Answer

There is absolutely no provision in the PBA for the employer to interfere with the payment process in any manner whatsoever. Where this happens it is a serious transgression of the Agreement and provides the contractor the grounds to declare a dispute or to give notice of his intention to terminate in terms of 38.1.3,6-8 [4.1 Edition 38.1.6-7]

Answer

JBCC does not advocate the use of a "Materials Off Site" cession form as it is almost certainly legally unenforceable thereby giving the employer a false sense of security. Where the contractor has provided a construction guarantee the cover provided in most instances is sufficient to include for this condition. If not the contractor can provide and Advance Payment Guarantee which covers this condition [31.6.5]

Answer

The only circumstance that allows the contractor to exercise his lien is “Where the employer has not paid or has made partial payment only....” [31.16]. I trust that the bank’s form does not include any provisions that are not within the Agreement provisions.

Answer

The agreement requires the employer to make payment 31.9 and does not specify the method of doing so - cash, cheque etc. JBCC cannot set specific methods of payment so I doubt that you can recoup the cost from the employer as this method is accepted in terms of the law of the land. The best I can suggest is that in future you should qualify your tender with the proviso that payments must be electronic or by certified cheque.

I too get really up tight when cash deposits are made to my account!

Answer

I trust you have read the definition of interest as stated in 1.0. For the purpose of demonstration I am assuming the current Reserve Bank rate (commonly known as the "repo rate") stands at 10.0%. This is published on the financial page of most newspapers and is instantly available on the Web - just search for "repo rate". Note that the rate can change each month so check before calculating the default interest due. Assuming the "default" amount due = R100 000, the late payment period is 21 calendar days the calculation is as follows:

In terms of 31.11 the default interest rate will be 10% x 160% = 16.0%.

Therefore the total amount due is:

R100 000 + (R100 000 x 16.0% x 21 / 365) = R100 920.55

Straight forward? I trust so!

Answer

The employer’s liability for payment of compensatory interest [31.10] is based upon the fact that he now has the benefit of possession of the works, albeit only in a state necessary to meet the requirements of practical completion, whilst the contractor has not yet been paid the full contract value.

Consequently the contractor is entitled to recover compensatory interest on the amounts certified in all interim payment certificates issued 31 c days after the date of practical completion subject to the value of any item still outstanding 20 w days after the issue of the works completion list being excluded for the purposes of calculating such interest [25.4].

Answer

The employer is to pay the contractor the amounts certified in all interim payment certificates within 7 c days of the date for issue of the payment certificate [31.9], being the date stated in the post tender conditions [41.7] and not the date upon which it is issued or that reflected on the certificate . Where the employer fails to make such payment the contractor will be entitled to recover default interest on the amount compounded monthly at 160% of the interest rate [1.1] from the due date until the date of payment [31.11] which interest is to be included in the recovery statement [33.0].

Answer

The employer has no right whatsoever, whether in terms of the agreement or the law, to deduct any amount from that certified in a payment certificate nor may such certificate, once issued, be amended. Failure to pay the certified amount will entitle the contractor to terminate the agreement [38.1.6]. The correct procedure would be to adjust the value certified in the next payment certificate so as to take into account the value of the defective work should this not have been rectified in the interim.