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Homebuild Homes Ltd v Birchler [2023] NZDC 1320

Published 19 June 2023

Reserved judgment — summary judgment — payment schedule — Construction Contracts Act 2002, ss 3, 20, 21, 22, 23, 24 & 79 — District Court Rules 2014, r 12.2 — Krukziener v Hanover Finance Ltd [2008] NZCA 1982; [2010] NZAR 307 — Gidden v IAG NZ Limited [2016] NZHC 948 — Salem Limited v Top End Homes Ltd CA169/05, 12 December 2005 — C J Parker Construction Ltd (in liq) v Ketan & Ors [2017] NZCA 3 — Marsden Villas Ltd v Wooding Construction Ltd [2006] 1 NZLR 177 — George Developments Ltd v Canam Construction Ltd [2006] 1 NZLR 177 — Demasol Limited v South Pacific Industrial Limited [2022] NZCA 480. The parties had entered a residential building contract for the construction of a house for the defendants. The contract stipulated a fixed price for the completed house, but also contained an addendum stating that the price did not include any additional engineering work that may become necessary during construction. The quote included a provisional sum of $35,000 for engineering work, but one of the plaintiff's directors told the defendants that this sum had been arrived at without an engineer design being done, so extra charges would be necessary. The plaintiff subsequently sent a series of invoices for engineering work to the defendants. The defendants objected to the invoices and refused to pay the amounts charged, saying that they had already paid the $35,000 for engineering work. The plaintiff filed proceedings, seeking summary judgment under the Construction Contracts Act (the Act) for the amount of $45,136.26. The Court observed that the Act sought to facilitate cashflow in the construction industry, which relies on prompt payments of amounts owing. If there is a dispute over an amount owing, the payer is under an obligation to provide a payment schedule that complies with s 21 of the Act. The plaintiff's claim was specific enough to comply with the requirements of the Act. However the defendants' responses to the claim did not meet the definition of a "payment schedule" under the Act: they were out of time, and did not state an alternative amount that the defendants were prepared to pay. The defendants' responses did not relieve them of their obligation to make prompt payment. The Court was satisfied that the defendants had no defence to the claim and entered summary judgment in the sum of $45,136.26, along with interest, late payment fees and recovery costs. Judgment Date: 10 February 2023.

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