Introduction

There is a worrying trend in the construction industry: contractor insolvencies are on the rise.

According to a release from The Insolvency Service, the construction industry accounted for 3,213 insolvency cases in the 12 months leading up to April 2022. This equates to almost a fifth (19%) of the overall cases of insolvency and, more worryingly, these numbers are still growing. These insolvencies have occurred throughout the market but have particularly affected smaller and mid-tier contractors.

In Re Nicolas Critini Pty Ltd (in Liquidation) [2022] NSWSC 1149, the New South Wales Supreme Court confirmed that a statutory debt for a disputed progress claim does not crystalise under SOPA’s^[1] distinct 'pay now, argue later' process until an adjudication determination is delivered.

Regulation is not having the desired effect in reducing insolvency in the construction industry

This is not a ‘shock and awe’ article. I did not design it to scare readers into believing that the industry is about to see a lot of damaging contractor collapses.

Careful contract negotiation can limit the potential damage from insolvency in a construction firm’s supply chain.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of November 14, 2022.

“Controlling the controllables” should be the main focus of contractors.

When I am struggling to focus on tasks, my “go-to aid’’ is to sit and write down things I can control. Invariably, as a result of this process, I end up identifying things that I cannot control. It is always occupying my thinking.

I then proceed to unload these very unhelpful intruders from my thinking and wham, away I go. This time focused on important things I have control of.

BITE SIZE KNOW HOW FROM THE ENGLISH COURTS

Injunctions

This week’s TGIF considers In the matter of Nicolas Criniti Pty Ltd (In Liquidation) [2022] NSWSC 1149 which examined the intersection between the winding up provisions in the Corporations Act 2001 (Cth) and the Building and Construction Industry Security of Payment Act 1999 (NSW).

Key takeaways

Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of August 22, 2022.

In Mundo Media Ltd. (Re), the Court refused leave to appeal in a bankruptcy case where a debtor of the bankrupt sought to stay the bankruptcy proceeding in favour of international arbitration. The single proceeding model permits a bankruptcy court to override arbitration agreements.

It is common for construction project owners to finance projects through multiple mortgages, especially in times of rising construction costs. However, when an insolvency situation arises, holdback priority claims from contractors and subcontractors are particularly complex when there are multiple building mortgages involved. The Ontario Superior Court (Commercial List) provided new clarity in this regard in its April 29, 2022 decision in BCIMC Construction Fund Corp. et al.