| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA344/2019 [2020] NZCA 477 |
| BETWEEN | JADE RESIDENTIAL LIMITED |
| AND | MURRAY PAUL and MARIE PAUL |
| Hearing: | 18 June 2020 |
Court: | Goddard, Ellis and Katz JJ |
Counsel: | M B Lawson and J D Cameron for Appellant |
Judgment: | 8 October 2020 at 11.00 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe appellant must pay the respondents costs for a standard appeal on a band A basis, with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Katz J)
Introduction
Jade Residential Ltd (Jade) is a building contractor. In April 2015, Jade entered into a contract to build a house for Murray and Marie Paul (the Pauls). The contract price was to be paid in instalments linked to the completion of various construction milestones.
A dispute arose between Jade and the Pauls as to whether two of the construction milestones, the closed-in milestone and the lined milestone, had been met. (It is common ground on appeal that those milestones had not been met, contrary to Jade’s assertions at the time.) The Pauls refused to make the payments for those milestones until the required work had been completed. Jade responded by suspending work on the site. When Jade refused to return to work by the deadline set by the Pauls, the Pauls cancelled the contract.
Jade issued proceedings in the District Court, alleging that the contract had not been validly cancelled. Judge Rea held that the Pauls had not been entitled to cancel the contract, as they were required to follow the dispute resolution process set out in the contract prior to exercising their right of cancellation.[1]
[1]Jade Residential Ltd v Paul [2018] NZDC 5673 [District Court judgment] at [55]–[56].
The Pauls appealed to the High Court. Grice J allowed their appeal.[2] Amongst other things, she held that the dispute resolution clause was not a bar to cancellation of the contract, and that the Pauls had validly cancelled the contract.[3] Jade sought leave from the High Court to bring an appeal to this Court, but leave was declined.[4]
[2]Paul v Jade Residential Ltd [2019] NZHC 304 [High Court judgment].
[3]At [54]–[57] and [68].
[4]Jade Residential Ltd v Paul [2019] NZHC 1484 [High Court leave judgment] at [61].
Subsequently, this Court granted leave to Jade to bring a second appeal challenging both of those findings.[5] The approved questions on appeal are:
(a)Did the High Court err in finding that the dispute resolution clause, cl 27, did not “purport to bar anything other than the issue of court or arbitral proceedings” and did not bar or delay “the other rights of the parties under the contract”, including a right to cancel?
(b)Did the High Court err in holding that the Pauls were entitled to, and did validly, cancel the contract because Jade’s suspension of, and failure to return to, work on the contract site constituted a repudiation of the contract?
Facts
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- Case
- [2020] NZCA 477
- Decision Date
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