David vs Goliath: 8 January 2024

THEME: Productivity

2023 was a year of COVID legacy issues for residential construction.

There are many facets to low productivity. I have experienced several of them.

We need to collectively improve. NZ is small — we are at our best when we share.

This example is a lack of contract knowledge coupled with appalling quality from a major supplier.

We should:

Not trust even the biggest supplier’s quality control systems (I have more examples from other suppliers too).

Inspect (just-in-time) products prior to leaving supplier’s site.

Don’t just repair it — hold supplier accountable for quality.

Record all discussions (email is enough).

Be very familiar with the Construction Contracts Act 2002 (CCA) .

Cost of this productivity impact was:

(1). $25,000 to a subcontractor.
(2). A two week delay in the build programme.

Other harm:

Tradie had to sell a family car to pay wages — family impact (the supplier still got a new boat).

What happened?

David trusted Goliath to deliver a major (just-in-time) product.

The quality was shocking — didn’t meet code nor the issued plans.

Supplier agreed (100% they said) but couldn’t send their remedial team to fix unless the project waited for three weeks.

Supplier directly engaged the builder to remediate by-passing their client. It was all written in an email including payment timeframe.

Builder did the work and invoiced as agreed ($25,000).

Supplier delayed response to a validly issued invoice (Construction Contract Act 2002).

The behaviour and lack of professionalism they showed the builder was a shock to me.

I stepped in to assist the builder (he is a hands on person not office based).

The supplier proceeded to ignore and frustrate the resolution process.

1. Could not read the written contract nor aware of the CCA.
2. Played games such as changing a payment schedule 90 minutes prior to payment deadline — frustrating resolution.
3. Tried to pay with account credits to the wrong company — frustrating resolution.
4. Their lawyers ignoring ‘sensitive requests’ (to avoid a cash flow crunch). Note: the lawyer apologized once the dispute made it to court and said; ‘sorry but I was on holiday’.
5. Accused two independent companies of being ‘inextricably intertwined’ due to a common public email domain — frustrating resolution.
6. Even their internal legal counsel appeared to not read contract emails.

The simplest route for resolution was the Disputes Tribunal as the value was tad under $30,000.

The full invoiced amount was awarded plus half of the builder’s associated debt collection costs.

DAVID WON. GOLIATH LOST.

A builder is a tradie not a litigator.

Resolved at Disputes Tribunal — treated like children.

WHAT A WASTE! Took eight months to pay.