Jade Residential Limited v Paul - [2020] NZCA 477

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA344/2019
[2020] NZCA 477

BETWEEN	JADE RESIDENTIAL LIMITED Appellant
AND	MURRAY PAUL and MARIE PAUL Respondents

Hearing:	18 June 2020
Court:	Goddard, Ellis and Katz JJ
Counsel:	M B Lawson and J D Cameron for Appellant K A Lomas for Respondents
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

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: [2020] NZCA 477
Decision Date: 8 October 2020 at 11.00 am

CaseChat Overview and Summary

Jade Residential Limited appealed to the Court of Appeal against the decision of the High Court in the New Zealand Court of Appeal. The appeal was concerned with the construction of a contract between Jade and the Pauls. The Pauls cancelled the contract and Jade sought to enforce it. The High Court found that the Pauls were entitled to cancel the contract because Jade had repudiated the contract by suspending work on the site and refusing to return to work unless the Pauls paid significant sums to which Jade was not entitled. The Court of Appeal dismissed the appeal and upheld the decision of the High Court. The Court of Appeal found that Jade had repudiated the contract because it had suspended work when it was not contractually entitled to do so and had refused to return to work unless the Pauls paid significant sums to which Jade was not entitled. The repudiation was serious enough to entitle the Pauls to cancel the contract. The appeal was dismissed.

Orders