Landmark ruling backs builder’s claim

A Court of Appeal decision is being hailed as a landmark and the first to confirm the power of the new Construction Contracts Act.

The court upheld a High Court decision last year over an apartment development in Auckland.

Last November, Canam Construction won a $264,600 judgment against a property developer in a dispute about work on the apartments. The developer challenged this ruling in the Court of Appeal.

The George Trust owned 11 Cheshire St in Parnell, where George Developments contracted Canam to build two apartments in April 2003.

But the parties fell out and made claims under the Construction Act.

The Court of Appeal released a decision last week holding that in not obeying the law, George had to pay all of Canam's claims. Lawyer Graeme Christie, who represented Canam, said the decision was the first from the Appeal Court on the 2003 act.

"It's a landmark decision, confirming the significance of cashflow to the construction industry and ensuring the money gets paid to the builder," he said.

Geoff Bayley, a building dispute arbitrator, agreed: "This judgment again reinforces the principles behind the act to 'facilitate regular and timely payments'."