Birchler v Homebuild Homes Limited

[2024] NZHC 534

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2023-454-34

[2024] NZHC 534

UNDER

the Construction Contracts Act 2002

BETWEEN

COLIN ANDREW BIRCHLER and ROBYN KAYLENE BIRCHLER

Appellants

AND

HOMEBUILD HOMES LIMITED

Respondent

Hearing:

12 March 2024

Counsel:

Appellants in person

G P Mason for Respondent

Judgment:

13 March 2024

JUDGMENT OF RADICH J

(Leave to appeal)

[1]        Mr and Mrs Birchler seek leave, out of time, to appeal against my decision of 13 September 2023 in which I dismissed their appeal against a decision of the District Court.1

[2]        In the District Court decision, summary judgment was entered against them and in favour of Homebuild for $45,613.26 plus interest and costs2 being the sum due by them to Homebuild under a Construction Contracts Act 2002 payment claim.

1      Birchler v Homebuild Homes Ltd [2023] NZHC 2547.

2      Homebuild Homes Ltd v Birchler [2023] NZDC 1320.

BIRCHLER v HOMEBUILD HOMES LIMITED [2024] NZHC 534 [13 March 2024]

[3]        Mr and Mrs Birchler say that the Construction Contracts Act regime should not prevail over what they see as being unwarranted charges on Homebuild’s part and that their arguments on those charges still need to be addressed substantively in this proceeding.

[4]        Homebuild says that there is no point of sufficient importance raised by     Mr and Mrs Birchler to outweigh the cost and delay of a second appeal.  Because  Mr and Mrs Birchler did not challenge the payment claim under the relevant provisions of the Construction Contracts Act, it became a due debt. Issues about building quality or costs can, it is said, be raised in separate proceedings, but not in this proceeding. Moreover, Homebuild says, the application for leave has been filed well out of time and there is no adequate explanation for the delay.

Construction Contracts Act scheme – as applied in the District Court and High Court decisions

[5]As was discussed in the September 2023 decision:

(a)Homebuild issued a payment claim to Mr and Mrs Birchler under s 20 of the Construction Contracts Act. It related to charges for engineering works in the house that Homebuild was building for Mr and Mrs Birchler.

(b)Under s 21 of the Construction Contracts Act, if items in a payment claim are disputed, a lesser amount of money may be paid, within a statutory time frame, as long as it is provided with a payment schedule which explains why.

(c)Mr and Mrs Birchler did not pay a lesser amount and did not provide a payment schedule. Their relationship with Homebuild came to an end at that point and their house was completed by other builders.

(d)Had Mr and Mrs Birchler paid what they thought was due, with a payment schedule, then processes are prescribed under the

Construction Contracts Act for the dispute to be determined. Otherwise, the sum must be paid and any underlying dispute can be raised in separate proceedings.

(e)Summary judgment for the payment claim was entered by the District Court on that basis.

Principles guiding the exercise of the Court’s discretion to grant leave to appeal

[6]        Under s 60 of the Senior Courts Act 2016, a decision of the High Court on appeal from the District Court is final unless a party obtains leave to appeal against the decision to the Court of Appeal. An application is to be made to the High Court in the first instance; if the High Court refuses, an application for leave to appeal may be made to the Court of Appeal.

[7]        For leave to be granted, the appeal must raise a question of law or fact that is capable of genuine and serious argument in a case involving a public or private interest of sufficient importance to outweigh the cost and delay of an appeal.3

[8]        Not every alleged error will be sufficiently important to justify a further appeal. Accordingly, the test is restrictive and needs to be applied in such a way as to ensure that the Court of Appeal’s resources are reserved for cases in which issues of sufficient importance are raised.

Application of the principles

[9]        The principles I have outlined were discussed at a teleconference with the parties on 7 February 2024 and are summarised in the minute that followed.

[10]      Mr and Mrs Birchler have filed a detailed application and lengthy affidavit evidence in support of their application. Mr Birchler went to considerable lengths in his affidavit to explain the building project as a whole and to outline his concerns about

3      Waller v Hider [1998] 1 NZLR 412 at 413 (CA) and Snee v Snee (1999) 13 PRNZ 609 (CA) at [15].

the nature and quality of the work to which the payment claim relates. And submissions have been filed which address the delay in applying for leave to appeal. The lengths to which Mr and Mrs Birchler have gone to express their views, and the intensity of those views, is acknowledged.

[11]      Mr and Mrs Birchler emphasised during the hearing of this application that what they are wanting is fair play. They feel that their concerns and their arguments have been disregarded by Homebuild and by the courts. However, as was discussed in my September decision and in the decision of the District Court, the ability of the Court to consider the points that Mr and Mrs Birchler wish to raise is constrained by the Construction Contracts Act scheme.

[12]      It is sometimes described as a “pay now, argue later” scheme, reflecting Parliament’s intention in putting the legislation in place.

[13]      In circumstances in which the scheme has been applied on its face and in which the ability remains for Mr and Mrs Birchler to use separate proceedings or dispute resolution processes to address the points that concern them, it cannot in my view be said that a point of sufficient importance is raised that would justify a second appeal.

[14]      Mr and Mrs Birchler say that the Construction Contracts Act regime “should not null and void the contract between the parties, especially cl 31”. Clause 31 is the dispute resolution provision in the building contract which provides for arbitration. As I explained in [58] of my decision, under s 12 of the Construction Contracts Act, a party cannot contract out of the Act. Clause 31 enables disputes arising from the building contract to be referred to an arbitrator. The clause continues to have effect. But it does not alter the operation of the Act under which the payment claim has become due in the first instance.

[15]      Accordingly, I can see no available basis upon which leave to appeal could be granted.

The application for leave was made out of time

[16]      The judgment was delivered on 13 September 2023. The application for leave to appeal was filed on 21 December 2023, 45 days after the 20 working day period prescribed by r 20.22(2) for the bringing of an application for leave expired.

[17]      Under r 1.19 of the High Court Rules, the Court may, in its discretion, extend the time appointed by the rules for the taking of any step in a proceeding.

[18]      In considering the application itself in the first instance, I have proceeded on the basis that, under r 1.1.9, the time within which the application was to have been brought has been extended.

[19]      But counsel for Homebuild is right to say that no clear evidence has been given in support of an application to extend the time for making the application for leave.

[20]      Mr Birchler has, in submissions he has filed for this application, explained his uncertainty and confusion over the appeal process.  He has explained that he and  Mrs Birchler met with a lawyer in relation to the proceeding on 19 September 2023. However, it appears that the lawyer was not engaged and that, on 27 September 2023, Mr and Mrs Birchler were provided a list of lawyers by the Manawatū Community Law Centre. Then, from around 20 November 2023, the Birchlers were in relatively regular communications with the Registrar of the High Court and then with the Registrar of the Court of Appeal. He has described the way in which, on 27 November 2023, he was advised by a member of the Registry staff at the Court of Appeal that he needed to seek the leave of the High Court to bring an appeal in the first instance. Following engagement on Mr Birchler’s part with the High Court Registry staff, the application for leave was then filed on 21 December 2023.

[21]      While there are gaps in this  time  line,  I  do  acknowledge  the  point  that Mr Birchler has made to the effect that he has found this process to be particularly stressful and that he is struggling in material ways with both the substantive and the procedural aspects of the proceeding.

[22]      Accordingly, I have not allowed the timing issue to get in the way of the Court’s consideration of the application itself.

Result

[23]For the reasons given, the application for leave to appeal is declined.

Radich J

Solicitors:

Alison Green Lawyer, Palmerston North for Respondent