G K Shaw Limited v Green - [2023] NZHC 605

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-404-2385

[2023] NZHC 605

BETWEEN
G K SHAW LIMITED

Applicant

AND

JOHN GREEN

First Respondent

AND

CENTREPORT LIMITED

Second Respondent

Hearing:
3 October 2022; further submissions received 18 and

25 October 2022

Counsel:

K A Badcock, K S L Badcock and L A L Badcock for Applicant No appearance for First Respondent

B M Cash for Second Respondent

Judgment:

24 March 2023

JUDGMENT OF ISAC J

[Application for judicial review]

Introduction and the issues

[1] The Construction Contracts Act 2002 (CCA) established a summary adjudication process for the determination of disputes arising in construction contracts.1 Its purpose was to enable the swift and inexpensive resolution of disputes, ensure regular and timely payments between parties to construction contracts and minimise delays in construction.2 An adjudication determination is binding on and enforceable by the parties, at least on an interim basis, until it is overtaken by a

1 Haskell Construction Ltd v Ashcroft [2020] NZHC 772, [2020] 3 NZLR 113 at [4].
2 Construction Contracts Act 2002, s 3; and Patel v Pearson Group Ltd HC Wellington CIV-2008- 485-2571, 24 April 2009 at [39] and [45].

G K SHAW LTD v JOHN GREEN & ANOR [2023] NZHC 605 [24 March 2023]

judgment of the court, an arbitration decision or a settlement agreement.3 For this reason the CCA has been described as a “pay now, argue later” regime.4

[2] This case raises a question about the jurisdiction of adjudicators under the Act. At its heart is s 48, which requires an adjudicator to determine two types of claim. First, under s 48(1)(a), an adjudicator must determine whether a party is liable “to make a payment under” a construction contract. Second, under s 48(1)(b), an adjudicator must determine any questions in dispute “about the rights and obligations of the parties under that contract”.

[3] G K Shaw Limited is a civil contracting company. In April 2019, it entered into a construction contract with CentrePort Limited for the replacement of wharf fenders at the Seaview Wharf in Petone, Wellington.

[4] On 2 October 2019, an incident occurred during the construction of the wharf. The applicant’s trawler crane was used beyond its operational limits and this caused the crane to topple over into the sea. At the time, the crane was being operated by an unsupervised trainee who was lucky to escape without serious injury.

[5] The accident ultimately led CentrePort to cancel the contract. G K Shaw considered there was no lawful basis for CentrePort to do so, and that CentrePort’s purported cancellation was itself an unlawful repudiation. It then commenced an adjudication process under s 48(1)(a) of the CCA—claiming CentrePort was liable to make a payment “under the contract”—and seeking significant damages for breach. In a subsequent determination, the adjudicator, Mr Robert Fisher KC, concluded that he did not have jurisdiction under s 48(1)(a) to grant the relief sought.5 But having made that finding, he…

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: [2023] NZHC 605
Decision Date: 24 March 2023

CaseChat Overview and Summary

G K Shaw Limited, a civil contracting company, entered into a construction contract with CentrePort Limited for the replacement of wharf fenders at the Seaview Wharf in Petone, Wellington. Following an incident during the construction, CentrePort cancelled the contract, which G K Shaw considered unlawful. It initiated an adjudication process under the Construction Contracts Act 2002, claiming CentrePort was liable to make a payment "under the contract" and seeking significant damages for breach. The adjudicator, Mr Robert Fisher KC, found he lacked jurisdiction under s 48(1)(a) to grant the relief sought, but dismissed the claim on its merits. G K Shaw then commenced a second adjudication process, this time seeking a determination of the parties’ "rights and obligations… under the contract". The second adjudicator, Mr John Green, found he lacked jurisdiction to determine the claim on the basis that Mr Fisher’s determination on the merits rendered the claim res judicata. G K Shaw now seeks judicial review of Mr Green’s determination.

The issues for determination were: (a) whether Mr Fisher’s decision amounted to a finding that he lacked any jurisdiction to determine the applicant’s claim or was it simply a finding that he did not have the jurisdiction to grant the form of relief sought; and (b) if it was the latter, and Mr Fisher considered he was able to determine the claim, was he correct to do so?

The court found that Mr Fisher’s determination, properly understood, was that he lacked jurisdiction under s 48(1)(a) to award the form of relief sought, but that in any event the claim must also fail on its merits whether under s 48(1)(a) or (1)(b). The court concluded that Mr Fisher considered he was able to determine the merits of the case, and there was no criticism of his approach. The result was that Mr Fisher’s substantive findings were binding on the parties, and Mr Green was correct to dismiss the second claim. The application for judicial review was dismissed. The court indicated that it would be inclined to award costs on a 2B basis in favour of CentrePort, but noted that the respondent may wish to be heard separately on the matter of costs.

Orders