The Construction Contracts Act and Its Implications for Payment Defaults in New Zealand

摘要

The Construction Contracts Act (CCA) in New Zealand and similar legislation in other countries are designed primarily for mitigating payment problems in the construction industry. However, evidence abounds of payment problems in a number of countries, and it is significant that the problem has been increasing over the last four decades. The research in this paper, therefore, evaluates the effectiveness of the CCA provisions. Data to assess the implications of the CCA provisions on payment defaults was collected through semistructured interview questions with subject matter experts (SMEs). A total of 18 interviews were conducted with groups of practitioners comprising large, medium-size, and small contractors, subtrade contractors, legal experts, and dispute resolution service consultants. The data generated were collated and analyzed thematically. The results of the study investigations show that the CCA provisions are moderately effective, in the sense that there are arguments for and against its effectiveness. Generally, the CCA allows for faster payment dispute resolution, but it does not seem to guarantee payments unless the time frame for objection was shortened. Its effectiveness is reduced by the failure of construction parties to comply strictly with its requirements. There is also a lack of knowledge and understanding of the act by lower-tier parties to construction contracts. This study, therefore, recommends that the time required for respondents to oppose the enforcement of adjudication determinations be shortened. Reducing this time could enable the charging order provisions within the CCA to be more effective and would reduce the time for claimants to recover any adjudicated amount.