Reference no: EM132367123

Law for Construction Management Assignment -

PART 1: CCA

Parties

1. Rugby Heaven (RH) - Principal

2. Precarious Contracting Limited (PCL) - Contractor

Project - Rugby stadium - Penrose

Background - RH, a company with a notorious former All Black as a director, engaged PCL to build a large rugby stadium in Penrose to rival Eden Park. The stadium was to include the largest advertising screen in New Zealand. The parties entered into a construction contract on 1 June 2018 under NZS3910:2013 to carry out civil and construction works.

The project was priced at $15 million and was to take 24 months. The stadium and in particular the screen required specialist materials and labour.

Contract - The key clauses in the construction contract are as follows:

12.1 Payment Claims

The Contractor is to submit payment claims to the Owner on a monthly basis in respect of work carried out in the preceding month.

12.2 Payment Schedules

A payment schedule must be issued 5 working days after a payment claim is issued.

12.2.1. Payment

The Employer shall approve the Contractors payment claim (or issue a payment schedule) within 5 working days and the Employer shall then pay the Contractor on the 20th day of the month following the month in which the Contractor's correctly rendered invoice is received.

15.1 Service

Service of payment claims and payment schedules should be by email to the Applicable Email Address.

The project commenced as expected in January 2019. On 12 February 2019, PCL issued Payment Claim One for $1.11 million. PCL had forgotten to attach a schedule that included a full breakdown of the labour, supervision and materials for the month of January 2019. PCL re-sent its payment claim on 15 February 2019.

On 21 February 2019, RH issued a payment schedule. RH did not agree that the work done in January totalled $1.11 million. RH's lawyer, Grant, send a payment schedule to PCL.

The emails from PCL and RH are attached.

The Assignment (Part 1)

Consider the following questions with reference to the contract, the Construction Contracts Act 2002, and/or any case law.

Questions

1. Was the payment claim validly served (if at all)?

2. When was the payment schedule due to be served, and was it served in time?

3. Is Grant's email a valid payment schedule? Does it contain all the information required for it to be a valid payment schedule?

4. Is a scheduled amount of "nil" a valid payment schedule?

PART 2: EOT / VARIATIONS

Parties:

Shop Smarter (SS) - Principal

Esteem Developments Limited (EDL) - Contractor

Proficient Engineers Limited (PEL) - Engineer

Project: The construction of a shopping centre on the North Shore.

Over the past two years, former shoe designer Charlotte Smart had become heavily involved in charities which promote ethical clothing brands. In 2017, she formed Shop Smarter (SS), a charity which helps struggling ethical clothing brands gain traction. In June 2018, Ms Smart purchased some land in Takapuna with the intention of constructing a shopping mall including a food court and car park, where ethical clothing brands could have pop up stalls.

On 22 August 2018, SS entered into a construction contract with Esteem Developments Limited (EDL) in the form of NZS3910:2013 to carry out civil and construction works.

The build was to proceed in three stages:

• Stage 1: Construction of the main shopping centre to be completed by 21 November 2018.
• Stage 2: Construction of the food court to be completed by 8 January 2019; and
• Stage 3: Construction of the car park to be completed by 10 March 2019.

Construction of the three stages was expected to take 9 months and cost $7 million.

Contract - For the purpose of this assignment, you can assume that the clauses contained in NZS3910:2013 apply.

The issues

Issue 1

Construction was due to begin on 29 August 2018. However, the weather had been exceptionally bad throughout all of August and the site was a complete wash-out until 1 September 2018. SS could not grant site access until 1 September 2018.

The bad weather throughout August had other consequences including that EDL's previous job had run over time and it would not have the full number of workmen available to be on site until 5 September 2018.

(a) On 2 September 2018, EDL sent a letter to the Engineer claiming an extension of time of one week due to late site access and inability to secure workmen because of bad weather.

(b) Alternative scenario: EDL commenced work on 5 September 2018 and provided the Engineer with a revised programme of works on the same day. The revised programme of works extended the completion date for construction by one week. During a conversation with PEL, EDL explained that the extension of time was due to the delayed access to the site.

Issue 2

In February 2019, Ms Smart had become increasingly nervous. Some of the funding she thought she had secured for the project had fallen through and it looked like she would have to dip into her savings to complete all 3 construction stages.

Ms Smart decided that the carpark was an unnecessary addition and so she instructed PEL to issue a variation omitting these works. EDL complained to PEL that, because they had priced the contract on the basis of completing all three stages, they would now make no profit on the project.

On 3 March 2019, EDL found out that Ms Smart had re-tendered the work for the carpark and had awarded it to Risky Business Contractors (RBC) at a greatly reduced price.

The Assignment (Part 2)

Please answer the following questions:

Issue 1

5. Who bears the risk of bad weather under this construction contract? Please explain.

6. Explain the steps EDL should take if it wants to claim for an extension of time.

7. Assuming that EDL has taken all the required steps, is EDL entitled to an extension of time of one week:

a. For the notice of claim in the form of its letter?

b. For the notice of claim in the form of its revised programme of works and oral discussion with PEL?

Please explain.

8. Is EDL entitled to compensation for time-related costs? Please explain.

Issue 2

9. What are the requirements for ordering a variation?

10. What principles apply to the valuation of variations?

11. Is SS entitled to a variation omitting the carpark works? Please explain.

12. Was it valid for SS to re-tender the carpark and award it to RBC for a reduced price? Please explain.

Attachment:- Law Construction Management Assignment File.rar