High Court strict on payment schedules: clear, unequivocal, and on time

The High Court has this month confirmed the strict approach taken when determining whether a valid payment schedule for the purposes of the Construction Contracts Act 2002 has been issued within the time allowed in the contract.

In Sol Trustees Limited v Giles Civil Limited [2014] NZHC 1813, the applicant was attempting to set aside statutory demands that had been served after valid payment schedules were not supplied within the time frame.

The applicant asserted that the correspondence between the parties clearly indicated that the claim was disputed and constituted valid payment schedules although the judge disagreed and declined the applications to set aside the statutory demands.

The court highlighted that while there is no prescribed form that a payment schedule must adhere to, payment schedules must be clear and unequivocal, and identify the precise nature of the monetary dispute. The absence of a clear statement about a scheduled amount was seen as a ‘critical deficiency’ in one of the claims. In the Sol Trustees Limited case, a spreadsheet which had been issued in response to a payment claim was not enough to be considered a payment schedule. Although the spreadsheet detailed the alleged differences in costs and the position of the applicant, it did not sufficiently communicate that payment would be withheld and did not contain a scheduled amount.

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