69 Greenlane East Limited v Orient Construction Limited

[2023] NZHC 911

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-770

[2023] NZHC 911

IN THE MATTER

an application to set aside a statutory

demand under s 290 of the Companies Act

BETWEEN

69 GREENLANE EAST LIMITED

Applicant

AND

ORIENT CONSTRUCTION LIMITED

Respondent

Hearing:

On the papers

Appearances:

N Perera for Applicant

P Shanahan-Pinker for Respondent

Judgment:

24 April 2023

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    This proceeding involves a construction dispute between 69 Greenlane East Ltd (Greenlane) as principal and Orient Construction Ltd (Orient) as contractor. The background is traversed in my judgment of 5 September 2022. That judgment dealt with an application by Greenlane for an order setting aside a statutory demand served on it by Orient arising from a construction contract between the parties in which Greenlane had engaged Orient to carry out certain construction work as that term is defined in the Construction Contracts Act 2002.

[2]    In my judgment I set aside Orient’s statutory demand.1 I concluded that Greenlane had “… established that there is a substantial dispute as to whether or not the amount of Orient’s payment claim is due”.2

1      69 Greenlane East Ltd v Orient Construction Ltd [2022] NZHC 2246.

2 At [31].

69 GREENLANE EAST LIMITED v ORIENT CONSTRUCTION LIMITED [2023] NZHC 911 [24 April 2023]

[3]    Now, over six months later, Orient is seeking a recall of my judgment pursuant to r 11.9 of the High Court Rules 2016 which provides as follows:

11.9     Recalling judgment

A Judge may recall a judgment given orally or in writing at any time before a formal record of it is drawn up and sealed.

[4]    The leading case relating to the application of the rule is Horowhenua County v Nash (No 2)3 where Wild CJ said:

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[5]    That passage is replicated in virtually every judgment in which a recall is sought. Its application is perhaps not quite as strict as the passage may suggest. The third category of case identified by Wild CJ — “some other very special reason” has given rise to successful applications in a range of circumstances, including where, for example, the Court has simply failed to address an obvious issue or an argument raised by one or either or both parties.

[6]    That foreshadows the application made on behalf of Orient here. Counsel for Orient contends that “the case was disposed of in a manner which was not canvassed by either party in their submissions or raised by the Judge in the hearing which gives sufficient grounds for a recall”. In making that submission counsel rely on Sipka Holdings Ltd v Merj Holdings Ltd,4 which I accept is supportive of the general principle on which Orient relies.

[7]    However, I do not accept that the principle applies here. The validity of the payment claim is a critical aspect in any case involving the payment regime of the

3      Horowhenua County v Nash (No 2) [1968] NZLR 632 at 633.

4      Sipka Holdings Ltd v Merj Holdings Ltd [2015] NZHC 3073.

Construction Contracts Act. Orient’s claim was such a claim. Therefore the issue of whether the payment claim was valid was at the heart of the case.

[8]    As Mr Perera submits on behalf of Greenlane, there were submissions and exchanges between the Court and counsel at the hearing on the subject of the validity or otherwise of Orient’s payment claim, including as to whether Orient was entitled to serve a payment claim given where the contract had got to.

[9]    Thus I am not prepared to accept the essential foundation for the application, that is to say that the judgment was tainted by procedural unfairness as it was determined on a basis which was not open for argument at the hearing.

[10]The application is dismissed.

[11]   Costs are reserved. My preliminary view is that the applicant, Greenlane, which is the respondent in relation to this application, is entitled to costs on a 2B basis. I would expect counsel to be able to resolve costs with the benefit of that preliminary indication on my part.

Associate Judge Johnston

Solicitors:

Legal Associates, Auckland for Applicants K3 Legal Limited, Auckland for Respondents