Herbert Construction Company Ltd v Pi Alexander, Be Alexander, Mj Mollier and Mp Ward in Partnership Trading as The Christie Crown Partnership Hc Nap
| Jurisdiction | New Zealand |
| Judge | D.I. Gendall |
| Judgment Date | 21 October 2011 |
| Neutral Citation | [2011] NZHC 1295 |
| Docket Number | CIV-2010-441-500 |
| Court | High Court |
| Date | 21 October 2011 |
[2011] NZHC 1295
CIV-2010-441-500
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
Summary judgment claim for amounts due under building contract — plaintiffs issued two payment claims — whether claims were defective as proper format was not followed and not properly addressed to precise payer — procedure in contract (architect to assess claims and issue provisional payment schedule) not followed — application of s14 Construction Contracts Act 2002 (“CCA”) (parties free to agree progress payment provisions) — whether a valid payment schedule had already served on plaintiffs.
D.J. O'Connor — Counsel for Plaintiff
S.J. Webster — Counsel for Defendant
JUDGMENT OF ASSOCIATE JUDGE D.I. Gendall
Introduction
Before me is an application by the plaintiff, Herbert Construction Company Limited (Herbert Construction) seeking summary judgment against the defendants, who are collectively the partners trading as a partnership known as the Christie Crown Partnership, for two outstanding payment claims under a building contract. That application is opposed by the defendants.
The defendants, through the Christie Crown Partnership, are the registered proprietors of land situated at 93 Austin St, Onekawa (the property). It appears that an agreement was reached between the Christie Crown Partnership and an associated company Chantal Organic Wholesalers Limited for that company to move into new premises (for its foodstuff production business) to be constructed on the property. The building was to be built by Herbert Construction and it is alleged construction payments for this building which comprise the subject of the present dispute.
On 11 March 2010 a construction contract in terms of the Construction Contracts Act 2002 (“the Contract”) was entered into by Herbert Construction as “the Contractor” and an organisation described as “Chantal Organic Wholesalers” (note not Chantal Organic Wholesalers Limited) as “the Principal”. The signatories to the Contract for the Principal were the first and fourth-named defendants, Peter Ian Alexander (Mr P Alexander) and Maureen Patricia Ward (Ms Ward). The Contract followed the New Zealand Institute of Architects Standard Conditions of Contract, and specified that it was for the construction of the new production facility and offices at the property. The appointed architect under the contract was Fat Parrott Architecture Hawkes Bay.
Construction under the Contract commenced and Herbert Construction's previous payment claims for work completed right up to the two outstanding payment claims in question were paid satisfactorily. Under the Contract, the practical completion date specified was 19 July 2010. Extensions were agreed to this and a final completion date of 27 August 2010 was specified. Mr Savage, a manager of Chantal Organic Wholesalers Limited, deposes in this case to there being many unfinished issues in the building at the property at the time Chantal OrganicWholesalers Limited as tenant needed to move in (as the lease of the other premises it was vacating at the time had expired). These, he deposes, have allegedly caused it lost profits in the order of $98,981.19. (All these aspects and any suggestion that matters were left unfinished are disputed however by Herbert Construction as I understand the position).
On 3 December 2010, Herbert issued payment claim No 10 under the Contract for $38,896.94. On 17 December 2010, Herbert issued a further payment claim, No 11, for $4,614.91. No payment schedule was forthcoming for either from the defendants, nor was payment of these claims made.
In 2011, Herbert Construction perhaps somewhat confusingly, revised its payment claims. Payment claim No 10 was revised and reissued as payment claim No 11, dated 28 June 2011, for the sum of $36,360.77. Herbert Construction then reissued payment claim No 11 (the 17 December 2010 version) as payment claim No 12. It was also dated 28 June 2011 and issued for the sum of $4,614.91. The total amount outstanding under those revised payment claims is accordingly $40,975.68.
Malcolm Andrew Herbert (Mr Herbert) a director of Herbert Construction deposes that Mr P Alexander was served with those reissued payment claims. He said that by facsimile and by email a letter, statement of account and revised payment claims No 11 and No 12 were sent to Mr P Alexander. (Mr Herbert produced a “Transmission Verification Report” which confirmed the number which the fax was sent to: 8439151. As produced in Mr Herbert's third affidavit, Mr P Alexander's fax number is, as per his email signature and website, (06) 843 9151). Mr Connell, a project manager at Herbert Construction, also deposes to having served the documents personally on Mr P Alexander at his offices at the property. Those documents were also sent to the appointed architect under the Contract, Fat Parrott. That is confirmed as I note later in this judgment. No payment schedule or payment was forthcoming however from the defendants for either of these revised payment claims.
Mr P Alexander deposes to not recalling being served with these Herbert Construction payment claims. Mr Du Toit, the director of Fat Parrot deposes specifically however that he did receive the documents.
Rule 12.2(1) of the High Court Rules provides that this Court may give judgment against a defendant if the plaintiff satisfies the Court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action. The principles relevant to that assessment were summarised by the Court of Appeal in Krukziener v Hanover Finance Ltd: [2008] NZCA 187, [2010] NZAR 307 at [26]; adopted more recently by the Court of Appeal in Cockburn v CS Development No 2 Ltd [2010] NZCA 373, (2010) 24 NZTC 24, 431 at [26] as follows:
The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1; (1986) 1 PRNZ 183 (CA), at p 3; p 185. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331; [1979] 3 WLR 373 (PC), at p 341; p 381. In the end the Court's assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
Counsels' Submissions and My Decision
As a preliminary point, before me Mr O'Connor, for Herbert Construction, sought leave at the start of the hearing to produce a further (3rd) affidavit of Mr Herbert, sworn 5 October 2011. That affidavit is four paragraphs long and purports to be relevant only to issues of service. It also does not depose to any material which is contentious between the parties. Despite the opposition of the defendants, I granted leave for that affidavit to be produced.
By its statement of defence to Herbert Construction's claim, the defendants say essentially that:
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(a) The purported payment claims are defective;
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(b) A valid payment schedule has already been served; and
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(c) The defendants have a counterclaim/set-off which is not statute barred under the Construction Contracts Act 2002.
I propose to address Herbert Construction's present application under those three heads. But first, it is useful here to outline a general overview of the Act at issue: the Construction Contracts Act 2002 (the Act).
The purpose of the Act is set out in s 3. This is to “reform the law relating to construction contracts, and, in particular”:
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(a) to facilitate regular and timely payments between the parties to a construction contract; and
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(b) to provide for the speedy resolution of disputes arising under a construction contract; and
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(c) to provide remedies for the recovery of payments under a construction contract.
In considering this general purpose, the Court of Appeal in George Developments Limited v Canam Construction Limited [2006] 1 NZLR 177 (CA) stated at [31]:
The purpose provision of the Act includes the fact that the Act was =to facilitate regular and timely payments between the parties to a construction contract. The importance of such regular and timely payments is well recognised. Lord Denning (quoted in Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1973] 3 All ER 195, 214 (HL) Lord Diplock) said: =There must be a =cashflow' in the building trade. It is the very life blood of the enterprise'.
And, in Salem Ltd v Top End Homes Ltd (2005) 18 PRNZ 122 (CA) the Court of Appeal again reiterated this at [11]:
The whole thrust of the Act is to ensure that disputes are dealt with promptly and payments made promptly, because of the disastrous effects that non-payment has, not only on the head contractor, but also on its employees, subcontractors, and suppliers: George Developments Ltd v Canam Construction...
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