Clark v Central Lakes Homes Ltd - [2016] NZHC 1694

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-425-25 [2016] NZHC 1694

BETWEEN
PETER JOHN CLARK

Appellant

AND

CENTRAL LAKES HOMES LIMITED Respondent

Hearing: 6 July 2016

Appearances:

H C Matthews for Appellant
T M Braun and M Brady for Respondent

Judgment:

25 July 2016

JUDGMENT OF MANDER J

[1] The appellant, Mr Peter Clark, appeals the entry of summary judgment against him for a sum of money the Building Disputes Tribunal (the Tribunal) determined he owed to the respondent company, Central Lakes Homes Limited (CLH).

Background

[2] Mr Clark and CLH entered into a contract to build a residential dwelling on Mr Clark’s property situated in Queenstown. Relations between the parties irreconcilably broke down and the construction contract came to an end. The circumstances leading to the termination of the contract are in dispute. Mr Clark maintains the contract ended by way of mutual termination which included CLH’s agreement to leave the building site and allow an alternative contractor to continue construction work. CLH’s position is that Mr Clark instructed CLH to cease work, refused access to the property, and unilaterally engaged an alternative builder.

[3] CLH issued a notice under a clause of the contract advising that in the absence of Mr Clark vacating the building site CLH was permitted to terminate the

CLARK v CENTRAL LAKES HOMES LIMITED [2016] NZHC 1694 [25 July 2016]

contract. In such an event, CLH maintained it was entitled to recover certain costs, expenses and damages. The relevant clauses of the construction contract upon which it relied read as follows:

48The owner will be in breach of Contract if, without the prior written consent of the Registered Master Builder, the Owner takes possession of the building site and the Works prior to Practical Completion or prior to making payment in full of any amount due and owing to the Registered Master Builder. In such case, the Registered Master Builder may, by notice in writing, notify the Owner that it has two working days to vacate possession of the building site and Works.

49If the Owner does not vacate the building site and Works within two working days, the Registered Master Builder shall be entitled to terminate the Contract immediately. Upon termination under this clause:

(a) the owner must pay the Registered Master Builder all sums due and owing under the Contract, plus any damages, costs, expenses or loss of profit of the Registered Master Builder arising out of the termination of the Contract; and

(b) the Registered Master Builder shall have no further obligations to the Owner under the Contract.

Adjudication by the Building Disputes Tribunal

[4] The dispute was referred to the Tribunal for adjudication. CLH sought a determination that Mr Clarke was liable to pay the following sums:

(a) Work completed to the date of cancellation $39,588.80 (b) A royalty payment to Landmark Homes NZ Ltd $19,455.85 (c) Sales commission $13,752.99 (d) Loss of profit $40,317.00

[5] CLH acknowledged it had received payment of $35,163.50 from Mr Clark for…

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: [2016] NZHC 1694
Decision Date: 25 July 2016

CaseChat Overview and Summary

The appellant, Mr Peter Clark, appeals the entry of summary judgment against him by the District Court for a sum of money the Building Disputes Tribunal determined he owed to the respondent company, Central Lakes Homes Limited (CLH). The key legal issue was whether the adjudicator's determination was validly made under s 48(1)(a) of the Construction Contracts Act 2002, which would allow for enforcement by way of summary judgment under s 59. The Court held that the adjudicator's determination was validly made under s 48(1)(a), as the contract terms clearly provided for certain payments to be made by the owner in the event the builder terminated the contract. The distinction between damages under the contract and damages for breach of contract was recognised, and the liability for payment was held to arise under the contract itself. The Court also found that the presence of significant factual disputes between the parties did not prevent the entry of summary judgment, as the adjudicator's determination was binding on the parties and enforceable as a debt due. The appeal was dismissed, and the Court ordered the release of the funds held by the Registrar of the Queenstown District Court to CLH, together with interest and costs in the sum of $111,315.23.

Orders