The Construction Contracts Act 2002 runs on a simple but unforgiving principle: pay now, argue later. When a contractor or subcontractor serves a payment claim, the clock starts immediately. A respondent who fails to reply with a compliant payment schedule within the contractual or statutory window can find the full claimed sum crystallising into a recoverable debt, regardless of the underlying merits of the dispute.
For principals, head contractors, and subcontractors on the receiving end of a claim, the difference between a strong commercial position and a default judgment often comes down to the first five working days. This guide walks through the respondent's obligations under the Act, the anatomy of a valid payment schedule, and what happens when a dispute is referred to adjudication.
This article supports our New Zealand construction adjudication respondent workflow, which sets out every stage from auditing the payment claim through to opposing enforcement. Use the full matter plan for the task-by-task checklist, statutory deadlines, and drafting notes.
The Section 20 and Section 21 Payment Regime
A payment claim under section 20 must identify the construction work, the claimed amount, the due date, and the basis of calculation. Once it is validly served, the respondent's only protection is a payment schedule under section 21. If no schedule is provided, section 22 converts the claimed amount into a debt due, and the claimant can recover it in court or suspend work under section 72. This is why responding to a building adjudication claim begins long before any adjudicator is appointed - it begins with the schedule.
Drafting a Valid Section 21 Payment Schedule
A compliant payment schedule must state the scheduled amount the respondent proposes to pay and, critically, the reasons for any difference between that figure and the claimed amount. Vague or boilerplate reasons are fatal. In Construction Advantage Ltd v Eljayej Holdings Ltd [2025] NZHC 1749, the High Court reinforced that the reasons must be specific enough for the claimant to understand why payment is being withheld. A respondent cannot raise new grounds at adjudication that were not signalled in the schedule.
- Identify the payment claim it responds to and the scheduled amount.
- Set out each reason for withholding, with sufficient particularity to survive scrutiny.
- Coordinate with a quantity surveyor where valuation or defective work is in issue.
- Serve the schedule within the contractual period, or the default 20 working days, whichever is shorter.
- Preserve every ground you may later rely on, because the matter plan for responding to a construction adjudication treats the schedule as the foundation of the entire defence.
When the Dispute Is Referred to Adjudication
If the claimant serves a notice of adjudication, the respondent must move quickly. The adjudication response under section 37 is due within five working days of the adjudicator's appointment, with sections 37A governing any reply and rejoinder. Procedural compliance is not optional: in Chillex Services Ltd v Best Air Conditioning Ltd [2025] NZHC 1729, the Court underscored that strict adherence to the statutory timetable and natural justice requirements determines whether a determination will survive review. Our step-by-step adjudication response workflow tracks each of these deadlines so nothing lapses.
Special Respondent Positions: Residential Occupiers and Landowners
Not every respondent stands in the same position. A residential occupier benefits from restrictions on charging orders, and section 31 provides a specific exemption that can defeat enforcement against the family home. Where that exemption is in play, the residential occupier Section 31 exemption pathway sets out how to assert it. Separately, a landowner who is not the contracting respondent may face liability under section 50 but retains a review right under section 52 using the prescribed Form 4. The Section 52 landowner review workflow covers that District Court application in detail.
Enforcement and Opposition
Once an adjudicator issues a determination, the claimant can enter it as a judgment under section 73. The respondent's window to oppose entry as a judgment under section 74 is again only five working days, and the grounds are narrow - typically confined to jurisdictional error or a denial of natural justice rather than a re-argument of the merits. Understanding this compressed timetable in advance is the difference between preserving a defence and conceding the debt.
Why the First Working Days Decide the Case
The Construction Contracts Act 2002 cannot be contracted out of, so a respondent cannot rely on bespoke contract wording to escape the statutory timetable. That makes the opening days after a payment claim arrives the most important phase of the whole dispute. Before drafting anything, confirm that the underlying agreement is a construction contract within the meaning of the Act, that the document served is a valid payment claim under section 20, and that the response period has not already started to run. If genuine grounds to withhold exist, capture every one of them in the payment schedule, because the adjudication response built on that schedule is where a New Zealand construction adjudication is ultimately won or lost. A respondent who treats the claim as a commercial negotiation rather than a statutory deadline routinely forfeits defences that were available on day one.
Using the Matter Plan
Construction adjudication in New Zealand rewards preparation and punishes delay. The complete construction adjudication respondent checklist gives practitioners the full sequence: conflict checks, payment claim auditing, drafting the section 21 schedule, lodging the adjudication response, and managing post-determination enforcement. Where the client is a residential occupier or a non-respondent landowner, branch into the Section 31 exemption pathway or the Section 52 review pathway for the tailored steps.