Cunliffe David: Construction Contracts Amendment Bill — In CommitteeText is incorporated into the Bound VolumeCunliffe David: Construction Contracts Amendment Bill — In Committee[Sitting date: 22 September 2015. Volume:709;Page:6844. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn): In my last contribution I strayed into Part 2 of the bill and you Mr Chair quite rightly turned me back to Part 1. I am now going to address on a clause by clause basis several of the issues in Part 2 but recalling first the purpose of the bill which is of course to solve two problems: to make access to justice more evenly and readily available across the industry and secondly to avoid a cascade of risk down on to subbies which the Minister has very aptly described as a problem that has been rife in this industry for too long.What is really interesting when you go through the clause by clause analysis and the amendments that the Commerce Committee has very thoroughly addressed its mind to—and I will say it again. This is one of those bills where the hard slog has gone on in the back room and the public do not see I do not think the amount of cooperation that has occurred between the parties to get to where we have got to today. But it is intriguing the level of prescription that is now contained in the drafting which the committee if anything has added to on the basis of submissions and fair enough. This is clearly against the background of an industry where end runs occur shady things happen people get cheated and bad practice does occur. So the law has to be robust and provide remedies for that.One matter that the committee turned its mind to was the issue of so-called ambush claims—a claim is very quickly brought and the defendant does not have sufficient time to prepare a defence. So in new clause 13A the committee has recommended that the time frame for selecting an adjudicator be shifted—there is actually a typo in the committee’s report; the commentary—from 2 to 5 working days after the notice of adjudication has been served.Clare Curran: Well spotted.Hon DAVID CUNLIFFE: Thank you. Likewise in new clause 14A the committee has recommended adding a new clause to require the information in a notice of acceptance to be prescribed by regulation. As I say fair enough. The Minister of the day whoever that is should have the power to be very explicit about what information needs to be provided because by definition this law has to be robust to a conflict situation where the parties do not agree. If they cannot agree and they cannot even agree on what information they are entitled to have access to and needs to be provided to the adjudicator they will not be able to solve the problem. The adjudicator then cannot do his or her job. So we support the addition of that power. There are a number of sub-points under new clause 14A but I do not think we need to trouble the Committee with the sub-points.Let me flick back quickly to the start of Part 2 new clauses 8A 8B and 8C. It is quite interesting because the committee has both narrowed and widened the scope of the bill. It has narrowed the scope by excluding second-hand assets in property management contracts under certain circumstances but it has widened it in respect of the claimed amounts to include liquidated damages breaches of implied warranties and construction work already carried out. The committee has made it a little more flexible by allowing the parties to agree on single payments as well as part payments. The committee has then tightened new clause 9A to replace the word “indicate” with the word “state” in sections 20(2)(d) and 21(2)(c) thus requiring the amount of the claim to be specified exactly. The combined effect of those clauses is as I commented in relation to the regulation-making power to accept the fact that this is a conflict situation by definition to ensure that the law is clear about its boundaries and scope and within that scope to drive quite definitely and clearly to a solution which is what it is seeking to do with those amendments.Clause 15 had proposed mandatory pre-adjudication conferences. The rationale was to require the parties to go through a low-cost low-legality step in the process and escalate gradually. The committee reached the view after hearing submissions that that was likely in fact to add time cost and delay because it was a requirement not an option. So the committee has removed that requirement by amending the clause that had required pre-adjudication conferences—clause 15.In clause 16 the committee has recommended inserting a new subclause (2) that requires an adjudicator to allow a respondent additional time if the adjudicator believes the claim has been served with undue haste and the respondent has had insufficient time to prepare a response. That is a further measure against ambush claims and we think it is a reasonable step to take. The right of reply is strengthened in new clause 16A which is amended by the select committee. It allows claimants a right of reply in response to an adjudication response. Adjudicators are free to ignore those replies but they may raise new issues and material and it would be proper then for the adjudicator to address those matters.Coming towards the end of Part 2 in clause 18 there is an amendment recommended to require an adjudicator’s determination to be dated. It is a small thing in itself but I think it is another example of the Commerce Committee’s focus on bombproofing these rules so that people cannot do an end run around them. It is a shame when that has to be written into the law but we accept that that is the world we are in with a conflict situation that has led to these types of claims and it is an industry where those issues are shall we say not unknown.There is an amendment to clause 28(3) to remove the distinction between payment and other types of determinations—that is to ensure that an adjudicator’s determination is enforceable whether that is payment related or not. That has got to be a good thing. Finally the defendant may oppose entry as a judgment. That is to preserve the defendant’s right in relation to any subsequent District Court action and we think that is reasonable.Summing up it is clear that the select committee has turned its mind in some detail to the drafting of this part and thank you Mr Chairperson for allowing me the time to mention most but not all of the select committee’s amendments on a clause by clause basis. The select committee has also worked hard and the Government has worked with it to look at issues such as a trust or contract payments that get around the problem of the risk passing to subcontractors. We are supporting this bill because we think that with the Supplementary Order Papers on board we have got to a reasonable place.It will be instructive to see once this bill has been passed—as I am sure it soon will be by the Committee stage—how it beds in and from a Regulation Review Committee point of view we will be interested to see what regulations are promulgated by the Minister for Building and Housing under the bill. I wonder whether the Minister would take a short call perhaps just to provide a short outline to the Committee as to the regulation-making process that he envisages and the scope of those regulations under the relevant clause. I think that would help the Committee’s consideration because regulation-making powers are never to be taken lightly. They have to be prescribed in legislation and the conduct of that regulation making must occur within the scope and ambit of the empowering provisions. We are hopeful that it will be and we have no reason to think otherwise but I think it would assist the Committee if the Minister could give us a brief outline to that effect. Thank you.