Chappel v Swindells - [2018] NZHC 506

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-357

[2018] NZHC 506

IN THE MATTER of the Judicial Review Procedure Act 2016

IN THE MATTER

of the Construction Contracts

BETWEEN

MATTHEW CHAPPEL and CHERIE CHAPPEL

Applicants

AND

EDWARD SWINDELLS - ADJUDICATOR

First Respondent

AND

ANNEX CONSTRUCTION LIMITED

Second Respondent

Hearing: On the papers

Appearances:

KA Badcock for the Applicants First Respondent, self-represented

No appearance by the joint liquidators for the Second Respondent who have not taken any steps in the proceeding

Judgment:

22 March 2018

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 22 March 2018 at 3.00 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Chappel v Swindells [2018] NZHC 506 [22 March 2018]

[1] In this proceeding for judicial review of an adjudicator’s decision under the Construction Contracts Act 2002, the statement of claim and notice of proceeding were served on the adjudicator, Mr Swindells, by substituted service and he has since filed a memorandum saying that he does not oppose the proceedings and will abide the decision of the Court. He has not filed a defence.

[2] The second respondent (Annex) was served, on 18 December 2017, when the documents were left with a person at the registered address for service of the company as listed in the Companies Register.

[3] In the proceeding, the applicants seek an order quashing Mr Swindells’ determination on or about 9 November 2017, that the applicants were required to pay to Annex the sum of $50,737.10 including GST. The applicants had complied with the determination and paid Annex the full amount ordered. The relief sought includes an order that Annex should repay to the applicants all moneys paid by them as a result of the determination, and indemnity costs.

[4]The applicants allege in the statement of claim that:

13.The procedures and processes adopted by the Adjudicator during the CCA Adjudication were procedurally wrong, unfair, not compliant with law, not consistent with principles of natural justice, and therefore biased against the applicant [sic].

14.The procedures and processes adopted by the second respondent [Annex] during the CCA Adjudication were procedurally wrong, unfair, not compliant with law, not consistent with principles of natural justice, and therefore biased against the applicant [sic].

Twelve separate causes of action or particulars of improper conduct are alleged. The relief sought includes an order that Annex should repay to the applicants all moneys paid by them as a result of the determination, and indemnity costs.

[5] When the matter was called in a Duty Judge List before Hinton J on 14 February 2018, the Judge issued a Minute setting the matter down for listing on Wednesday, 21 March 2018. The Judge said:

If the respondents intend to defend the proceeding, they will need to ensure that statements of defence are filed before then.

[6] The liquidators have told Mr Badcock, the lawyer for the applicants, that they do not consent to a continuation of the…

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.

Continue reading Chappel v Swindells

Details

AGLC: Chappel v Swindells [2018] NZHC 506
Case: [2018] NZHC 506
Decision Date: 22 March 2018

CaseChat Overview and Summary

The High Court of New Zealand, Hamilton Registry, was tasked with considering a judicial review application brought by Matthew and Cherie Chappel against Edward Swindells, the adjudicator, and Annex Construction Limited, now in liquidation. The Chappels sought to quash an adjudicator's determination under the Construction Contracts Act 2002 that they pay Annex Construction Limited the sum of $50,737.10 plus GST. They alleged procedural errors, unfairness, and a lack of compliance with legal principles during the adjudication process. The applicants sought repayment of the amount paid, along with indemnity costs. The adjudicator did not oppose the proceedings, and Annex Construction Limited, now in liquidation, had not taken any steps in the proceeding.

The primary legal issues revolved around whether the applicants could continue the judicial review against Annex Construction Limited, now in liquidation, under section 248 of the Companies Act 1993. This section generally prohibits legal proceedings against a company in liquidation unless the liquidator consents or the court orders otherwise. The applicants needed to demonstrate that their claim was not futile and that continuing the proceeding would not unfairly advantage any creditor or dissipate the company's assets in wasteful litigation.

The Court considered the principles outlined in relevant case law, focusing on the need for equality among creditors, the avoidance of wasteful litigation, and the appropriateness of allowing the claim to proceed in civil proceedings rather than through the liquidation process. The Court was satisfied that the applicants had acted promptly, the claim was not clearly unsustainable, and there was no evidence that the liquidation was a mere coincidence or an attempt to frustrate the applicants' claim. The Court also noted that the liquidation provided an opportunity for all creditors to access the disputed funds. Consequently, the Court granted the application to continue the judicial review against Annex Construction Limited, now in liquidation, to establish the applicants' status as unsecured creditors.

The final orders included granting leave to the applicants to continue the judicial review against Annex Construction Limited, now in liquidation, and reserving costs on the application. The matter was to be listed for mention to monitor progress. The applicants were directed to send a copy of the judgment to the adjudicator and the joint liquidators of Annex Construction Limited.

Orders