ICL Construction (2016) Limited v Ian Roebuck Crane Hire Limited
[2023] NZCA 364
•14 August 2023 at 11 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA66/2023 [2023] NZCA 364 |
| BETWEEN | ICL CONSTRUCTION (2016) LIMITED |
| AND | IAN ROEBUCK CRANE HIRE LIMITED |
| Court: | Courtney and Mallon JJ |
Counsel: | G R Grant and T J Rainey for Applicant |
Judgment: | 14 August 2023 at 11 am |
JUDGMENT OF THE COURT
A The application for leave to appeal is declined.
BThe applicant must pay costs to the respondent for a standard application on a band A basis with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Mallon J)
Background
The applicant (ICL) is a construction company. The respondent (Roebuck) is a crane hiring company. ICL and Roebuck entered into an agreement in 2017 under which Roebuck provided its services for a construction project ICL was undertaking. At some point ICL stopped paying regular invoices for the use of Roebuck’s cranes and a dispute arose over what had been agreed about the price ICL would pay.
Roebuck issued proceedings seeking judgment for $64,098 plus interest and costs. Roebuck’s position was that the agreement was that ICL would have a 100 t crane on site, be charged only for the hours it was used and at the rate applicable for the size of the crane needed for the job, and with a ten per cent discount. ICL contended there was a maximum price or estimate for the job of $215,000 and no hourly rates were discussed or agreed. Roebuck’s proceeding claimed the difference between the total invoiced to ICL and the claimed maximum price of $215,000.
By the agreement of the parties, the claim proceeded to a liability only hearing in the District Court before Judge Greig. This had followed discussions between them culminating in correspondence shortly before the hearing. In that correspondence, ICL’s counsel advised Roebuck’s counsel that, once the liability issue was resolved, the actual quantum would become “virtually academic” and to ask the Court to determine quantum “would be hugely uneconomic”.
The Judge found in favour of Roebuck on liability.[1] ICL subsequently briefed witnesses on quantum to seek to challenge quantum at a further hearing on an invoice by invoice basis of which there were a large number. The Judge struck out the briefs as they contested quantum on a basis that had not been pleaded and that was contrary to the basis on which ICL had contested liability.[2]
[1]Ian Roebuck Crane Hire Ltd v ICL Construction (2016) Ltd [2021] NZDC 16806 [District Court liability decision].
[2]Ian Roebuck Crane Hire Ltd v ICL Construction (2016) Ltd [2022] NZDC 1576 [District Court evidence decision].
The Judge also considered it would be prejudicial to Roebuck to allow ICL to proceed with this challenge to quantum.[3] That was because Roebuck would have difficulties in locating the crane operator and asking him to recall details of each and every time the crane was used over four years ago.[4] Further, if quantum was to have been challenged, it would have been far more economic to have one hearing on liability and quantum or Roebuck might have opted for arbitration.[5] Roebuck had already incurred costs of $30,000 in the litigation and those costs could double if it was required to respond to this challenge.[6]
[3]At [42].
[4]At [43].
[5]At [42] and [44].
[6]At [45].
The Judge also ordered an interim payment of $60,000 to Roebuck, plus costs on a 2B basis and interest.[7] This was close to the amount ($65,860.53) the parties discussed before the liability hearing as the difference between the amount ICL had paid (on its claim as to what they had agreed) and the amount Roebuck had invoiced (less a credit for some damage to concrete caused by Roebuck). The $60,000 awarded was intended by the Judge to represent a reasonable proportion of the damages Roebuck was likely to recover.[8]
[7]At [53]-[56].
[8]At [54].
Roebuck elected not to proceed with progressing the quantum hearing, issued a statutory demand for the $60,000 award and subsequently filed liquidation proceedings against ICL. ICL appealed the Judge’s decision striking out the briefs of evidence and ordering the $60,000 interim payment. It also applied for a stay of execution of judgment which was refused by the High Court.[9]
[9]ICL Construction (2016) Ltd v Ian Roebuck Crane Hire Ltd [2022] NZHC 1047 [High Court stay decision].
On appeal to the High Court, Churchman J dismissed the appeal, finding that striking out the evidence was correct,[10] that barring ICL from raising the unpleaded quantum defence was permissible and appropriate,[11] and that awarding the interim payment, interest, and costs was appropriate.[12] ICL then applied to the High Court for leave to appeal against Churchman J’s decision. That application was declined.[13]
Application for leave to appeal
[10]ICL Construction (2016) Ltd v Ian Roebuck Crane Hire Ltd [2022] NZHC2899 [High Court appeal decision] at [39]–[43].
[11]At [44]–[48].
[12]At [49]–[59].
[13]ICL Construction (2016) Ltd v Ian Roebuck Crane Hire Ltd [2022] NZHC 3440 [High Court leave decision].
Leave to appeal is now sought from this Court.[14] To be granted leave, the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.[15]
[14]Senior Courts Act 2016, s 60(2)(b).
[15]Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
The key argument for ICL is that the District Court was wrong to strike out its briefs of evidence when its statement of defence had denied quantum, it had not agreed to limit its defence to the quantum, Roebuck had the burden of proof on quantum and rule 1.8 of the District Court Rules 2014 (the Rules) did not provide a basis to strike out the briefs. We are satisfied this does not meet the test for leave.
We consider the question of whether it was not open to Judge Greig to strike out the briefs is a question that is not capable of bona fide and serious argument. Rule 1.8(2) applies if there is a failure to comply with the Rules. It permits the Court to set aside any step taken in the proceeding and to make any order dealing with the proceeding generally as it thinks just. The failure relied on was that of failing to plead particulars of a defence as required by r 5.50. The Judge’s approach under r 1.8(2) met the objective of r 1.3 to secure the just, speedy, and inexpensive determination of the proceeding.
To elaborate, a simple denial of the pleaded quantum did not give Roebuck fair notice that, if ICL was unsuccessful in its claim that no rates were discussed and there was an agreed maximum price for the work, it intended to contend in the alternative that there were a range errors in the invoices, including for example that the wrong crane tonnage rates had been used. This was particularly so when, in correspondence between counsel shortly before the liability hearing, these matters were not raised and instead it was signalled that any quantum issues would be minor and likely to be resolved informally. It was only after judgment was given on the liability hearing that ICL changed its position as to the basis on which it intended to contest quantum.
The notice of appeal also raised whether it was open to the Judge to make the award of $60,000. However, the submissions clarify that it accepts the order the Judge made was consequential on striking out the briefs of evidence, and the order is not challenged except to the extent that it would be set aside if ICL succeeds on an appeal concerning the r 1.8 issue.
This means that there is no question of law or fact capable of bona fide and serious argument. Even if there were, there is no public interest and the limited private interest in granting leave, given the small sum at issue and that this would be a second appeal, is not of sufficient importance to outweigh the cost and delay of a further appeal.
Result
The application for leave to appeal is declined.
The applicant must pay costs to the respondent for a standard application on a band A basis with usual disbursements.
Solicitors:
Grant & Co, Auckland for Applicant
Connect Legal Taranaki, New Plymouth for Respondent
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