September Construction News
MinterEllisonRuddWatts in the market
On 30 September 2020, our construction team partner Janine Stewart presented at RICS' Property and Construction Economic Outlook webinar, examining how commercial property and markets have been impacted by the COVID-19 pandemic. Alongside a panel of local experts, Janine discussed the current state of the industry and issues being faced by its professionals.
MinterEllisonRuddWatts has been named as a silver sponsor for the upcoming 9th International Society of Construction Law Conference 2021, which will be held in Auckland.
Strike out negligence claim appeal dismissed
MSC Consulting Group, a firm of consulting engineers, faced a claim of negligent misstatement by Oyster Management Group and Corinthian Trustees Limited in respect of seismic reports it prepared. The report stated that the building was seismically safe, but it has since been found to be severely earthquake prone and at risk of causing mass casualties. MSC argued in a claim of summary judgment that it had no duty of care to the subsequent purchasers of the building and had no idea they would be provided with the seismic reports. However, this was declined by the Court of Appeal and the case will go to trial.
The law of non-contractual quantum meruit
A well drafted contract can facilitate and contribute to a successful construction project. Ideally, contracts should be finalised and signed before any work is carried out on site. In practice, this does not always occur and is not always possible. It is not uncommon to encounter situations where work starts before the execution of a formal contract, and the anticipated contract never materialises. If the work performed by a contractor is not referable to any contract, how will the contractor be remunerated for its services?
September Market Activity
$34m reservoir relieves Auckland’s drought – and mayor wants 50m litres more out of Waikato
A newly completed water reservoir in Pukekohe means that Aucklanders have an extra 25 million litres of water to draw from a day. The reservoir is 20 metres high and stores the equivalent of 20 Olympic swimming pools. The reservoir stores water from Watercare’s Waikato water treatment plant before it is distributed through the wider Auckland network. Mayor Phil Goff is trying to get another 50 million litres from an agricultural user who has consent for 50 million litres from the river but is not using it.
Southern Response case may open the gates for up to 3000 claimants
Earlier this month the Court of Appeal found that Southern Response deceived a Christchurch couple by keeping secret a higher estimate to rebuild their quake-damaged home. The Crown has decided it will not appeal the decision. This may leave the Government open to hundreds of millions of dollars in pay outs to other homeowners in a similar position.
CLT takes timber structures to new heights
The development and introduction of cross-laminated timber (CLT) is causing a lot of excitement in the Australasian construction sector. CLT is a wood panel structural product suitable for load-bearing construction including multi-storey buildings. It is a wooden form of concrete tilt slab which is environmentally friendly and costs 10-15% less than concrete or steel equivalents. CLT panels have recently been introduced to New Zealand through a Nelson firm, XLam NZ Ltd, the only manufacturer of the product in the Southern Hemisphere.
The Christchurch regeneration project that is slowly sinking
The Cranford regeneration plan was the first plan prepared by Christchurch City Council under the Greater Christchurch Regeneration Act. It was intended to develop 400 new properties on the former wetland of Cranford Basin. However, three years on, the land remains empty. At the time the council approved the plan, two issues were noted as being unresolved:
- Regenerate Christchurch concerns that implementation would not be sufficiently expedited; and
- Mana whenua concerns over stormwater discharges.
There are signs that the stormwater concerns will be addressed, but to date, the council has not reached an agreement with the nine owners of the main block of land proposed for housing.
Kiwi road users being let down on road maintenance
A group of leading transport and infrastructure advocacy organisations have come together to demand an urgent action on road maintenance. The group says that the Government has missed a massive opportunity to get our roads back up to standard, and also to stimulate the economy, through the COVID-19 Response and Recovery Fund. The fund has committed over $620 million towards ‘shovel-ready’ transport projects to help generate economic activity, but none of this has been directed towards road maintenance. On 17 September 2020, Transport Minister Phil Twyford released the final Government Policy Statement on Land Transport (GPS 2021) which outlines the planned $48 billion investment in services and infrastructure over the next decade. The upper range of funding for state highway maintenance has been raised by $510 million.
Building on the rise in Christchurch as almost $1 billion of new homes approved
Home building is on the rise in Christchurch, due to a growing population and low interest rates synergising together to boost demand for properties. Over $1 billion worth of new homes have been approved in Christchurch in the past year. A total of 2900 new homes were consented by the Christchurch City Council over the last 12 months. Out of the homes consented for Christchurch, more than half were apartments, flats, townhouses or retirement units.
Subsidised arbitration and mediation services for commercial lease disputes kicks off
The Ministry of Justice is subsidising free arbitration and mediation services for small to medium-sized businesses and landlords who have not been able to agree on rent during lockdown restrictions. The subsidy will be available for six months until the end of March 2021 and provide up to $6000 for arbitration and $4000 for mediation. The subsidy is to be paid to the supplier of the services, with both the landlord and tenant needing to agree to take part. The subsidised dispute service is intended to settle any commercial rent disagreement quickly and cost efficiently, avoiding disputes in the court. Three providers have been chosen to provide the arbitration and mediation services, including FairWay, the New Zealand Dispute Resolution Centre, and Immediation.
Ebert director gets nothing from receivership
Ebert director Kelvin Hale has not been paid back any of $3.5 million he said was advanced to the collapsed construction company by him and another shareholder. The latest receiver's report for Ebert Construction by PwC said it distributed $1.8 million to first ranking security holder BNZ. Based on the report, Hale registered a $3.5 million general security agreement against Ebert Construction on 24 July 2018 on behalf of himself and another shareholder.