Subcontract payments

Recently there has been a lot of media coverage about Pera Te Amo and his crew from Complete Siteworks who ripped up the car park outside the Countdown supermarket in Ferrymead in April when the head contractor, Watts & Hughes, failed to pay one of its payment claims.

Last week the High Court ordered that Watts & Hughes must pay Complete Siteworks the claimed amount of $306,077.23.

The case is a typical example of a party enforcing its rights under the Construction Contracts Act 2002 (CCA) and is not a surprising result. A fundamental purpose of the CCA is to facilitate regular and timely payments between the parties to a construction contract.

The facts of this case are relatively complex, but in summary Complete Siteworks served a payment claim on 28 February 2014 and the judge held that Watts & Hughes failed to respond with a payment schedule by the due date. In that situation the CCA provides that the claimed amount in the payment claim becomes a debt due and must be paid.

However, the case doesn’t cover whether Complete Siteworks’ claim was for a valid amount that was payable under the contract. While the judgment refers to the rates applicable to part of the claim being disputed, the substance of that dispute would have to be referred to a separate claim. Moving forward it will be interesting to see whether Watts & Hughes challenge the substance of the claim.

For those who are interested, a copy of the judgment can be found here. If you have a question about any of the facts in the case we can provide further information in response to any questions in the comments below.

3 thoughts on “Subcontract payments

  1. Pingback: ‘Communication’ of the right to elect—more lessons from Watts & Hughes Construction v Complete Siteworks Company | CONSTRUCTION LAW BLOG

  2. Hi. Can we assume that if W&H were ordered to pay the claimed amount, that Complete Siteworks were also ordered to replace the siteworks that was removed that the claimed amount was for?

    • Hi Grant, thanks for your question.

      The answer is ‘no’, the court did not order Complete Siteworks to replace the siteworks.

      The court had to decide whether W&H was liable to pay the claimed amount because it failed to issue a payment schedule under the CCA. As noted above this case was not about the substance of the dispute and therefore the court had no power to order any replacement of the siteworks or any other actions in relation to the contract.

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