A Journey of Growth: Matt Foxall’s Path to Senior Quantity Surveyor

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After exploring Europe in 2018, Matt Foxall directed his career path towards White Associates (WA), inspired by positive reviews from a friend who had previously worked alongside the company. With a Bachelor of Construction majoring in Quantity Surveying from Massey University, coupled with his lasting fascination with cost analysis and his passion for understanding pricing dynamics, he propelled himself into roles focused on post-contracting and estimating within the construction industry.

“Growing up, I was always fascinated with how much things cost and why they cost as much as they did. Getting a better understanding of that now!”

Matt appreciates the variety offered in the role; however, no journey is complete without a few memorable detours. He recalls his unforgettable first week at WA that included a visit to the Christchurch Men’s Prison, “to get to site you had to go into a live prison environment and walk a kilometer or two to the site. And I remember thinking ‘what have I got myself into…?’”. Despite the initial shock, Matt persevered, demonstrating steady growth and dedication to his work.

Recognising Matt’s hard work and contributions, WA recently promoted him to Senior Quantity Surveyor. In this new role, he has embraced more responsibility and leadership while continuing to excel in his field.

With experience spanning both the Contractor and PQS side, Matt has primarily focused on post-contract areas with a sideline in estimating. He now sets his sights on refining his skills in estimating, recognising its pivotal role in his profession. “Now I want to put the majority of my focus and time into estimating to ‘hone’ in on those skills as I think it is an important part of being a quantity surveyor.”

Matt credits much of his career progression to the supportive environment at WAs. “Definitely the biggest attribute to my career development is the support that I get from managers and colleagues. They’ve always got time for me when I come over to their desk or give them a call – even when it feels like a silly question.” This ethos of support and collaboration is integral to the culture at WA, fostering an environment where growth and development thrive.

Matt finds fulfillment in the diverse range of projects he has been a part of. “From my time here, I’ve worked on prisons, high end houses, golf courses, townhouse complexes, data centers and seismic upgrades to name a few”, highlighting the variety that keeps his work engaging and rewarding.

Beyond his successful career as a quantity surveyor, Matt finds passion in activities such as golf, guitar, snowboarding, football, and tennis. He has also achieved success outside of work, as his claim to fame was recording songs at York Street Studios with his mates following a competition win.

Matts’ journey exemplifies not only professional growth but also a commitment to pursuing passions both within and outside the workplace, making him a valued member of the White Associates team.

Stepping into Quantity Surveying: How A Cadetship With White Associates Led to Industry Awards

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Connor’s story

Looking back, I could never have imagined I’d end up winning two awards for my research and work, after graduating from Massey University with a Bachelor of Construction. High school wasn’t really for me – I liked math, but not the academic side. After leaving school and working in what I’ll call bridge jobs trying to find a good fit, I worked as a Technical Coordinator for the Auckland Council where I spent most of my time reading plans. I’d always enjoyed construction, and was interested in the construction industry as a whole, so when Covid hit I decided to combine my interests and start studying at Massey University.

Studying during Covid was challenging, especially because it meant you didn’t get to interact with people as usual. The last year was a highlight though, with part of the degree involving real life experience working as a quantity surveyor through a cadetship. I knew of someone in my class who had done their cadetship with White Associates, so I sent them my CV to try my luck. I had an interview and then two weeks later, I started a cadetship with the company.

The role as QS

Starting at White Associates was a bit of a whirlwind, but support from the team meant the transition to a working environment was very smooth. I’ve also greatly appreciated the encouragement and trust when it comes to my work from Richard Moore-Savage, an Associate who also studied at Massey University. His constructive feedback has given me a sense of autonomy, along with learning and developing my skills.

The range of work at our consultancy is fantastic, and since starting I’ve been involved with a range of residential developments and commercial projects.

Because I want to be a cost planner and estimator, it’s been great to have experience in expansions and renovations, as well as new builds. The opportunity to take an estimate from start to finish, as well as working on a wide scope of projects, have definitely been the highlights of my work.

Picking up awards

Winning two awards for my studies was a next-level bonus. It was pretty exciting to have an award presented by the New Zealand Green Building Council for my research. I was selected for this award for the best research around delivering 2030 carbon zero targets, and won a course through the Council. I was also presented with an award by Naylor Love for excellence as a member of the team involved in a BTR project at Sylvia Park.

Having the recognition of peers and mentors in the industry for my hard work as a QS has really been rewarding. I was acknowledged for my teamwork on a project too, because working together and communicating as a team is incredibly important in terms of delivering work on time.

White Associates really cultivate a relaxed and friendly culture where engaging with members of the team becomes second nature. You can sit at the lunch table and talk about anything, even if people are from different teams.

A word from the Managing Director – Konrad Trankels

Connor came to us as a cadet, and immediately fitted right in. He suited the business well in terms of how he worked, his financial understanding and managing his workload. Even though he is new to the industry, he can really contribute to projects because he has great self-learning skills. That’s possibly something that has come from studying during Covid.

Finding someone that both works autonomously, and collaborates well, is rare, especially considering Connor’s age. He is a great string to our bow, as a company taking a fresh approach to construction cost consulting.

The awards Connor’s won are fantastic accolades and are representative of what he’s capable of, and where he’s going in the industry. I’ve sat near Connor when I was in the office and seen how well he collaborates by listening and taking on board important information. His ethics are aligned with the business, and he puts these ethics into his work to provide our clients with the relevant, hard facts related to their projects. He is on the upward trajectory in quantity surveying and the world of business.

Redefining our values to power our future

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From White Associates’ very beginning in 2005, our business has been built on a values-based platform. In fact, we established our firm partly to chart a new course from doing things ‘the old way’, which our founders Konrad and Graham saw as ineffective. They were determined to do what they thought was right, more than what was just the norm.

This has been the litmus test for everything that has followed over the next nearly 19 years, as White Associates has grown in sustainable and structured ways while staying true to what matters.

Turning 18 was a big moment for us all at White Associates. As part of our 18th birthday celebrations towards the end of last year, it made sense for us to take time to revisit our values to ensure that they continue to drive us forwards; helping us to operate and deliver systematically in ways that our clients value – and that matter to us.

Amid long discussions, we kept circling back to three core values that are at the heart of what we do, how we do it, and what motivates us. These authentic values, which are already being lived by our team, comprise:

COLLABORATION

To us, collaboration is all about sharing knowledge with each other and our clients to achieve project success together. “Collaboration involves working together to ensure better outcomes through reflection and continuous improvement,” says Justin Maritz, “as well as two-way leadership and 360′ feedback. By seeking perspectives from different departments, roles, companies, and projects, we involve and apply specialist skills collaborating to achieve the best results.”

Justin adds that collaboration is already alive and well within our business. “Not only is it in our departmental and team meetings across the disciplines we practice, but also in our team-wide workshops and how we share information across departments. Mentoring partnerships and cadet Q&A sessions also share knowledge, as do the thought leadership articles, we find, create, and share on social media and internally.”

CONNECTION

This intensely human value is something that really emerged during the Covid years, when we realised how important – and powerful – connection is to each of us as people and in our work to be an effective team. Since then, says Darin Bayer, “understanding the power of connections has enabled our people to embrace flexibility and build strength in our diverse workplace.

“Our culture of autonomy entrusts all team members to enjoy responsibility and take ownership of their work, knowing development and support is available.

“Making this value of connection prominent helps us to support our people in building diverse and long-lasting relationships, as well as empowering strong and trusting work-related connections – in the office and in our industry.”

This value is brought to life within White Associates through opportunities to work across different departments, by being exposed to a variety of projects and clients, as well as at client networking events, which are open to all. We also encourage people to feel accepted, connected and included at work through our Coffee Club, creating lunchtime dining together, and by holding in-house yoga sessions, Friday drinks, and office competitions.

COMMITMENT

“To us commitment is about always putting people first: our team, our clients and our partners,” says Brett Zeiler. “It is about having and showing confidence in our people – their specialist training, team collaboration and support, positivity, communication, and dedication.

“This has the positive flow-on effect of maintaining integrity and following professional, moral ethical standards, and in giving our clients assurance in the quality of our service.

“Our diligent processes and continuous improvement enable us to uphold our good reputation through meeting expectations – of ourselves, our clients, and our project partnerships. It is through our belief and commitment that we continue growing from strength to strength.”

Brett adds that examples of commitment in action start for our people by being available, punctual, and professional. “It is then also about doing what is best for each project, tailoring solutions rather than what is easiest, and always being flexible and responsive to client needs. Then, by investing in relationships and connections we can go beyond expectations, providing solutions outside of scope to help clients navigate their way and succeed.”

Collaboration, connection, commitment. Redefined values that are the best ways of working to keep doing what is right – for our people and our clients, so we all build stronger futures together.

White Associates hits the ground running with 3 new people

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2024 has got off to a fast start at White Associates. It is exciting for us to announce the appointment of three new people into the business, all of whom are active and underway in their roles, underlining that our business continues to go from strength to strength as we track into 2024.

Doreen Chua, Senior Quantity Surveyor

A Senior Quantity Surveyor working in our Post-Contract team, Doreen joined White Associates in January to develop her successful track record in estimation and completing projects on time and with quality.

Applying a powerful combination of contractor-side experience and outstanding organisation and planning skills that she has gained in her 17-year QS career in New Zealand and Malaysia, Doreen’s experience across a wide range of sectors includes cost estimating, tendering, contract procurement and post-contract cost management across consultant and main contractor firms.

Multi-lingual across English, Malay and Mandarin, Doreen applies skills across the quantity surveying spectrum on projects as varied as those for government departments, the development of major multi-unit apartment blocks, school campus developments, local authority land upgrades, medical centres and retirement villages.

“I’m enjoying collaborating closely with project managers, architects, engineers, and subcontractors to ensure efficient communication and seamless project delivery,” says Doreen.

Liam Crane, Project Finance Analyst and Finance Consultant

Liam has long been known to White Associates through his previous role as a Contract Manager at the Department of Corrections, where he played a leading role in delivering the Modular Build Programme.

Joining our Bank Funding team at the outset, Liam is involved in examining precondition reports and drawdowns across numerous projects, also undertaking peer review quality assurance. Applying his attention to detail and analytical skills alongside his considerable abilities across contract management, financial modelling and negotiation, Liam also undertakes discovery for litigation.

In doing so, he also applies expertise he has gained over many years in contract analysis and management across major infrastructure projects, which have required working at pace and with the agility to refocus and reprioritise workloads as deliverables and timeframes change.

Moving out into White Associates from his Corrections role is a good step, he says. “I am keen to try the private sector, and the opportunity to grow my construction skills at White Associates was too good to pass up. I’m now working in bank funding, looking at precondition reports and drawdowns, helping out with projects, also doing some peer review QA. The intention is for me to branch out further into our Advisory business, using my skills in contract management and litigation / negotiation: great opportunities for me to explore new areas and gain knowledge.”

Sarah Turner, Business Manager

A highly organised business manager whose successful career to date has been based on attention to detail and communication, Sarah manages a range of core business activities across White Associates.

Coming to White Associates from managing the nationwide BNI business network, Sarah brings a community feel to the firm, driving our performance through building our team, helping our specialists to build their leadership skills alongside their technical skills and developing our workplace as a place where people want to come.

In doing so, Sarah actively contributes to the strategic planning of the organisation, aligning efforts with overarching goals and objectives.

Sarah says she found the role on LinkedIn. “The variety of the role drew me, as well as the experience in a more traditional business structure after working in franchise networks. In this very people and operations role there are many different parts to it, and all are ticking boxes for me. What I want to bring to White Associates is that we work ever-more strongly as a team – a business family at work, going from strength to strength – helping our skillful specialists to build softer skills alongside their technical expertise.”

Konrad Trankels, Managing Director of White Associates, says that White Associates has come a long way since we opened our doors on 1 April 2005. “Today, we continue to go from strength to strength, and these three new appointments demonstrate the quality of people we are now able to attract as we strengthen our team in a period of managed growth backed by systems and structure. We are active throughout New Zealand, delivering great outcomes for our clients and doing so when relying on our values, which have always been about delivering in the right way for people.”

Weng Tan White Associates

Older and Wiser: Weng Tan Reflects on Ten Years at White Associates

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Weng’s love of collaboration means he is always learning something new.

“How many decades do you have in your life? Use it wisely.” 

 

That’s the advice that Weng Tan would give to himself back in December 2013, when he first landed in New Zealand for his new job at White Associates. He has used this decade well, developing from a Quantity Surveyor in 2013 to a Senior Quantity Surveyor and last year to Associate level in our Post Contract team. 

 

Weng has seen the Construction market change significantly over the last ten years. “The market has changed from a very manageable workload to a very high demand workload, and I have loved seeing organisations like MATES in Construction created to look after those in these high-pressure environments. Everyone wants a very quick turnaround. Pricing is getting more competitive; you can see this in the shortage of materials during and post-Covid. Materials aren’t an issue anymore, but the next challenge ahead is how to service high levels of construction activity with a small pool of local talent.” 

 

The demographics of Construction workers have also changed. “There are now a diverse mix of nationalities in the New Zealand Construction industry,” says Weng. “This affects the way that people work and run Construction businesses, as there will be different expectations. For example, different countries move at different speeds and foreign clients may expect shorter timeframes.” 

 

“I’m also glad to see the number of women in construction increasing. Construction is no longer such a male dominated industry. I have noticed that NAWIC [National Association of Women in Construction] are growing quickly, they now have more activities and are quite active on social media. When I joined White Associates, we only had two or three ladies in our team, and now half our staff are women. That is very impressive.” 

 

As part of our Post Contract team, Weng has been exposed to many different industries. “Each project has different challenges, uses different construction methodologies, has different project teams and project expectations,” Weng says. 

 

“There are a few projects I’m especially proud of: The Douglas Pharmaceuticals Innovation Centre, Woolworths’ Palmerston North Distribution Centre, a project in Mount Eden, Ryburn Road Townhouses, and Nugent Street Apartments. The common thread in these projects is that they were collaborative. I’ve learnt that the recipe to project success is a combination of teamwork, effort and knowledge.” 

 

Director Brett Zeiler works closely with Weng on Post Contract projects and has seen his impact firsthand. “My first job at White Associates was the Mount Eden project. I saw how effortlessly Weng slotted into the project team and how efficiently he ran the project. He has made a great reputation for himself within the industry; our repeat clients often ask for him to be assigned to their projects,” Brett says. 

 

What Weng enjoys most about working at White Associates is the people. “I love the collaboration and teamwork, everyone helps each other,” says Weng. “I share my workload with the other Post Contract Associates, and the Directors are always available to assist. There’s been times where I’ve lost my direction in a project, and [Directors] Justin and Brett gave me the advice and support I needed to reset and carry on. 

 

“Most of the time we think that people that are older are wiser. That’s true, but we learn a lot from young people too. The world is continuously evolving, and technology is always improving. When I first arrived at White Associates I brought my own scaler, it’s now sitting at the back of my drawer. Our Juniors are skilled in CostX, they can look for files quicker and navigate our online systems easier. Do not stop learning and treat every day as a new day.”  

 

The next ten years will bring new adventures for Weng. “I would like to enhance my skills and broaden my horizons,” he says. “In order to step out of my comfort zone and explore different things, I have made the hard decision to leave White Associates in the new year. However, that doesn’t mean my relationship with the company will end. I look forward to improving myself in new ways within the Construction industry.” 

 

White Associates congratulates Weng on his decade of service. “On behalf of all the directors and the whole team, we want to say a massive thank you to Weng for all his hard work,” says Brett. “It’s been a privilege to have worked alongside and learned from him over the last ten years.” 

 

This article was contributed by Gemma Christall, Weng Tan and Brett Zeiler. 

Douglas Innovation Centre

Under the Microscope: An Advanced Future for Douglas Pharmaceuticals

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The new Douglas Innovation Centre adds significant research and development capacity to Douglas Pharmaceuticals.

If you’re looking for evidence of New Zealand as a hub for advanced technology, you need to look no further than the $50 million Douglas Innovation Centre in West Auckland, a state-of-the-art pharmaceutical research and development (R&D) facility created by Douglas Pharmaceuticals. The facility is the largest of its kind in New Zealand, and sits castle-like at the top of a hill in Henderson. 

 

Opened in September 2022 after an 18-month construction period, the Douglas Innovation Centre uses world-class research to find solutions for a range of serious illnesses. The three-storey, 4,500m2 facility includes multiple laboratories, purpose-built rooms for commercial manufacturing, pilot scale product development suites, open office space, cafeteria, meeting facilities and a GMP warehouse. In recognition of its innovative design, which includes a skybridge connection to Douglas Pharmaceuticals’ existing head office, the Douglas Innovation Centre was recently awarded an Excellence Industrial Property Award at the 2023 PCNZ Property Industry Awards. 

 

White Associates was involved in the creation of the new facility, utilising a senior team comprising of Directors Justin Maritz and Brett Zeiler, and Associates Weng Tan, Elliot Smith and Richard Moore-Savage. The White Associates team provided a full range of Quantity Surveying services from Pre Contract feasibility estimates through to Procurement/Tender cost analysis and Post Contract cost management.  

 

Weng Tan says that what really stands out about the project is its complex and evolving nature. “The Douglas Innovation Centre was a significant extension of Douglas Pharmaceuticals’ existing warehouse, laboratory and office facilities, and laboratory facilities are technically sophisticated and mechanically intensive structures. Hermetic doors and windows were required for its multiple clean spaces, and the pressurisation of rooms required careful attention to detail to ensure no surfaces presented a hygiene risk.  It also required various types of reticulated gases, compressed air and vacuums throughout. The surrounding buildings remained fully occupied and operational throughout construction, which created logistical challenges included limited access to the laboratory building.”

 

The goals for the end-user experience evolved throughout the project, and the design had to adapt quickly so the Contractor could complete upgrades while they were still on site. “From a cost consultancy perspective, in addition to the routine construction cost control and monitoring we worked closely with the client’s accounting team. We ensured the payments were facilitated correctly and accordingly from the designated accounts,” says Weng. 

 

“Reliable, consistent communication was crucial in this project. Our job was to be clear and transparent about cost throughout the process. We added value by working closely with Douglas Pharmaceuticals, the Contractor, Project Management and consulting teams to provide quick, sound advice on costs. This in turn enabled Douglas to make informed decisions to ensure continuity of works for the contractor whilst working toward project budgets. We also kept close to the Mechanical and Electrical (M&E) Engineer and Contractor throughout the project to understand all changes as they arose, making forecasts and notifying the design team and client.”

 

Despite additional scope being added to the project, it achieved completion on time. “We were able to progress swiftly and close the final account with no dispute,” Weng says. “The client is extremely happy with the overall outcome and the level of quality achieved.” 

 

This article was contributed by Weng Tan and Gemma Christall.

White Associates Directors

Graham White to retire as White Associates goes from strength to strength

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Graham will retire at the end of November, leaving behind a strong management team and a company that continues to grow.

No one would ever describe Graham White as a shy and retiring sort of person. However, it is nonetheless true that after a long and highly successful career he is retiring from White Associates, the company he co-founded with Konrad Trankels back in April 2005.

 

Planned over the past three years, Graham’s retirement at the end of November comes at a time when White Associates celebrates its 18th birthday and looks ahead with confidence, in a time of growth. The business is led by Konrad with exceptional directors in place – Justin Maritz, Darin Bayer and Brett Zeiler – plus a new Associate Director and a strong roster of Associates in the team for a year now. There is longevity within the leadership team, with Director Justin Maritz and Associate Weng Tan celebrating their 10-year work anniversaries this year. 

 

Structured and strong, White Associates has expanded successfully into the South Island from its Auckland base, establishing a flourishing office in Queenstown led by Elliott Smith which is now in its fourth year. White Associates’ service offerings now span four thriving departments: Pre Contract, Post Contract, Funding Representation and Advisory Services. 

 

The track towards this level of success was laid in the very first days of the firm, when the immediate priority was to win work in the right way, says Graham. “Konrad and I always said from Day 1 ‘we’re not going to do it the old way’. We determined to do what we thought was right, and this has always been the litmus test for everything that has followed. 

 

“We have grown over the years thanks to meeting great people along the way: brilliant clients and people who have worked in our team. The relationships and teams we have forged along the way, as well as the projects we have been fortunate enough to work on, have been the defining feature of my working life, and I will never forget them.” 

 

Graham adds that over the years he has realised that White Associates is great at doing its job, and that it doesn’t need to go beyond that. “We have learned to focus on what we are great at, so we have spent considerable time and resource in creating processes and people in place to be truly effective as a QS firm. White Associates has improved hugely over recent years, growing in a sustainable and structured way while reclaiming its core value of ‘doing it right’. Truly we’re going from strength to strength.” 

 

Appointed an NZIQS Life Member in December 2019, Graham says that as White Associates reaches its 18th birthday now is the right time to go. “This is my baby; it is a big thing for me to leave, but it is the right time, something we have planned for the last three years. I’m ready to move on to the next chapter of my life, and it is good for the directors to grow as a team. It is good for the company as well: a refresh, time to grow with our leaders in place. 

 

“I am leaving White Associates in brilliant shape. Konrad has been running the company for years, and I am truly in awe of our team. The structure is in place for White Associates to succeed into the future, with our technical teams focusing on getting the job done in the best way for our clients and our staff, and Konrad at the helm ensuring all facets are aligned to the White Associates’ vision.” 

 

That said, he also says that he plans to keep in touch for years to come. “I will continue to meet regularly with Konrad to be a sounding board, to help him and hear what’s going on. I want to hear great things about White Associates when I bump into people. I know I will.” 

 

We know that Graham has formed many great relationships and made many friends along the way. If you have any messages you’d like to send him, please click HERE:  

Retentions Money Regime White Associates

A Practical Guide to the new CCA Retentions Regime – how will it affect me?

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In this article we highlight the implications for Financiers, Principals, Developers, Contractors and Subcontractors.

The Construction Contracts (Retentions Money) Amendment Act 2023 (“CCA”) comes into force next week on 5 October 2023, and with it, a myriad of changes affecting the way in which retentions should be held and managed on commercial construction contracts [1].  It will apply to contracts entered into after this date, and contracts entered into before this date and renewed thereafter.

This is the second article in our series in which we shed light on the new regulations and how they impact you.  Whether you are a Principal, Contractor, Subcontractor, Developer or Financier; whether you hold retentions, or retentions are withheld from you; this guide aims to highlight the most important changes to the Act, and practical steps you can take to help you meet your obligations and avoid the pitfalls of the revised CCA regime.

 

Parties A and Parties B – which one am I?

The rule of thumb is that Party A holds retentions and Party B has retentions withheld from them.

Therefore, if you are a main contractor, you will be both Party B – in respect of the head construction contact, and Party A in respect of any sub-contract retentions.

 

If you are a:

  • Principal
  • Developer
  • Head Contractor (holding retentions for a Subcontractor)

You are Party A.

What are my rights?

  • To withhold a portion of money from Party B in each progress payment claim (assuming this is permitted by the specific contract) [2].

 

  • To utilise retention monies to rectify defects and/or non-performance by Party B – if necessary and once the necessary preconditions have been met.

 

  • To keep any interest earned on retention monies.

 

[2] However, the retention regime will apply even where money is withheld as security for the performance of contractual obligations, even where the contract does not allow retention money to be withheld.  A Principal’s deduction, or funds held by a 3rd party in escrow, are both considered retention monies.

What are my obligations?

You must:

  • Keep retention monies separate.
    • They are held on trust and cannot be mixed with any other funds. However, you can hold retentions from multiple different projects and parties in the same account [3].

 

  • Report on retention monies regularly.
    • A retention report must be provided to Party B after every retention money transaction, every 3 months minimum thereafter, and upon reasonable request [4].
    • The report must include:
      • The bank name, branch, account name and number.
      • The total amount of retentions held on behalf of that Party B.
      • The contract(s) to which the retentions relate.
      • Date(s) and time(s) of any transactions.
      • A statement that Party B may inspect the retention accounts and records.

 

  • Release retention monies – this should occur once Party B has completed its contractual obligations. The due date for the payment of retentions cannot be later than date of completion of contract obligations.

 

  • Use retention monies – to remedy defects as long as:
    • Use of the retentions for that purpose is permitted under the contract.
    • The relevant contractual provisions are complied with.
    • At least 10 working days’ notice is given to Party B of its non-performance and Party A’s intention to use retentions, prior to using the retentions.

 

[3] A trust is automatically formed as soon as monies are withheld.  The retentions are trust property.  Party A is the trustee, and Party B is the beneficiary.

[4] Full and complete accounts / records must be kept, the cost of which is not recoverable by Party A.

How can I best comply?

  • Educate directors and staff – to ensure everyone understands the roles and responsibilities, from directors to administrators.

 

  • Ensure that effective internal accounting policies and procedures are in place – directors have a legal duty to ensure their companies are abiding by the retention money regime.

 

  • Open a dedicated “Retentions” bank account – for the sole purpose of holding retentions.

 

  • Develop a naming protocol – A simple coding system will ensure you can quickly and easily identify each project, retention type value and entity, and report on it to the relevant Party B.

 

  • Update your monthly payment schedule / certificate template – This will simplify the reporting process by including retention money reporting in a standardised format.

 

  • Contractual – Ensure that contractual provisions including relevant notice requirements are adhered to. Terms making payment of retentions, or due date for payment, conditional on anything but Party B’s performance of its contract obligations are ‘prohibited provisions’.

Key Takeaways for Party A

  • Retention monies are held on trust – It is not your money, and you must not mix it with money in your own accounts and/or use it in any way.

 

  • Retentions monies must not be used as working capital.

 

  • In the event of receivership or liquidation – the receiver or liquidator will step into your shoes, automatically becoming Party A and the new trustee of the retention monies.

 

  • Non-compliance is expensive – The new Act outlines significant penalties including fines between $50,000 – $200,000 which can be enforced against both your company and individual directors.

 

  • Demonstrating compliance may become a condition of funding (banks and financiers)

 

  • Ensure that the contract entered into contains adequate procedures and criteria for dealing with retentions. Also note – a contract must not contain provisions which attempt to avoid the retention money regime.

If you are a:

  • Head Contractor (having retentions held from you by a Principal or Developer)
  • Subcontractor

You are Party B.

What are my rights?

As Party B you are entitled to:

  • Receive regular reporting – in respect of all retention monies held by Party A on trust for you. Reporting must be in the correct format and contain all the information specified under the Act – at least once every three months and until Party A’s obligations as trustee of the retention money trust have ended. [as per Party A description above]

 

  • Make reasonable requests to inspect – Party A is obliged to show you the account(s) and records pertaining to your retention monies. [note reluctance due to commercial factors, however, this is your right]

 

  • At least 10 working days’ written notice – before Party A uses retention monies to rectify any non-performance or defect.

 

  • Be paid out retention monies – once all your contractual obligations have been completed and any other pre-conditions for release have been met. Interest is payable on late release of retentions.

 

  • Report non-compliance – The Act is administered by the Chief Executive of the Ministry of Business, Innovation and Employment (MBIE). You can raise any concerns about Party A’s compliance (or lack thereof) by emailing CCRMComplaints@mbie.govt.nz .

What are my obligations?

  • To promptly rectify any defects and non-performance in the contract works.

 

  • Monitor retention holder’s compliance with the CCA and report any breaches thereof.

Key Takeaways for Party B

  • Retentions owed but unpaid retain the status of “retention monies”. Your retentions are now protected in the event of Party A’s receivership or liquidation.  Bear in mind, this form of security associated with retentions, applies even under circumstances where amounts have been certified as debt due but not yet paid.

 

  • Ensure that the contract entered into contains adequate procedures and criteria for dealing with retentions [5].

 

[5] Section 18I – CCA (Retention Money) Act states that provisions in a contract which purport to change the conditions on which retentions are released, and/or avoid the application of this section shall be void.

If you are a Financier:

What should I consider implementing?

  • Make CCA compliance a condition of funding – statutory compliance, in all respects.

 

  • Ensure borrowers’ construction contracts contain appropriate retention provisions.

 

  • Make regular reasonable requests for documentation demonstrating compliance – ideally on a monthly basis, and in any event prior to any draw down of funds. Financiers should verify compliance in relation to the retentions borrowers hold for contractors as well as the retentions contractors are holding for their subcontractors.

 

  • Ensure that retention funds are not considered assets or equity and/or used as security for funding.

What are my obligations?

  • Not to include retention funds in my assessment of my client’s financial position.

 

  • Report non-compliance of retention holders.

Key Takeaways for Financiers

  • Compliance with the CCA can be a condition of funding; however, financiers need to take care not to be construed as a “constructive trustee” and consequently become responsible for management or compliance with the retention monies regime. In order to avoid this situation, borrowers should draw down retention amounts progressively and not leave it to be drawn down as a lump sum when retentions are due to be paid to the contractor.

Next month we will discuss the alternative mechanisms – known as Complying Instruments – available to manage risk and performance under commercial construction contracts.

 

Further Guidance

If you require further guidance, please feel free to contact our Advisory division leads.

 

Further Resources

 

For the relevant legislation:

 

[1] This guidance does not apply to a construction contract with a residential occupier.

 

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.  It is current as at the date of publication only. 

 

This article was contributed by Rebecca Ward and Jesse Conradie.

Rebecca Ward Senior Advisory Consultant White Associates

Introducing Rebecca Ward, our new Senior Advisory Consultant

Posted by white associates on

Rebecca brings a practical, big-picture approach to the White Associates team.

We are delighted to welcome Senior Consultant Rebecca Ward to our Advisory Division. 

 

Rebecca’s varied background in related industry roles means she has a deep understanding of how different construction stakeholders interact with each other, and what their needs are. After being admitted to the bar as a qualified lawyer, Rebecca soon began applying her legal knowledge in practical property environments including a developer, a building surveying company, and a multi-disciplinary company where she interacted with a full suite of property consultants. “Over time, I began to specialise in contract administration, supporting the project lifecycle and all the associated specialty consultants,” she says.

 

Rebecca’s ability to consider the big picture comes in handy when working on complex projects. “I like to step back from a project and take the time to understand it in its entirety, not just the portion that I’m involved in. I find this gives me a big advantage when it comes to advising on bespoke solutions and considering the best project outcomes for all. I ask a lot of questions and have learnt not to assume anything!”

 

Director Justin Maritz, who leads our Advisory Division alongside Associate Director Jesse Conradie, says Rebecca has already made a noticeable impact on projects.

“With her wealth of construction and legal expertise, Rebecca has instantly added value. Rebecca’s specialist skill set enables her to bring a different perspective to our Advisory team. As a collective, we can examine projects from a variety of angles and advise outcomes that are beneficial to all parties.”

 

In Rebecca’s view, the key to achieving these beneficial outcomes is communication. “If all stakeholders can ‘buy in’ to the project and have realistic expectations, particularly in areas such as risk allocation, then disputes can be avoided,” she says. “I enjoy helping people understand that a shared risk matrix is much more powerful than an unbalanced one. When things go wrong, everyone pays the price to a small degree but there is a shared desire to work together to find a solution – which is not always the case on projects with unbalanced risk allocation. It’s important to remember that all stakeholders have the same end goal: to deliver a successful project.”

 

If you require advice for your project, get in touch with our Advisory Division today.

 

This article was contributed by Rebecca Ward and Gemma Christall.