The New Zealand Construction Contracts Amendment Act 2015 - For Better or Worse?

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David Finnie
Naseem Ameer Ali

Abstract

Adjudication has been statutorily introduced as an alternative dispute resolution method in 14 jurisdictions including New Zealand. Whilst adjudication under the New Zealand Construction Contracts Act 2002 has been hailed a success, further refinements were proposed in the Construction Contracts Amendment Bill first published in 2013. As part of the legislative process, 48 submissions were made to the Commerce Committee. There was general support for most of the amendments, but some parties expressed concerns on some of the changes. A documentary analysis of the Amendment Bills and submissions to the Commerce Committee was made to critically evaluate the changes proposed and establish if they were improvements. The findings show the major changes proposed include (i) removing most of the distinctions between the treatment of residential and commercial contracts under the Act, (ii) extending the scope of the Act to apply to contracts for certain professional services, (iii) removing the distinction between enforcement of payment determinations and of those relating to rights and obligations, and (iv) making the enforcement process more efficient. The findings also show that during a period of over two years from when the Bill was first introduced in January 2013, one other significant improvement for retentions to be held in trust was made. A few proposals to further refine the Bill such as the suggestion to mandate retentions to be kepts in a separate trust account were however not accepted. The Construction Contract Amendment Bill (Bill 97-3) was uninanimously passed during the third and final reading in Parliament on 20 October 2015 with most of the amendments coming into force on 1 December 2015, those incorporating professional services on 1 September 2016, and the retention provisions on 31 March 2017. Royal assent was given on 11 October 2015 leading to the enactment of the Construction Contracts Amendment Act 2015.

Article Details

Section
Viewpoints (Peer reviewed)
Author Biographies

David Finnie, Otago Polytechnic MNZIQS MNZIOB

Lecturer, Built Environment, School of Architecture, Building and Engineering, Otgao Polytechnic

Naseem Ameer Ali, Past President of the Royal Institution of Surveyors Malaysia [PPRISM] • Fellow of the Royal Institution of Surveyors Malaysia [FRISM] • Fellow of the Chartered Institute of Building, UK [FCIOB] PAGE 3 OF 23 • Fellow of the Chartered Institute of Arbitrators, UK [FCIArb] • Professional Member of the New Zealand Institute of Quantity Surveyors [MNZIQS] • Professional Member of the Royal Institution of Chartered Surveyors, UK [MRICS] • Registered Quantity Surveyor, Board of Quantity Surveyors Malaysia [Reg QS] • Member of the Association for Project Management, UK [MAPM] • Affiliate, Australian Institute of Quantity Surveyors [Affil AIQS] • Accredited Mediator, Panel on Construction Industry Development Board, Malaysia • Panel Adjudicator, Kuala Lumpur Regional Centre for Arbitration

Senior Lecturer, School of Engineering & Advanced Technology, Massey University