Communique November 2017
With Christmas and the summer closedown on the horizon, the season for “ambush” under the Construction Contracts Act cometh.Each and every Payment Claim made under the CCA must be responded to with either payment in full, or a Payment Claim which establishes what sum is to be paid and why. (refer CCA s 21).It is not unknown for defects remediation to drag on, and for contractors to issue Payment Claims (perhaps on a monthly cycle) during that period whether or not the work done or the value of it changes. It is tempting for the contract administrator to ignore the umpteenth Payment Claim on the basis that the previous contract value sum and Payment Schedules and outstanding requirements are unchanged. Even more tempting in the pre-Christmas rush or subsequent summer closedown! But the reality is that if a Payment Claim is not responded to with a Payment Schedule, the whole of the claimed sum could be validated by default. (refer CCA s 22). There is a risk of the client chasing you for the overpayment.It is also debateable whether a quick email to the contractor along the lines of “we are not going to approve more claims for the same reasons as before” would be sufficient. See CCA s 21 for the content of a valid Payment Schedule. As far as explanations are concerned, there is no merit in brevity.Now that consultants are also entitled to invoice via Payment Claims under the CCA, you might rightly perceive that the above issues might be used to your advantage! If so, it is suggested that – if possible - each new claim be for a different sum which reflects some additional work done. But if your Payment Claims do not fully meet the requirements of CCA s 20, your efforts will be wasted.