(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) 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.”

• “(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.”

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

“Subpart 2—Payment provisions”.

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

“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.”

“Subpart 2A—Retention 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.”

“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”.

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

“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”.

• “(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.”

“Subpart 4—Suspension 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”.

• “(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).”

• “(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.”

“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”.

• “(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.”

• “(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).”

“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).”

“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.”

• “(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.”

• “(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.”

“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.”

“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”.

• “(ia) must be dated; and”.

“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).”

• “(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”.

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

“Part 4
“Review and enforcement of adjudicator's determination”.

“Subpart 1AA—Review 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”.

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

• “(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.”

• “(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.”

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

“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.”