i-law

International Construction Law Review

HGCRA: A NEW ZEALAND VERSION

I N DUNCAN WALLACE, QC

1. Demonstrating the assiduity and long arm of the construction industry’s lobbies following their success in securing the passing of the English Housing Grants, Construction and Regeneration Act (HGCRA) in the last months of the English Conservative administration in 1996, and in persuading its Labour successor to disregard criticism and bring the Act into force in May 1998,1 this was followed in 1999 in New South Wales by that state’s Building and Construction Industry Security of Payment Act. There the English Act was very closely followed, though with two hugely important qualifications. First, the NSW statutory adjudicator’s jurisdiction in interim payment matters does not seem to extend to claims for damages for breach of contract by the defendant but is limited to enforcing the contract or statutory provisions for periodic payment ,2 and, secondly, it is in any case expressly limited to ordering the provision of security for sums found due by the adjudicator, with payment immediately enforceable only in the event of failure to provide the ordered security.
2. Disregarding the English Act’s simplistic invalidation of “pay when paid” provisions (in practice, of course, limited to subcontract settings), and the obviously unconsidered and potentially calamitous effect of expressly extending the jurisdiction of the statutory adjudicator to cover every or any dispute (so enabling contractors to pre-empt the administration by the owner’s A/E of most contracts’ termination remedies for contractor default or insolvency as well as any liquidated damages machinery for delay) the English Act is open to two main objections in the customer/consumer/ public interest, namely:

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