Security of final account payments: the case of New Zealand

Paper


Choi, Daniel, Abeysekera, Vasantha and Ramachandra, Thanuja. 2010. "Security of final account payments: the case of New Zealand." Barrett, Peter, Amaratunga, Dilanthi, Haigh, Richard, Keraminiyage, Kaushal and Pathirage, Chaminda (ed.) CIB World Congress 2010: Building a Better World. Salford Quays, United Kingdom 10 - 13 May 2010 London, United Kingdom.
Paper/Presentation Title

Security of final account payments: the case of New Zealand

Presentation TypePaper
AuthorsChoi, Daniel (Author), Abeysekera, Vasantha (Author) and Ramachandra, Thanuja (Author)
EditorsBarrett, Peter, Amaratunga, Dilanthi, Haigh, Richard, Keraminiyage, Kaushal and Pathirage, Chaminda
Journal or Proceedings TitleProceedings of the 18th CIB World Building Congress
Number of Pages10
Year2010
Place of PublicationLondon, United Kingdom
ISBN9781905732913
Web Address (URL) of Paperhttp://cibworld.xs4all.nl/dl/publications/w055_pub341.pdf
Conference/EventCIB World Congress 2010: Building a Better World
Event Details
CIB World Congress 2010: Building a Better World
Event Date
10 to end of 13 May 2010
Event Location
Salford Quays, United Kingdom
Abstract

[Abstract]:
Little is known about final account disputes. In this exposure study, 20 cases out of a total of 57 have been studied in order to seek a first time understanding of the nature of final account payments, causes that hinder settlement, and to unearth possible improvement strategies. It is found that the number of court cases on final accounts have increased significantly since the introduction of the Construction Contracts Act (CCA) in 2003. These cases have been mainly with private clients with most judgements in favour of contractors and subcontractors. Whilst the monetary values of most disputes are not exceedingly high, the time delays are, suggesting the need to examine alternative dispute resolution methods currently not available through standard form contracts such as conciliation. Workmanship issues and cross claims feature more frequently as the main reasons for disputes. Issues connected with a lack of understanding of CCA also featured prominently. In an attempt to understand the root causes, initial investigations revealed the presence of generic causes such as ‘contractual incompetence’ and ‘opportunistic behaviour’ which seems to substantially hinder the resolution of these disputes not least ‘technical incompetence’ and ‘managerial incompetence’. It is expected that understanding the relevance of such generic categories coupled with broad trends on court decisions including reasons hindering early settlement would help ease problems connected with final accounts. Industry initiatives through client and contractors’ federations may be useful too. Further studies are necessary to gain a greater understanding of the issues impacting on final accounts in order to minimise the incidence of final account problems in courts.

Keywordscommercial settlement; final accounts; payment disputes; security of payment
ANZSRC Field of Research 2020480506. Litigation, adjudication and dispute resolution
350208. Investment and risk management
330202. Building construction management and project planning
Public Notes

Copyright held by publisher: 'All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system without permission in writing from the publishers.
CIB Publication 341.
W055 Special Track Papers (excluding Postgraduate Papers) reviewed by: Gerard Devalence and Prof. Jorge Lopes.

Byline AffiliationsAuckland University of Technology, New Zealand
Institution of OriginUniversity of Southern Queensland
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