Hamilton Ice Arena Ltd v Perry Developments Ltd - [2001] NZCA 308

IN THE COURT OF APPEAL OF NEW ZEALAND

CA251/99

BETWEEN	HAMILTON ICE ARENA LIMITED
First Appellant

AND	GORDON ALEXANDER SPEIRS, HUGH MICHAEL SPEIRS AND MARIE NOVENE SPEIRS
Second Appellants

AND	GORDON ALEXANDER SPEIRS AND HIGH MICHAEL SPEIRS
Third Appellants

AND	PERRY DEVELOPMENTS LIMITED
First Respondent

AND	PERRY PROPERTIES LIMITED
Second Respondent

AND	JOHN HAROLD GAUKRODGER AND GRAEME ROBERT FINCH
Third Respondents

AND	FRANKTON ICE SKATING LIMITED
Fourth Respondent

Hearing:	21 and 22 August 2001
Coram:	Tipping J Doogue J William Young J
Appearances:	R T Wilson and A J Robinson for Appellants M A MacLennan and N A Moreau for Respondents
Judgment:	10 September 2001

JUDGMENT OF THE COURT DELIVERED BY TIPPING J

Introduction

The principal issue in this appeal from Penlington J concerns equitable set-off. In January 1993 the first appellant, Hamilton Ice Arena Limited (Hamilton Ice) was in arrears with the rent it owed to the first respondent, Perry Developments Ltd (Perry) in relation to ice skating premises in Hamilton. At the same time Perry owed money to Gordon and Hugh Speirs who were the shareholders and directors of Hamilton Ice. This money was owned for work which the Speirs brothers had done for Perry in relation to a ten pin bowling arena at Panmure in Auckland. Perry re-entered the ice skating premises in Hamilton and forfeited Hamilton Ice’s lease on account of its failure to pay the rent. Hamilton Ice claimed that the re-entry and forfeiture were unlawful because of the claim which its shareholders and directors, the Speirs brothers had against Perry for wages. Its assertion was that this claim constituted an equitable set-off exceeding the arrears of rent and thus extinguishing Hamilton Ice’s liability for rent.
As there was, on this hypothesis, no rent owing, Perry’s conduct in re-entering and forfeiting the lease was, so Hamilton Ice contends, unlawful and amounted to trespass for which damages were payable. Perry denied Hamilton Ice’s ability to set-off the wages which it owed the Speirs brothers. It said that no equitable set-off arose, first because the parties on each side of the claim and cross-claim were not the same, and second because the claims were not sufficiently related to give rise to any rights of equitable set-off. Perry further argued that even if a right of equitable set-off existed, it amounted only to a defence to the claim for rent and gave rise to no cause of action for damages on account of trespass or otherwise. On the view we take of the first two points, the last does not arise and we will therefore say nothing more about it.

Equitable set-off – general principles

Before examining the facts of the present case, we will identify the general principles which apply to equitable set-off. A set-off is a right vested in a defendant facing a money claim by a plaintiff to use its own money claim against the plaintiff to absolve itself wholly or partially from its obligation to the plaintiff. A set-off is different from a counter…

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 Hamilton Ice Arena Ltd v Perry Developments Ltd

Details

AGLC: Hamilton Ice Arena Ltd v Perry Developments Ltd [2001] NZCA 308
Case: [2001] NZCA 308
Decision Date: 10 September 2001

CaseChat Overview and Summary

In the New Zealand Court of Appeal, Hamilton Ice Arena Limited, Gordon and Hugh Speirs, and Perry Developments Limited were involved in a dispute over equitable set-off and the performance bonus. The appeal was heard by Tipping J, Doogue J, and William Young J. The appellants argued that the set-off of wages owed by Perry Developments to the Speirs brothers against the rent owed by Hamilton Ice to Perry should be allowed. The respondents argued that the parties were not the same on either side of the cross-claims and that there was no sufficient inter-dependence between the obligations on either side. The court held that the lack of identity of parties was fatal to Hamilton Ice's claim to set-off the money owed by Perry to the Speirs brothers against the money owed by Hamilton Ice to Perry for rent. The court also held that the Speirs brothers were entitled to the sum of $25,000 as consideration for their work under the refurbishment contract, regardless of whether they completed the work by the stipulated date. The court allowed the appeal by Gordon and Hugh Speirs in relation to the performance bonus and ordered Perry to pay the Speirs brothers $25,000 under that head. The appeal by Hamilton Ice in relation to the equitable set-off point failed and was dismissed. The case was remitted to the High Court to resolve all necessary matters consequential on the allowance of the Speirs brothers' appeal on the $25,000 issue. There was no order for costs on the appeal as each side had succeeded in part and failed in part.

Orders