AC/JV Holdings Ltd v General Construction Group Ltd - [2023] NZHC 2212

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2023-412-079

[2023] NZHC 2212

BETWEEN
AC/JV HOLDINGS LTD

Applicant

AND

GENERAL CONSTRUCTION GROUP LTD

First Respondent

PETER BERNARD DEGERHOLM

Second Respondent

Hearing: 15 August 2023

Counsel: (via VMR)

A J Peat for Applicant

A S Olney and H M Mander for First Respondent

Judgment:

16 August 2023

JUDGMENT OF CHURCHMAN J

[1] At the conclusion of the hearing of this matter on the afternoon of 15 August 2023, I granted the interim injunction sought by the applicant and indicated that my reasons for doing so would be recorded in writing and issued as soon as they are available. I now set out those reasons.

[2] On 14 August 2023, the applicant applied, without notice, for an interlocutory injunction. The application was served on a Pickwick basis on the respondents.

[3] I set the matter down for an urgent hearing at 2.15pm on 15 August 2023. Counsel for the applicant and first respondent appeared by VMR. I was advised that the second respondent abided the decision of the Court.

AC/JV HOLDINGS LTD v GENERAL CONSTRUCTION GROUP LTD [2023] NZHC 2212 [16 August 2023]

Background

[4] The late Clark Proctor (Clark) and Alistair Hey (Alistair) were involved in a number of building and development projects in Central Otago.

[5] One of their projects was a joint venture to develop a plot of land at Harvest Road, Cromwell (the land).

[6] They incorporated a company called AC/JV Holdings Ltd (AC/JV). That company was to own the land at Harvest Road with Clark and Alistair each holding a 50 per cent shareholding in that company. They were both directors.

[7] A 36-room accommodation block to house seasonal workers along with a manager’s residence was to be erected on the land. The land was owned by the local Council and part of the arrangement between AC/JV and the Council was that the accommodation block was to be completed and a Certificate of Public Use (CPU) issued before settlement of the sale of the land occurred.

[8] Alistair incorporated a construction company, General Construction Group Ltd (GCG), on 6 December 2018.

[9] It was agreed between GCG and AC/JV that GCG would carry out the construction work for the accommodation block. No formal construction agreement was entered into but a price of $4.5 million, plus GST, was agreed.

[10] Clark passed away unexpectedly on 26 June 2020. There had apparently been some disagreements between him and Alistair shortly before his death.

[11] Clark’s widow, Jacqueline Theresa Fitzgerald (Jackie), was an executor of his estate and became a director of AC/JV.

[12] As administrator of Clark’s estate, Jackie set about separating the business relationships between the estate and Alistair. The Harvest Road project was only one of a number of joint projects and business enterprises.

[13] Kevin Charles O’Neil (Kevin), a contractor of New Plymouth and a good friend of Clark’s, and Martin Fine, a commercial solicitor, were engaged to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 2212
Decision Date: 16 August 2023

CaseChat Overview and Summary

AC/JV Holdings Ltd sought an interim injunction against General Construction Group Ltd to prevent the latter from proceeding with an expert determination process regarding claims for additional payments for construction work completed on a property at Harvest Road, Cromwell. The applicants argued that the claims were made for the first time two years after the completion of the works, without any supporting documentation, and that the expert determination process could not be invoked under the terms of the NZS 3195 construction contract. Churchman J was satisfied that there was a serious question to be tried, particularly given the authority of the Rooney Earthmoving Ltd v Infinity Farms Ltd decision which held that an expert could only be invited to make a determination while the contractor was still on site and engaging in physical works. The Court found that the balance of convenience favoured the applicant, as the nature of the dispute required extensive discovery and evidence calling, which was not suited to the quick-fire process envisioned by the contract. The Court concluded that the overall justice of the case required the issuance of an interim injunction to prevent the first respondent from proceeding with the expert determination process. The Court ordered that the first respondent was restrained from proceeding with the expert determination in relation to the claims raised on 31 July 2023.

Orders