Andrew Lawson Building Limited v Swennen HC Blenheim CIV 2009-406-286

[2010] NZHC 274

IN THE HIGH COURT OF NEW ZEALAND

BLENHEIM REGISTRY

CIV-2009-406-286

BETWEEN  ANDREW LAWSON BUILDING LTD

Plaintiff

ANDJEAN-PIERRE SWENNEN & VEERLE GIELEN

Defendants

Hearing:         18 February 2010

Appearances:  B.A. Fletcher - Counsel for Plaintiff

L. Radich - Counsel for Defendant

Judgment:      19 February 2010 at 2.00 pm

JUDGMENT AS TO COSTS

OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 19 February 2010 at

2.00 pm pursuant to r 11.5 of the High Court Rules.

Solicitors:            Gascoigne Wicks, Solicitors, PO Box 2, Blenheim 7240

Radich Law, Solicitors, PO Box 842, Blenheim

ANDREW LAWSON BUILDING LTD V JP SWENNEN & V GIELEN HC BLE CIV-2009-406-286  19

February 2010

[1]      When this matter was called for hearing before me on 18 February 2010 there were two applications before the Court for consideration:

(a)An   opposed   application   by  the   plaintiff   for   summary  judgment against the defendants.

(b)An   application   (effectively   by   way   of   Memorandum)   from   the plaintiff to transfer the balance of the proceeding to the District Court.

[2]      The  plaintiff’s  claim  against  the  defendants  in  this  proceeding  relates  to  a “payment claim” dated 10 December 2009 issued to the defendants as employers for work  carried  out  by  the  plaintiff  as  builder  on  a  building  project  in  terms  of  the Construction Contracts Act 2002.

[3]      It appears now to be accepted by the plaintiff that this “payment claim” was technically  invalid  in  that  it  did  not  contain  certain  information  required  to  be included for residential occupiers in accordance with s. 20(3) Construction Contracts Act 2002.

[4]      In addition, as counsel for the defendants also noted here, another issue arose. This is that, even if the purported payment claim were not rendered invalid by this deficiency, in terms of s. 22(b)(ii) Construction Contracts Act 2002 the defendants had  20  working  days  from  receiving  the  claim  to  respond  to  it  by  providing  a payment  schedule  but  here  it  seems  the  plaintiff  filed  its  claim  in  the  present proceeding   only   9   working   days   after   serving   the   payment   claim   upon   the defendants.  The Construction Contracts Act 2002 provides that the 20 working day period  for  providing  a  payment  schedule  may  be  shortened  by  agreement  in  the contract between the parties.  Whilst the building contract between the parties in this case, as I understand it, did specify that responses to invoices were to be provided within 5 days, the contract did not provide that payment schedules had to be issued in  any shorter  period  than  that  allowed  by s.  22(b)(ii)  Construction  Contracts  Act 2002.

[5]      As a result of these matters, before me on 18 February 2010 counsel for the plaintiffs  acknowledged  that  the  summary judgment  application  could  not  proceed and sought leave to discontinue it.

[6]      An  order  followed  on  18  February  2009  granting  leave  to  the  plaintiff  to discontinue the summary judgment application against the defendant.

[7]      Costs were reserved on this application and I indicated at the hearing that my decision on costs would be issued shortly.

[8]      This judgment now deals with the costs question.

[9]      Before   addressing   that   issue,   however,   I   need   to   mention   the   second application  which  was  before  the  Court,  this  being  an  application  to  have  the proceeding transferred to the District Court.   On that application at the 18 February 2010 hearing, an order was made under s. 46 District Courts Act 1947 transferring this proceeding to the District Court at Blenheim.  This order was made on the basis that the proceeding was within the jurisdiction of the District Court and in my view there were no special features of this case or special issues raised in the proceeding which would require it to be retained in the High Court.

[10]     On this, the comments at McGechan on Procedure at para. HR12.12.10 are apposite:

“HR12.12.10

Under s. 46 District Courts Act 1947, the High Court has the power to transfer to the

District Court, proceedings within the jurisdictional limits of the Court.  This power

is frequently used where summary judgment has been refused in the High Court, and such an order may be expected where there are no special features of the case:  Ross Asphalt Ltd v Neame  12/7/96, Master Venning, HC Blenheim CP5/96.

[11]     I now return to the one presently outstanding issue before the Court which is the defendants’ claim to costs in this Court on the plaintiff’s discontinued summary judgment application.

[12]     Although in the present case  the  plaintiff  has  discontinued  its  summary judgment application against the defendants and r 15.23 High Court Rules provides

for a plaintiff who discontinues a proceeding against a defendant to pay costs up to

and   including   that   discontinuance,   here   the   proceeding  itself   has   not   been discontinued.

[13]     Turning to the position regarding costs on a generally unsuccessful summary judgment application,  McGechan  on  Procedure  notes  at  para.  HR12.12.08(1)  that applications  for  summary  judgment  are  expressly  exempted  from  the  general  rule requiring  costs  on  interlocutory  applications  to  be  fixed  and  paid  when  those applications are determined – r 14.8(3).

[14]     The  position  concerning  dismissed  summary  judgment  applications  is  that costs are generally to be reserved to be dealt with at trial in the absence of some fault being  established  or  some  other  exceptional  circumstances  –  NZI  Bank  Limited  v Philpott  [1990] 2NZLR 403 (CA) Air  Nelson  Ltd  v  Airways  Corporation  of  NZ (1992) 6 PRNZ1 (CA).

[15]     Notwithstanding the general position, however, in Vision Aluminium Limited

v McLaughlan High Court, Christchurch, 8 June 1990, Master Hansen CP123/90, the Master also stated that he saw nothing in the decision in the Philpott case to suggest that  where  it  was  clear  to  a  plaintiff  from  the  outset  that  the  defendants  had  an arguable defence, the Court was in some way inhibited from awarding costs at the summary  judgment  stage.        Master  Hansen  considered  that  this  is  the  only  means available  to  the  Court  to  ensure  that  unmeritorious  applications  for  summary judgment do not flood the lists – see McGechan on Procedure HR12.12.08(2).

[16]     Reaching a similar conclusion, Master Williams QC in Apostolatos v NZI Co Limited   High   Court   Wellington,   1   June   1990   CP118/90   awarded   costs   and disbursements  against  the  plaintiff  because  in  his  view  the  plaintiff  should  have realised  at  an  earlier  stage  either  that  applying  for  summary  judgment  was  not warranted or that if it was warranted, the application ought to have been abandoned soon after the comprehensive opposition from the defendant became apparent.

[17]     As I have noted above, in the present case, Mr. Fletcher for the plaintiff acknowledged at the hearing before me that the plaintiff’s summary  judgment application should not have been issued as  a  reasonably arguable  defence  existed.

This defence was at least to the effect that the payment claim issued by the plaintiff was  defective,  although  Mr  Fletcher,  counsel  for  the  plaintiff,  did  note  that  this particular payment claim was the second to last one issued by the plaintiff for what was  a  large  building  project  and  all  previous  payment  claims  had  included  the required residential occupier notice.

[18]     From all the circumstances here, what is clear to me is that this was not an appropriate  case  for  a  summary  judgment  application  to  be  made  and  indeed,  by discontinuing  the   application,   the   plaintiff   has   effectively  gone   some   way  to acknowledging this.

[19]     Further, given that an order has now been made transferring this proceeding

to the District Court, this case bears the slightly unusual circumstance that this is the last occasion on which it will be before the High Court such that in my view, costs

on the summary judgment application should be awarded now.

[20]     That said, I am satisfied that at this point costs should be fixed and awarded here and that the defendants, in successfully opposing the application, are entitled to those  costs  and  disbursements  on  the  plaintiff’s  discontinued  summary  judgment application.

[21]     An  order  is  now  made  that  the  plaintiff  is  to  pay  to  the  defendants  costs calculated  on  a  Category  2B  basis  together  with  disbursements  as  fixed  by  the Registrar with regard to the plaintiff’s discontinued summary judgment application.

‘Associate Judge D.I. Gendall’