May Construction News
Debate on construction related issues from alert level 3
On 1 May 2020, construction partner Janine Stewart joined Wynn Williams’ construction partner Rebecca Saunders in a debate facilitated by Peter Neven on issues, such as suspension and cost of compliance, arising on construction projects as New Zealand moves to alert level 3. Link to the full debate here.
COVID-19 and Consultants: Impact, Relief and (potential) Solutions
On 7 May 2020, construction partners Janine Stewart and Scott Thompson hosted an interactive webinar on ‘COVID-19 and Consultants: Impact, relief and (potential) solutions with the New Zealand Institute of Building‘. The session explored key contract issues for alert levels 3 and 4, and how consultant standard forms can do better around risk allocation.
Infrastructure roundtable for private financiers
On 8 May 2020, construction partner and Chair Sarah Sinclair, and banking and finance partners Kate Lane and Tom Fail presented alongside Hannah Crosby and Jon Grayson in an infrastructure roundtable for private financiers. Key takeout’s below:
- As the number of current infrastructure projects in New Zealand far exceeds the government’s funding allocation, this creates an opportunity for private investors to get involved in the infrastructure reference group.
- The infrastructure reference group is focussed on short-term, shovel-ready projects. Private investors should look to the pressures faced by local and central government and focus on developing solutions for those areas where the government faces fiscal constraints.
- Possible structures that will enable collaboration between the private sector and local government are:
- Amalgamation – to enable independent utilities to raise capital in their own right;
- Introduction of an independent regulator – the shift away from quasi-regulation through local authorities to regulation through an independent regulator will give private investors confidence of stability in permitted revenue streams; and
- Regional deals – tied to spatial plans and funding. This will enable the private sector to bring forward ideas for delivering projects in regions’ long-term spatial plans.
- Private investments are likely to be more sustainable, with the government having a role in facilitating these investments by ensuring contractual disputes are dealt with fairly and improving consenting processes.
- The clear need to fast-track projects during the COVID-19 crisis brings into question the efficacy of current consenting processes and highlights the scope for more fundamental reform to the Resource Management Act 1991.
Access to the full webinar here.
Briefing on RMA Fast Tracking in response to COVID-19
On 21 May 2020, environment and planning partner Rachel Devine hosted a webinar briefing on the RMA fast tracking process that is proposed by the Government to introduce a short-term consenting process for projects that can boost employment and economic recovery after COVID-19.
Supporting New Zealand’s economic recovery
On 26 May 2020, construction partner and Chair Sarah Sinclair joined prominent industry leaders Adrian Littlewood (Auckland International Airport) and Phil O'Reilly ONZM (Iron Duke) to explore what is required to support New Zealand's economic recovery – including the role of the private sector and what the future of air travel and freight may look like to assist tourism, trade, and investment flows into the country.
Article published in the New Zealand Law Journal: Technology — friend or foe?
Senior Associate, Christine Gordon and Senior Solicitor, Shukti Sharma’s article, first published in the New Zealand Law Journal, examines how practitioners can use Technology Assisted Review (TAR) to assist with the task of preparing discovery.
Two “at pace” consenting processes revealed
On 13 May 2020, our environment team published an article outlining the two broad approaches to speeding up consenting processes revealed by Cabinet papers. Certain types of projects for central and local government will bypass all standard environmental considerations and other projects will obtain access to quick decisions. These fast-tracking proposals will bring certainty for the construction industry around work and will create opportunities for other projects to proceed in both public and private sectors.
Why it’s time to pay attention to ‘no oral modification’ clauses
Partner, Travis Tomlinson and Solicitor, Katie Shorter discuss the status of ‘no oral modification’ clauses in New Zealand and why they are important clauses for parties to be aware of in their contracts.
Alaska Construction + Interiors Auckland Limited v Christopher James Lahatte
The Court clarifies the jurisdiction of adjudicators, in terms of their statutory function under s 48(1) of the Construction Contracts Act and held that the notice of adjudication can be superseded by the adjudication claim.
Haskell Construction Ltd v Ashcroft
The Court confirms the application of the doctrine of Issue Estoppel to adjudications to prevent a party from re-adjudicating an issue merely to seek a more favourable outcome. This decision also confirms that an adjudicator has jurisdiction to determine a person’s rights and obligations under an implied warranty and to determine the statutory remedy under the Building Act 2004.
Electrix Ltd v The Fletcher Construction Company Ltd
The Court held that letters of intent, related documents and negotiations between parties do not constitute a binding contract. It was also confirmed that a quantum meruit claim should reflect the costs of the services provided and the market value of the particular inputs used in the provision of the particular services.
RMA Fast-Tracking Bill Issued for Fast Recovery of the Economy
The government has confirmed that the Resource Management Act (RMA) consenting processes will be streamlined but concerns persist on how the RMA will be applied to facilitate recovery from COVID-19. It is suggested that parallel processes are required so projects move through the RMA fast-tracking at the same time as design, effects modelling, procurement and funding details are confirmed. Further, projects of all sizes, not just larger ones, need to be fast-tracked to ensure success and to get the country moving in the long term.
Increase in Housing Construction Costs over March Quarter
Housing construction costs rose 1% over the March quarter marking the 11th quarter, of the past 13 quarters, where construction costs have risen across New Zealand. This leaves the annual rate of cost inflation at 3.6%, running well ahead of general price pressures across the economy. New dwelling consents and consents for alterations and additions were at a historical high prior to lockdown.
Court Charges Against Owner of St Andrews Church Hall Building
St Andrews Church hall has been demolished after it was deemed at risk of collapse and ‘likely’ to cause injury or death. A Dangerous Building notice was initially issued after inspections deemed the building ‘immediately dangerous’. The owner has now been charged with failing to make the dangerous building safe under the Building Act and faces a penalty of up to $200,000.
8000 New Public Houses as Part of Government’s 2020 Budget
The Government has promised 8000 new public houses in their Budget which more than doubles the current programme. This intends to bring greater certainty to construction companies planning a path through the expected COVID-19 recession. However, the Government warned that many more houses were needed based on the 14,869 people who had registered on the public housing waiting list at the end of last year.
Free Construction Tertiary Courses as Part of Government’s 2020 Budget
The Government is spending $1.6 billion to make free tertiary courses in building, construction, agriculture and manufacturing from 1 July 2020. This package is expected to be valid for the next two years and aims to reduce unemployment to 4.2% within two years from a peak of 9.6%, as more than 1,000 New Zealanders a day went on the benefit last month due to the impact of COVID-19.
First Building Act case for a Commercial Building
A project manager of the Queenstown Kmart Building could face a fine of $38,000 for allowing serious faults in the building. The District Council was alerted of the issue and mitigation works were carried out to allow the safe completion of the building. The project manager accepted responsibility but denies directing the work. This is the first commercial case to be considered under the Building Act.
Shelly Bay Development Challenged for a Second Time
The $500 million redevelopment of the Old Shelly Bay defence base is being challenged by a Miramar interest group. The association argues that traffic in the area would worsen and ratepayers would face huge costs at a time when the city’s infrastructure was ‘failing’. This is the second time the group has challenged resource consent for the development arguing that the second resource consent grant was not supported by expert evidence, common sense or experience of its members.