Jamon Construction Ltd v Bricon Asbestos Ltd - [2015] NZHC 1926

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000320 [2015] NZHC 1926

BETWEEN
JAMON CONSTRUCTION LIMITED

Plaintiff

AND

BRICON ASBESTOS LIMITED Defendant

Hearing: 4 August 2015

Appearances:

D J C Russ for Plaintiff
M R Taylor for Defendant

Judgment:

13 August 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] On 11 May 2015 Bricon Asbestos Limited (Bricon) issued a demand to Jamon Construction Limited (Jamon) under s 289 of the Companies Act 1993, claiming indebtedness by Jamon in the sum of $342,922.56. Jamon applies to set aside the demand under s 290 of the Companies Act. Section 290 provides that the Court may grant an application to set aside a statutory demand if it is satisfied that there is a substantial dispute on whether or not the claimed debt is owing or is due, or if the company appears to have a counterclaim, set-off or cross-demand against the issuer of the notice. The Court may also set aside a statutory demand if it is satisfied that it ought to be set aside on “other grounds” which has been interpreted to give the Court a discretion, which must be exercised in a principled way taking
into account the statutory framework of which it is part.1

1 Commissioner of Inland Revenue v Chester Trustee Services Ltd [2003] 1 NZLR 395 (CA), per
Baragwanath J.

JAMON CONSTRUCTION LTD v BRICON ASBESTOS LTD [2015] NZHC 1926 [13 August 2015]

Background

[2] Jamon is a corporate trustee for the Jamon Trust. Its director says it has no assets and no liabilities, and is a non-trading entity. The Jamon Trust, however, carries on business as a demolition contractor.

[3] Bricon operates as an asbestos removal contractor. Since the earthquakes which struck Christchurch in 2010 and 2011, it has operated in this city removing asbestos from buildings scheduled for demolition. A significant amount of the demolition of buildings which has taken place in the central city area of Christchurch has been required by the Canterbury Earthquake Recovery Authority (CERA) which has engaged demolition contractors for the task.

[4] In mid-2014 Mr Blackie, the director of Bricon, learned that a building at

21 Latimer Square, Christchurch was to be demolished by CERA. At that time CERA had approved a number of demolition contractors to undertake work it required to be done. As a specialist asbestos removal company, Bricon was not so approved. However, Mr Blackie knew Mr O’Neil, the director of Jamon, which was an approved contractor. He told him this demolition job was coming up. At first they discussed proceeding as a joint venture, but because Bricon was not an approved contractor, it was agreed that the Jamon Trust would submit a tender to CERA, and engage Bricon as a sub-contractor for the asbestos removal component of the demolition.

[5] Jamon was the successful tenderer. In its tender it submitted a breakdown which included the sum of $85,000 plus GST for Bricon’s work. The tender was accepted. Although Bricon accepts that it gave to Jamon an estimate…

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: [2015] NZHC 1926
Decision Date: 13 August 2015

CaseChat Overview and Summary

Jamon Construction Ltd brought an application to set aside a statutory demand issued by Bricon Asbestos Ltd under s 290 of the Companies Act 1993. The demand claimed indebtedness by Jamon in the sum of $342,922.56. The court had to decide whether Jamon had established a genuine and substantial dispute over the existence of the claimed debt. The court held that Jamon had established an arguable position that there was an agreed contract price for Bricon’s work, that the value of the construction work claimed by Bricon was not calculated with regard to it and that the progress payments claimed were not therefore calculated in the manner required by s 17(1) of the Construction Contracts Act 2002. Therefore, the statutory demand was set aside. The respondent would pay costs to the applicant.

Orders