Related Services under the Construction Contracts Act 2002

The definition of construction work under section 6 of the Construction Contracts Act 2002 has, with effect from 1 September 2016, been extended to include related services, which are defined in the new subsection (1A) as including:

(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)

For architects, engineers and quantity surveyors, the protections for progress payments under the Act now apply.  Similarly, the provisions relating to adjudicating disputes under their appointment agreements also apply.


Judge orders mediation over wastewater plant dispute

After years of odour and insect problems with the Whanganui District Council’s wastewater treatment plant at Airport Road, the District Council has finally taken the step to sue the facility’s designers MWH Global.  The estimated cost of replacing the plant is reported to be $38 million, which is a significant burden for the people of Whanganui, and a potentially significant liability for MWH Global.

The relationships and responsibilities of contractors and consultants in infrastructure development can be complex, and liability for design and performance failures hard to pin; hence the truism that it is never a good idea to sue your consultants.  In a triumph of pragmatism over the thorny issues of liability in negligence, Justice Denis Clifford has ordered the parties to mediation.

If ever there was a case of a sensible suggestion, this must surely be it.  We can only hope for the sake of the people of Whanganui that both parties recognise the opportunity for what it is, and reach a realistic agreement to resolve the issue.


Securing Positive Project Outcomes using NEC3

The NEC3 suite of contracts is growing in use in New Zealand.  The contracts were used with apparent success for the development of the stadium and other facilities for the London Olympics in 2012, and it is the preferred form of contract by the Office of Government Commerce for all public private partnerships in the UK.

In NZ, the engineering and construction contract was used for the development of the Northland Events Centre for the Rugby World Cup in 2011.  At $16.5 million, the development was more modest that some others, but it was on time, within budget, and effective.

This paper was prepared for the NEC Users’ Group Australasia conference in Christchurch on 27 August 2013.


Time is up for the independent role of the Engineer?

Since the time of Thomas Telford and Isambard Kingdom Brunel (both Fellows of the Royal Society), and latterly the engineers from NASA who opened up space exploration, engineers have earned a place on a pedestal in public opinion.  It is hardly surprising, therefore, that they enjoy considerable professional esteem.

It is this esteem, and their undoubted professional skills, which resulted in the development of the special role of the Engineer in civil contracting.  The ambitious civil engineering and infrastructure development for which both Telford (roads, bridges and aqueducts) and Brunel (his railway bridges, tunnels and SS Great Britain) were justifiably famous carried with them significant risks – technological and financial risks, and inevitably the disputes which flowed from each of them.

Technological risks were matters for which engineers could provide design solutions. Financial risks needed to be balanced between the parties.  Disputes were another issue altogether. Ultimately, the challenge was to maintain the momentum of the project, while giving a workable decision on disputes until the whole substantive issue could be dealt with in court, or later in arbitration.

This paper was prepared for an AMINZ breakfast on 11 May 2010, then it grew a bit.