Bulmer v Envisage Construction Limited
[2017] NZHC 318
•2 March 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-739 [2017] NZHC 318
UNDER the District Courts Act 1947 IN THE MATTER
of an appeal against a decision of the
District Court at Lower HuttBETWEEN
PETER ANTHONY BULMER AND VICKI JEANE BULMER
Appellants
AND
ENVISAGE CONSTRUCTION LIMITED
Respondent
Hearing: 23 February 2017 Appearances:
F B Collins and K U Gunawardana for Appellants
M Freeman for RespondentJudgment:
2 March 2017
JUDGMENT OF COLLINS J
Introduction
[1] This judgment explains why I am allowing the Bulmers’ appeal against summary judgment entered against them in the Lower Hutt District Court in favour of Envisage Construction Limited (Envisage).
[2] The effect of my judgment is that the claim by Envisage and the counterclaim by the Bulmers will have to be determined in the usual way in the District Court.
Background
[3] Mr and Mrs Bulmer owned a vacant piece of land at 9 MacDiarmid Place, Lower Hutt. In late 2013 they approached Mr Henderson of Envisage to design a
BULMER v ENVISAGE CONSTRUCTION LTD [2017] NZHC 318 [2 March 2017]
house for their section. On 13 August 2014 the Bulmers and Envisage signed an “intent agreement” under which Envisage agreed to design a house for the Bulmers who in turn agreed to pay Envisage $10,000 for the house plans.
[4] On 26 June 2014 Envisage submitted a quotation to the Bulmers to build their new home at a fixed price of $428,348. Variations were made to that quotation on
24 July, 21 October and 29 October 2014. The variations increased the sum quoted to $468,387. On 30 October 2014 Envisage provided the Bulmers with “Specifications and Contract Information for [a] New Residential Home” (Specifications).
[5] On 10 November 2014 the Bulmers and Envisage signed a contract for the building of the Bulmers’ home. The contract was a standard Registered Master Builders Federation Residential Building Contract. I explain the key provisions of that contract in paragraphs [15] to [23]. Suffice for present purposes to record that under the terms of the contract the Bulmers were required to pay a deposit of
$20,000, pay for a number of specified items and make 16 staged payments upon
“substantial completion” of the matters covered by each staged payment.
[6] Envisage commenced construction work in November 2014 and rendered invoices for 12 of the staged payments between 10 November 2014 and 9 June 2015.
[7] The invoice sent by Envisage on 9 June 2015 was for the 12th staged payment and covered “all interior decoration or coatings”. The amount specified in that invoice was $14,518.48.
[8] In June 2015 Envisage made a number of adjustments under the contract to reflect changes to the provisional sums that the Bulmers had agreed to pay directly to various trade persons and suppliers. Those adjustments were recorded on an invoice signed by the Bulmers on 12 June 2015 and reduced the contract price to $439,279.
[9] On 16 June 2015 the Bulmers sent a letter to Envisage stating they were withholding payment of the 12th staged payment. The Bulmers identified the
following four matters which they said justified them not paying the $14,518.48 invoiced by Envisage:
(a) The failure to put in place slab edge insulation, valued by the Bulmers at $8,500.
(b) The failure to install two attic stairs valued at $1,000. (c) An “allowance for laundry” in the sum of $1,800.
(d) An “allowance for appliances” in the sum of $10,700.
In their letter the Bulmers said that they were “withholding payment for these items, because the non completion [of these items] means that the project [was] materially less complete than it should be for the staged payments made to date”.
[10] Envisage responded to the Bulmers’ letter on 16 June. In essence, Envisage disputed the Bulmers reasons for withholding payment. Envisage then gave notice on 24 June 2015 that if the invoice for the 12th staged payment was not paid in full by 2 July 2015 then Envisage would suspend working on the project until the payment was made.
[11] On 16 July the Bulmers’ lawyers requested Envisage resume work. That letter referred to an assessment by a quantity surveyor that the Bulmers had by this time overpaid $16,298.22 to Envisage. The parties attended mediation but no agreement was able to be reached. On 26 August 2015 the Bulmers gave Envisage notice that they were cancelling the contract on the basis that Envisage had unlawfully suspended work and wilfully neglected to carry out its obligations under the contract. The Bulmers engaged other contractors to complete the construction of their home.
[12] Envisage commenced proceedings in the Lower Hutt District Court in October 2015 seeking, amongst other matters, judgment against the Bulmers for the sum of $14,518.48. The Bulmers filed a statement of defence and counterclaim on
5 November 2015 in which they sought $30,993.87 from Envisage. This sum was
described as an “overpayment” in the counterclaim. On 18 November 2015
Envisage filed its application for summary judgment against the Bulmers.
[13] In his affidavit in opposition to summary judgment, Mr Bulmer said:
[16] We do not accept that the work required under stage (xii) ‘all interior decoration or coatings’ had reached substantial completion, as asserted by Envisage Construction. This was not the first time that they presented an invoice when it was clear the work wasn’t substantially done. As at 9 June
2015, the front door wasn’t painted (or indeed present at all), the non-
existent ceiling hatches/attic stairs hadn’t been painted, the banister that wasn’t present also wasn’t painted, the garage was almost completely
unpainted/unvarnished and whole sections of the house did not have a final
coat of paint. There was no carpet or vinyl flooring present. In his affidavit Mr Henderson claims that ‘carpet’ (carpet & vinyl) ‘doesn’t have a stage payment associated with it’. I disagree … it was our understanding that the carpet/vinyl was included in stage (xii) ‘all interior decorations or coating[s]’.
[14] On 15 August 2016 Judge Tompkins issued summary judgment in favour of Envisage in the sum of $14,518.48 plus costs and interest.1 Judge Tompkins concluded there was no defence to Envisage’s application for summary judgment and that the Bulmers purported cancellation of the contract was actually an unlawful repudiation of the contract by them. Judge Tompkins reasoned that the Bulmers’ counterclaim assumed a valid cancellation of the contract and that as the Bulmers
had unlawfully repudiated the contract, the counterclaim could not succeed and was therefore summarily dismissed.
The contract
[15] The following nine provisions of the contract are relevant to the present dispute.
[16] First, clause 6.2(A) required the Bulmers to pay a $20,000 deposit on entering into the contract. That deposit formed part of the overall contract price.
[17] Second, clause 6.2(B) required the Bulmers to pay for specific items listed as special conditions. These items included “excavation or site works” ($7,000) and “in
slab heating and kitchen deposit” ($36,625).
1 Envisage Construction Ltd v Bulmer [2016] NZDC 15293.
[18] Third, clause 6.2(C) listed 16 staged payments upon “substantial completion”. The specified staged payments included:
(i) Foundations and floor structure: $36,296.20.
…
(v) All exterior doors and windows: $32,666.58.
(vi) All exterior wall linings and/ or veneers: $26,296.20 (vii) All exterior decoration or coatings: $7,259.24
…
(ix) All interior linings: $18,148.10.
…
(xii) All interior decoration or coatings: $14,518.48. (xiii) Kitchens and bathrooms: $21,777.72
…
(xvi) Final payment: $18,148.10.
The final payment represented five per cent of the contract price. Clause 6.2(C) also provided that “all payments [were] due within seven (7) working days of the date of the payment invoice”.
[19] Fourth, “substantial completion” was defined in clause 80 as meaning, “when the item of work [was] 95% completed”.
[20] Fifth, clause 3 provided that the contract price was “subject to adjustments provided for in the Building Contract”. This related to any variations made to the contract and also covered any “provisional sums” in the contract. The term “provisional sums” was defined in cl 10.7 of the Specifications as meaning, “a defined part of work, materials or fittings that [were] not able to be defined at the time of writing [the] specification”.
[21] Sixth, under clause 6.2(D) Envisage was able to include the costs of any adjustment at any staged payment under the contract.
[22] Seventh, clause 69 enabled Envisage to suspend work provided written notice was served on the Bulmers. If the Bulmers did not pay the invoiced amount within
five working days after the date of service of the notice to suspend, Envisage was
entitled to “immediately suspend work”.
[23] Eighth, clause 80 of the contract defined “other items” which did not form part of the dwelling structure. The definition of “other items” included “carpets and floor coverings”.
[24] Ninth, clause 67 of the contract provided that if Envisage failed to proceed with the works with reasonable diligence or were persistently, flagrantly or wilfully neglecting to carry out its obligations under the contract, and Envisage had not remedied the default within ten (10) working days of receiving written notice of the default, then the Bulmers were entitled to cancel the contract.
District Court judgment
[25] The parties and Judge Tompkins proceeded on the basis that the dispute was not governed by the Construction Contracts Act and was “founded on breach of contract”.2
[26] Judge Tompkins focused upon two asserted breaches of contract. The first was the Bulmers’ failure to pay the 12th staged payment invoice. The second was the Bulmers’ purported cancellation of the contract in response to Envisage’s suspension of work.
[27] In addressing the first breach of contract issue Judge Tompkins recorded that clause 6.2(D) allowed for adjustments to the contract price, including provisional sums, to be included by Envisage in “any staged payment”. He then considered the issues raised by the Bulmers in their letter of 16 June 2016 and held that none of the
matters raised by the Bulmers in that letter related to the 12th staged payment invoice
that the Bulmers had refused to pay. Judge Tompkins said:3
Ultimately, the contract provides [Envisage] is the party responsible for adjusting the contract at any staged payment. There is no provision permitting the Bulmers to refuse to pay based either on a credit for future
provisional sums or for work yet to be done from ‘substantially complete’
earlier stages.
[28] Judge Tompkins determined there had been a breach of contract by the Bulmers because Envisage was entitled to invoice the Bulmers upon substantial completion of the 12th staged work programme which had been done in accordance with the contract.
[29] Judge Tompkins concluded Envisage’s suspension of work was validly undertaken pursuant to clause 69. He expanded upon this conclusion by saying:4
…There are no caveats on this provision. To read into the contract, as the Bulmers suggest, an implied term which provides that a failure to pay will only arise if the amount is ‘either undisputed or certified as being due’ undermines the suspension regime. It would mean that builders are required to continue expending funds on construction notwithstanding that they have not yet been paid in accordance with the contract.
[30] Judge Tompkins concluded the contract entitled Envisage to suspend work but did not entitle the Bulmers to cancel on the basis of Envisage’s refusal to resume work.
[31] Judge Tompkins then addressed the Bulmers’ several defences. He observed these defences mirrored the Bulmers’ counterclaim and were based upon their belief they had overpaid Envisage. Judge Tompkins concluded the Bulmers could not validly set off the cost of work uncompleted from earlier stages because the contract provided for “substantial” completion of each stage and there was no suggestion that in the ordinary course of events the work would not have been completed.
[32] Judge Tompkins also dismissed the Bulmers’ claim for set off concerning pre- paid provisional sums stating that any apparent overpayment only emerged because the Bulmers chose wrongfully to repudiate the contract when they did. Judge Tompkins held there was nothing to establish any of the defences to Envisage’s claim and accordingly entered summary judgment for Envisage and dismissed the Bulmers’ counterclaim.
Grounds of appeal
[33] The Bulmers have raised three grounds of appeal. Those grounds of appeal are expressed in the following questions:
(a) Is it reasonably arguable that Envisage had wrongly suspended work under the contract?
(b)Is it reasonably arguable that the Bulmers were entitled to a refund for pre-payment on provisional cost sums irrespective of who repudiated the building contract?
(c) Should the presence of significance factual disputes between the parties have prevented the entry of summary judgment?
First ground of appeal
[34] The first ground of appeal raises an important issue of law concerning the role, if any of equitable set offs in the staged payment regime set in clause 6.2(C) of the contract, and the ability of a builder to invoke the suspension of work provisions of clause 69 of the contract when a home owner seeks to raise a set off.
[35] Judge Tompkins proceeded on the basis that clause 69 could not be construed in the way suggested by the Bulmers who had argued that the suspension of work clause could not be relied upon by Envisage when the Bulmers had raised a dispute about the legitimacy of a staged payment invoice. Judge Tompkins said the approach contended for by the Bulmers “… would mean that builders [were] required to continue expending funds on construction notwithstanding that they have
not been paid in accordance with the contract”.5
[36] Judge Tompkins' explanation of the rights of Envisage to invoke the suspension of work provisions of cl 69 of the contract overstated the rights of the builder in this case and understated the rights of the Bulmers. As Lord Diplock
explained in Gilbert-Ash (Northern) Limited v Modern Engineers (Bristol) Limited,6 “… when one is concerned with a building contract one starts with the presumption that each party is to be entitled to all those remedies for its breach as would arise by operation of law …” (emphasis added). Lord Denning’s “heresy that there could be no set off against sums certified under construction contracts … and that they were virtually cash” is not the current law.7
[37] In Grant v NZMC Ltd8 Somers J for the Court of Appeal explained the law concerning equitable set offs in the following way:9
The principle is, we think, clear. The defendant may set off a cross claim which so affects the plaintiff’s claim that it would be unjust to allow the plaintiff to have judgment without bringing the cross claim to account. The cross claim must be such that the two are in effect interdependent, judgment on one cannot be fairly given without regard to the other, the defendant’s claim calls into question or impeaches the plaintiff’s demand. It is neither necessary, nor decisive, that the claim and cross claim arise out of the same contract.
[38] Importantly, for present purposes, Grant v NZMC is also authority for the proposition that the right of set off may be excluded, either expressly or by clear implication in the contract. Citing Lord Salmon in Gilbert-Ash, Somers J recorded:10
There is nothing to prevent [the parties to a building contract] from extinguishing, curtailing or enlarging the ordinary rights of set off, provided they do so expressly or by clear implication.
[39] Thus, in the absence of express words prohibiting a set off or an implication that a set off is prohibited by cl 69, there is no reason in principle why the Bulmers could not invoke a legitimate set off in response to a staged payment invoice under cl 6.2(C) of the contract. It also follows that if a legitimate set off can be relied upon to reduce or negate the sum claimed in a staged invoice, Envisage could not lawfully suspend work in response to a failure by the Bulmers to pay the entire sum claimed
in the staged invoice.
6 Gilbert-Ash (Northern) Limited v Modern Engineers (Bristol) Limited [1973] 3 All ER 195 (HL)
at 216.
7 Sir Anthony May “SetBack To Set Off” (2013) Society of Construction Law Paper 184 at 11 referring to Dawnays Ltd v FG Minter Ltd [1971] 2 All ER 1389 (EWCA) overruled by Gilbert- Ash, above n 6.
8 Grant v NZMC [1989] 1 NZLR 8 (CA).
9 At 12-13.
10 At 13 citing Gilbert-Ash, above n 6 at 723.
[40] This conclusion is entirely consistent with orthodox principles of statutory interpretation concerning what as reasonable and properly informed third party would consider the parties intended the words of their contract to mean.
… The court embodies that person. To be properly informed the court must be aware of the commercial or other context in which the contract was made and all of the facts and circumstances known to and likely to be operating on the parties’ minds.11
[41] Had Envisage included in an invoice for an earlier staged payment a demand for a significant amount of work which had not been completed, and had that earlier invoice been paid by the Bulmers, then, a properly informed Court would inevitably conclude that the Bulmers would be entitled to claim a set off for the work they had paid for but which was not completed when receiving a later staged invoice. In those circumstances, it would not be permissible for Envisage to rely on the suspension of work provision of cl 69 of the contract if the Bulmers continued to claim a set off in relation to the subsequent invoice.
[42] While I disagree with the way Judge Tompkins approached the law governing equitable set offs when interpreting cls 6.2(C) and cl 69 of the contract, this in itself is not sufficient to allow the first ground of appeal. The first ground of appeal can only succeed if I am satisfied that Envisage discharged the onus of establishing that there was no arguable factual basis for the Bulmers to claim a set off in response to
the 12th staged invoice. This requirement means that a careful assessment must be
made of the factual reasons relied upon the Bulmers when they refused to pay the
12th staged invoice, and their explanation for opposing summary judgment.
Slab edge insulation
[43] Slab edge insulation is material that is fixed to the exterior edge of the concrete pad upon which the house is constructed. The slab edge can remain exposed throughout the construction of the house. After insulation material is placed on the exposed edge, that material is usually coated with a plaster product and
painted, usually the same colour as the exterior cladding of the house.
11 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5; [2010] 2 NZLR 444 at [19].
[44] There is a dispute about what insulation material was to be applied to the edge of the slab and when the insulation was to be installed. The Bulmers say that Mr Henderson agreed to apply Texturite, an expensive product that would have cost about $8,500 plus GST. The Bulmers say Envisage agreed to apply the slab edge insulation “in the early stages of the building works”12. The issue was first raised on
12 April 2015 when the Bulmers sent an email to Mr Henderson to “check” the slab
edge insulation “[hadn’t] been missed” prior to receiving the stage payment invoice “(vi) all exterior wall linings and/ or veneers” on 19 April 2015. This dispute crystallised at the time of staged work invoice “(vii) all exterior decoration or coatings”.
[45] Mr Bulmer said he met with Mr Henderson on 28 April 2015. After debating whether or not staged work “(vi) all exterior wall linings and/or veneers” had been substantially completed without the slab edge insulation having been installed, Mr Bulmer said Mr Henderson agreed to contact Texturite to install their product and to determine if the slab edge insulation could be installed at the end of the construction work. On 28 April Mr Henderson sent an email to Mr Bulmer saying the slab edge insulation work could be done at any time and that he had asked Texturite “to proceed” and that this work would “be covered by upcoming progress payments”. Mr Bulmer said that Mr Henderson subsequently confirmed during the course of a discussion that Texturite slab edge insulation would be installed “on
25/29 May 2015”.13 To some extent this evidence is confirmed by an email by Mr
Bulmer to Mr Henderson on 25 May 2015 in which he asked: “… Texturite still on target for this week?” On 3 June 2015 Mr Henderson said in an email to Mr Bulmer that the installation of the slab edge insulation was weather dependent but that the work would have to be done that month so “that drains and concrete [could] follow in July”.
[46] By early June it was apparent that an issue was brewing over the installation of the slab edge insulation. Correspondence shows that when Envisage contacted Texturite, Envisage learnt that the cost of the Texturite product was significantly
higher than Envisage had allowed for in the final price of the contract. The
12 Affidavit of P Bulmer, 4 February 2016 at [18].
13 At [22].
difference was close to $5,000. Faced with this problem Envisage contacted another insulation supplier, Kool Foam, that could supply a product that would cost close to what Envisage had allowed for in the contract. On 16 June 2015 Envisage told the Bulmers that if they wanted Texturite to be installed then they would have to pay the additional cost of that product and that increased cost would “be added to the quotation/variation for sign off”. In making this statement Envisage pointed out that
$2,300 had been allowed for in the final contract price for slab edge insulation and clause 13.2 of the Specifications stated polystyrene edge insulation was to be applied but did not specify the product or specifications, for that insulation.
[47] Thus, by the time the 12th staged invoice was issued by Envisage there were unresolved issues concerning the installation of the slab edge insulation. Those issues were:
(1)When was the insulation to have been installed and had it been paid for at the time the Bulmers paid the invoice for stage “(vi) all exterior wall linings and/or veneers”. The Bulmers said it had been paid for. Envisage says this is not correct and that it would not have been paid for until it was installed.
(2)Had the parties agreed to a variation of the terms of the contract so that the more expensive Texturite slab insulation would be installed with the additional cost of the produce being paid for by the Bulmers? Or
(3)Had the parties agreed to the installation of the Texturite with the additional cost of that product being met by Envisage?
Attic stairs
[48] Mr Bulmer said in his affidavit in opposition to summary judgment that Envisage agreed two attic stairs would be installed but were mistakenly omitted from the specification. Mr Bulmer said it had been agreed these stairs would be installed by 22 May 2015. It appears the attic stairs arrived on site on 16 June. By the time
the 12th staged invoice had been sent there appears to have been a dispute about
whether the attic stairs were an agreed variation to the contract or whether those stairs were included in the contract price.
Laundry cabinetry
[49] The Bulmers said in their affidavit in opposition to summary judgment that the contract price covered the cost of installing laundry cabinetry. Envisage maintained that the cost of installing the laundry cabinetry and related items was covered by the provisional cost sum for laundry cabinetry and was to be paid directly by the Bulmers.
Appliances
[50] In his letter of 15 June 2015 to Envisage Mr Bulmer claimed an “allowance” for appliances for $10,700. Mr Henderson responded the next day saying he had, that day, picked up the range hood and explained the other appliances were not required on site until the electrician and plumber were available to install those items.
Doors
[51] By the time the 12th staged invoice had been issued Envisage had not installed the front door so as to ensure that it was not damaged during the construction process. The Bulmers say that the garage door had also not been installed by 16 June and that as they had paid for these items in earlier invoices they were entitled to set off the cost of these items in the 12th staged invoice.
Completed painting
[52] Although Mr Bulmer refers to interior painting not having been completed at the time the 12th staged invoice was rendered, I can find no contemporary records to support this claim. It is also not a matter that was referred to by counsel or Judge Tompkins.
Assessment
[53] In assessing this evidence in the context of a summary judgment application Judge Tompkins was required to take a “common sense” approach14 and decide if there was a genuine relevant conflict in the facts. He was entitled to reject spurious defences or plainly contrived factual conflicts and he was not required to accept uncritically every statement put forward.15 Bearing in mind it was for Envisage to demonstrate that there was no arguable defence, Judge Tompkins had to be left with no real doubt or uncertainty about the facts.16
[54] The evidence before Judge Tompkins clearly showed that there were at least three factual disputes about the slab edge insulation authority the time the 12th staged invoice was rendered. Those three factual issues are summarised in para [47] of this judgment. They constituted a reasonably arguable equitable set off that calls into question Envisage’s demand. In my view this was a dispute that needed to be assessed and determined in the traditional way. It was not a dispute that was amenable to summary judgment. The resolution of that dispute in favour of the Bulmers may have led to the conclusion that they were entitled to withhold whatever
sum was appropriate for the slab edge insulation.
[55] The remaining issues raised by the Bulmers under the heading of set off / abatement were able to be resolved in an appropriately robust way in favour of Envisage in the summary judgment hearing. I will quickly summarise my reasons for reaching this conclusion.
[56] Absent documentary evidence to support the Bulmers’ claims, Judge Tompkins would have been entitled to conclude that the two attic stairs were not included in the contract and could not constitute a legitimate set off. The Bulmers’ claims concerning laundry cabinetry related to a later stage in the construction contract, namely stage (xiii). It was premature of the Bulmers to withhold payment of those items when they did. The reasons for not installing the front door were fully
explained by Mr Henderson and the garage door appears to have been installed very
14 Haines v Carter [2001] 2 NZLR 167 (CA) at [97].
15 Attorney-General v Rakiura Holdings Ltd (1986) 1 PRNZ 12 (HC).
16 Pemberton v Chappell [1987] 1 NZLR 1 (CA).
soon after the Bulmers sent their letter of 15 June. The appliances did not need to be delivered at the time of the 12th staged invoice. The allowance claimed by the Bulmers for appliances was not therefore a genuine set off. In the absence of further explanation or evidence Judge Tompkins was entitled to put aside the claims by the Bulmers about incomplete internal painting. In any event, those allegations could not form the basis of a legitimate set off. In summary, the only matter that may have
constituted a legitimate set off and which was not resolved concerned the slab edge insulation.
[57] Having concluded there was a genuine dispute about the slab edge insulation it follows that I must conclude Judge Tompkins erred when he concluded the Bulmers repudiated the contract and with his conclusion that Envisage was justified in suspending work when it did. This in turn leads to the conclusion that summary judgment in favour of Envisage must be set aside. The legitimacy or otherwise of the Bulmers’ set off claim in relation to the slab edge insulation will need now to be determined in the ordinary way in the District Court.
Second ground of appeal
[58] The Bulmers’ counterclaim regarding refunds for provisional sums paid by
the Bulmers requires discrete consideration.
[59] In this particular contract there were a high proportion of provisional sums which appear to have totalled $145,495. By the time the dispute crystallised in mid- June 2015 a number of provisional cost sums had been removed from the contract by agreement. However, by this time, a number of the provisional contract items had still to be delivered. An example of such items was “fashion plumbing” meaning taps and mixers and other plumbing items that are readily visible. It is part of the Bulmers case that they prepaid for a lot of the provisional costs prior to Envisage suspending work and the termination of the contract. The Bulmers say that having paid for those items they are now entitled to be repaid for the items that they did not receive from Envisage. The Bulmers also referred in their counterclaim to the cost of engaging other contractors to complete the works.
[60] Envisage and Judge Tompkins took the view that there was no validity to the counterclaim or the Bulmers’ other defences to summary judgment because it was the Bulmers who repudiated the contract and they could not complain about any losses they may have suffered through their own default.
[61] My conclusion that the Bulmers did not repudiate the contract means Judge Tompkins reasons for summarily dismissing the Bulmers’ counterclaim or other defences can no longer stand.
[62] The dispute involving the counterclaims involves sums of money which, are significant for the parties and involve factual disputes and questions of law which need to be properly tested and evaluated. Ultimately that process may vindicate the stance taken by Envisage. The issues raised by the Bulmers’ counterclaim are not however amenable to summary judgment and must be considered by a District Court Judge in the usual way.
Third ground of appeal
[63] It will be apparent from the way in which I have determined the first two grounds of appeal that I am satisfied that there were factual issues involved in this dispute which rendered the dispute inappropriate for resolution by way of summary judgment.
Conclusion
[64] The summary judgment in favour of Envisage is set aside.
[65] The summary judgment dismissing the Bulmers’ counterclaim is set aside.
[66] I direct this matter be referred back to the District Court for timetabling to allow the hearing of the claim and counterclaim to be conducted in the normal manner.
[67] The Bulmers have succeeded in this Court and are entitled to costs on a scale
2B basis.
D B Collins J
Solicitors:
Gibson Sheat, Wellington
Thomas Dewar Sziranyi Letts, Lower Hutt
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