Court of Appeal rejects claim of negligent misstatement for code compliance certificate

Last week the Court of Appeal released their decision for the case of Invercargill City Council v Southland Indoor Leisure Centre Charitable Trust. This case arose from the collapse of the roof of the Invercargill community courts in 2010. The Trust, who owns the building, claimed the Council was negligent in issuing a code compliance…

CAMERON BURNELL/ FAIRFAX NZ

Aitchisons awarded costs in Fencegate

The long running Fencegate saga appears to be nearing a conclusion with the Aitchisons (those whose view had been blocked by the structure) being awarded $72,500 in costs. In making this ruling Environment Court Judge Dwyer held that the action of the Walmsleys in erecting the structure and the presence of the structure were offensive…

‘On demand’ no more

We often come across the sentiment that ‘on demand’ bonds provide an absolute entitlement to security, no questions asked. It is becoming clearer and clearer that this is no longer the case. Occasionally, a Beneficiary will attempt to place a call on the bond even though the Contractor is not strictly in default of the…

Scam hits construction industry

Be on the lookout for a new scam that is targeting the residential building industry. The scammers, believed to be based in Nigeria, have hacked builders’ email accounts and are sending bogus invoices to clients, with instructions to pay the money into a different account than usual. The scam has claimed thousands of dollars off…

Construction of Vector Arena credit: Grayson Engineering

Calling up a bond – Grounds for opposing a call

Mainzeal was engaged to construct Vector Arena. The contract required Mainzeal to provide a bond to secure Mainzeal’s performance under the contract. Mainzeal arranged for Great Lakes Reinsurance to provide this bond to the principal. Payment of the bond was conditional on an engineer’s certificate which was to state: that the contractor had defaulted; that…

Developer back-tracking over budget blow-out – VH Five SPV Limited v Kimble Contracting Limited

  Building company Kimble Contracting Limited entered into a fixed price agreement with property developer VH Five SPV Limited. As expected, the parties agreed the timing of payment claims, when the principal was to issue its payment schedules, and thereafter when payment of the scheduled amount would occur. Unusually in this contract, those ‘timetable’ terms…

Landlords, tenants, and building works

A recent judgment serves as a reminder for landlords to consider their obligations to their tenants when undertaking building works. In Alarm New Zealand Ltd v 15 Hopetoun Ltd, the plaintiff is a tenant of a commercial building in Freemans Bay. The building was sold to the defendant, who (unbeknownst to the tenant) obtained resource…