PART 2 | RIGHTS TO PROGRESS PAYMENTS |
| Entitlement to progress payments |
| 5. Any person who has carried out any construction work, or supplied any goods or services, under a contract is entitled to a progress payment. |
| Amount of progress payment |
6. The amount of a progress payment to which a person is entitled under a contract is —| (a) | the amount calculated in accordance with the terms of the contract; or | | (b) | if the contract does not contain such provision, the amount calculated on the basis of the value of the construction work carried out, or of the goods or services supplied, by the person under the contract. |
|
| Valuation of construction work, goods and services |
7.—(1) Construction work carried out, or goods or services supplied, under a contract are to be valued —| (a) | in accordance with the terms of the contract; or | | (b) | if the contract does not contain such provision, having regard to the matters specified in subsection (2). |
(2) For the purpose of subsection (1)(b), construction work carried out, or goods or services supplied, under a contract are to be valued —| (a) | having regard to —| (i) | the contract price for the construction work, goods or services; | | (ii) | any other rate or price specified in the contract; and | | (iii) | any variation agreed to by the parties to the contract by which the contract price, or any other rate or price specified in the contract, is to be adjusted by a specific amount, |
| or, in the absence of the matters mentioned in sub‑paragraphs (i), (ii) and (iii), then having regard to the rates or prices prevailing in the building and construction industry at the time the construction work was carried out, or the goods or services were supplied; |
| | (b) | if any part of the construction work, goods or services is defective — having regard to the estimated cost of rectifying the defect; and | | (c) | in the case of materials or components that are to form part of any building, structure or works arising from the construction work — having regard to the basis that the only materials or components to be included in the valuation are those that have become or, on payment, will become the property of the party for whom the construction work is being carried out. |
|
|
8.—(1) Where a construction contract provides for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable on the earlier of the following dates:| (a) | the date as specified in or determined in accordance with the terms of the contract; | | (b) | the date immediately upon the expiry of 35 days after —| (i) | if the claimant is a taxable person under the Goods and Services Tax Act 1993 who has submitted to the respondent a tax invoice for the progress payment — the date the tax invoice is submitted to the respondent; or | | (ii) | in any other case — the date on which or the period within which the payment response is required to be provided under section 11(1) (whether or not a payment response is provided). |
|
(2) Where a construction contract does not provide for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable immediately upon the expiry of 14 days after —| (a) | if the claimant is a taxable person under the Goods and Services Tax Act 1993 who has submitted to the respondent a tax invoice for the progress payment — the date the tax invoice is submitted to the respondent; or | | (b) | in any other case — the date on which or the period within which the payment response is required to be provided under section 11(1) (whether or not a payment response is provided). |
|
(3) Where a supply contract provides for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable on the earlier of the following dates:| (a) | the date as specified in or determined in accordance with the terms of the contract; | | (b) | the date immediately upon the expiry of 60 days after the relevant payment claim is served under section 10. |
|
| (4) Where a supply contract does not provide for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable immediately upon the expiry of 30 days after the relevant payment claim is served under section 10. |
(5) The interest payable on the unpaid amount of a progress payment that has become due and payable is at the higher of the following rates:| (a) | the rate specified in or determined in accordance with the terms of the contract; | | (b) | the rate prescribed in respect of judgment debts under the Supreme Court of Judicature Act 1969. [47/2018] |
|
| (6) For the purpose of subsections (1) and (2) and subject to the Goods and Services Tax Act 1993, the claimant may submit the tax invoice mentioned in subsection (1)(b)(i) or (2)(a) at any time after the payment response mentioned in subsection (1)(b)(ii) or (2)(b) (as the case may be) is provided, despite anything to the contrary in the contract. |
|
| Effect of “pay when paid provisions” |
9.—(1) A pay when paid provision of a contract is unenforceable and has no effect in relation to any payment for construction work carried out or undertaken to be carried out, or for goods or services supplied or undertaken to be supplied, under the contract.(2) In this section —| “money owing”, in relation to a contract, means money owing for construction work carried out, or for goods or services supplied, under the contract; |
“pay when paid provision”, in relation to a contract, means a provision of the contract by whatever name called —| (a) | that makes the liability of one party (called in this definition the first party) to pay money owing to another party (called in this definition the second party) contingent or conditional on payment to the first party by a further party (called in this definition the third party) of the whole or any part of that money; | | (b) | that makes the due date for payment of money owing by the first party to the second party contingent or conditional on the date on which payment of the whole or any part of that money is made to the first party by the third party; | | (c) | that otherwise makes the liability to pay money owing, or the due date for payment of money owing, contingent or conditional on the operation of any other contract or agreement; or | | (d) | that is of such kind as may be prescribed. |
|
|
|
|
