24 November 2017

Building Contract: Maruti Investments v. Riteline Roofing

Building contracts allowing recovery of increased costs are unlikely to cover quoting errors the High Court ruled in a dispute over roofing costs for a Blockhouse Bay construction in Auckland.
Riteline Roofing Ltd sued customer Maruti Investments Ltd after finding a roof installation exceeded its original measurement by 73 square metres.  The two could not agree whether building plans used for measurement accurately represented the finished building.  There was also a dispute about alleged on the job discussions over final measurements and costs.  Riteline says a ‘cost increase’ clause in the contract allows it to recover extra in any event. 
Riteline took steps to force Maruti Investments into liquidation over its claimed extra costs.  The High Court blocked liquidation, saying there is a substantial dispute over the alleged debt.  Associate judge Doogue ruled a full court hearing is needed.  There is a factual dispute over accuracy of the plans.  A ‘cost increase’ clause enables contractors to pass on their suppliers’ increased costs; it does not fit easily with a mistake in quoting he said.        
Maruti Investments Ltd v. Riteline Roofing Ltd – High Court (24.11.17)

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