Huo Raymond: Construction Contracts Amendment Bill — Second ReadingText is incorporated into the Bound VolumeHuo Raymond: Construction Contracts Amendment Bill — Second Reading[Sitting date: 20 March 2014. Volume:697;Page:16949. Text is incorporated into the Bound Volume.]RAYMOND HUO (Labour):I have slightly different statistics from Mr Young’s. The building and construction sector contributed around 5 percent of New Zealand’s GDP and employed about 7 to 8 percent of our workers. But that is covering the period between 2000 and 2008. I believe that this sector will certainly have contributed much more and employed many more now with the Christchurch rebuild and high demand arising from the housing shortage in Auckland and other areas. As I have said the building and construction sector is vital for New Zealand’s economic performance and our prosperity.The proposed amendments in the Construction Contracts Amendment Bill are very important. They are seeking to protect not only the head contractors but also subcontractors. The Commerce Committee asked for statistics on construction cases in the District Court and High Court. I understand that the Ministry of Justice does not collect such data nor does Statistics New Zealand. Like the situation concerning residential properties purchased by non - New Zealanders where no one is collecting such data this is another example where in New Zealand no Government organisations are collecting statistics in those areas. We are virtually flying blind and are in the dark.I am glad to learn that under the proposals in this bill specifically in clause 31 the new information-gathering powers will enable the Ministry of Business Innovation and Employment to gather data about construction cases in the courts. I thank the officials who made reference to a paper written by Tómas Kennedy-Grant QC. The paper reviewed cases on the primary legislation and summarised 177 court decisions. Of the summaries that referred to adjudication determinations it was found that in one case the court made a different decision to the adjudicator. In one case a determination was held to be invalid due to procedural problems and in four cases the adjudicator was found to have breached the rule of natural justice. The references and analyses are very important and valuable to ensure that we introduce meaningful changes that are working in the industry.The adjudication process is important. The construction sector places significant reliance on the adjudication process. Other dispute resolution mechanisms systems or measures available to the industry are either unsuitable or untenable due largely to the costs and time frames associated with the process. We have learnt from the submitters such as the Registered Master Builders Federation the Certified Builders Association and the Master Plumbers Gasfitters and Drainlayers (NZ) Inc. etc. that their members all place significant reliance on the adjudication process and for some professional organisations the adjudication process is commonly the sole way of resolving disputes in construction contracts.There are three further issues concerning the disputes resolution regime. The first two are in respect of the adjudication process. Firstly if the parties choose to use the adjudication process under the Act the adjudicator’s determination is binding on the parties but not directly enforceable. The Act requires the successful party to apply to the District Court if they wish to enforce the determination and the District Court decision on enforcements of a determination can be appealed to the High Court by either party. Basically the problems are that the decisions are binding but not directly enforceable. The avenues available to the parties are through appeals to the District Court or the High Court where appropriate.Secondly new regulations have been made prescribing qualifications for adjudicators. The common practice for parties is to request one of the authorised nominating authorities to select an adjudicator to determine their dispute. In order to provide clarity regulations are needed and I am glad to learn that other officials will work on the regulations after the passage of this bill.Thirdly the Act presently distinguishes between disputes about payment and disputes about contractual rights and remedies. That distinction can be helpful. The construction industry due to the nature of the profession needs a disputes resolution system that is speedy reasonable simple to use and cost-effective. I look forward to further debate on this bill. I commend this bill to the House.Bill read a second time.