L a & S M Moreton Family Trust v McLeod HC Invercargill CIV 2010-425-198

[2010] NZHC 1760

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2010-425-000198

BETWEEN  L A & S M MORETON FAMILY TRUST Appellant

ANDGREG MCLEOD First Respondent

ANDMARY GINN & ASSOCIATES Second Respondent

ANDINVERCARGILL CITY COUNCIL Third Respondent

ANDPLASTER SYSTEMS LIMITED Fourth Respondent

ANDDWAYNE CRACKNELL Fifth Respondent

ANDCONTRACTORS BONDING LIMITED Sixth Respondent

Hearing:         (On Papers)

Counsel:         R T Chapman for Appellant

C J Frame for Third Respondent
R P Coltman for Sixth Respondent

Judgment:      6 October 2010

JUDGMENT OF FOGARTY J

Introduction

[1]      The Invercargill City Council (third respondent) and Contractors Bonding Limited (sixth respondent) have protested the hearing of an appeal by the Moreton family (the appellants) against a determination of the Weathertight Homes Tribunal

on 29 March 2010.

MORETON FAMILY TRUST V MCLEOD AND ORS HC INV CIV-2010-425-000198  6 October 2010

[2]      The fifth and eighth respondents contend that this appeal should have been filed in the District Court and that the High Court has no jurisdiction to hear it.  They argue this is so because the total amount of the claim is $175,995.38 and so does not exceed $200,000.   They contend that s 93 of the Weathertight Homes Resolution Services Act 2006 (which governs the dispute) has a clear meaning and purpose of insuring that when amounts at issue do not exceed $200,000, any appeals must always be determined by the District Court.  They rely upon a decision of this Court, Waipa District Council v Widdowson & Ors HC Auckland CIV-2004-419-001561,

27 January 2005, Harrison J.

The determination under appeal

[3]      The claimants and the respondents to the claim took part in a mediation conducted on 9 September 2009.  The outcome of that mediation was a conditional settlement between the  parties.   At a conference on 29 March 2010  before the Weathertight Homes Tribunal the Council and Contractors Bonding Limited sought to have against them terminated on the grounds that they had complied with their obligations under the settlement agreement.   This application was opposed by the claimant on the grounds that the other parties had not complied with the agreement and contended that as a consequence the agreement with all the parties was at an end. The tribunal reasoned:

I  make  no  comment  on  the  effect  of  the  mediated  agreement  on  the obligations of the other parties.  However, in an agreement which provides for several obligations those obligations can be met and the terms of the agreement satisfied.

Decision

The Invercargill City Council and Contractors Bonding Limited, having several obligations under the agreement and having met those obligations by the payment of the amounts agreed have discharged their liability under this claim.

The claim against them is therefore dismissed.

The appeal

[4]      The appellant filed an appeal in the High Court, Invercargill Registry, against the dismissal of the claim against the Council and Contractors Bonding Limited, now called the third and sixth respondents (due to the uncontested removal of some other original respondents).  The appeal seeks an order quashing the determination of the Tribunal dismissing the claim.  The consequence of that order would be to leave a claim against those two parties in place.  The issue to be determined on the appeal would be whether the Tribunal was correct in finding that because the Council and Contractors Bonding Limited had met their obligations under the conditional agreement they were entitled to be discharged from any liability under the claim.

The relevant provision of the Act

[5]      Section 93 of the Act provides:

93       Right of appeal

(1)A party to a claim that has been determined by the tribunal may appeal   on   a   question   of   law   or   fact   that   arises   from   the determination.

(2)      An appeal must be filed in—

(a)      the District Court if the amount at issue does not exceed

$200,000; and

(b)      the High Court if the amount at issue exceeds $200,000.

(3)For the purposes of subsection (2), the amount at issue in relation to a determination is—

(a)the amount  of any money required to  be  paid under the determination by the person filing the appeal (including any amount determined under section 90(2)); or

(b)       if the appeal relates to a determination in which the tribunal has declined to require payment of any amount of money (or money's worth in terms of section 90(2)) to a claimant, or has required payment of an amount of money (or money's worth in terms of section 90(2)) that is less than the amount claimed by the claimant, the amount claimed unsuccessfully by the claimant.

(4)A claimant may abandon so much of a claim to which an appeal relates as exceeds $200,000 in order to bring the appeal within the jurisdiction of the District Court.

(5)If an appeal is commenced by a person who is required to pay money to a party to a claim, the person may bring the appeal within the jurisdiction of the District Court by paying the other person the difference between the amount required to be paid under the determination and $200,000.

(6)Section 182 of the Building Act 2004 does not apply to an appeal under this section.

[6]      Subsection (2) clearly provides that an appeal must be filed in the District Court if the amount at issue does not exceed $200,000.  The amount at issue is, for the purposes of that section, defined in subs (3).   That subsection provides two alternative amounts at issue.   Sub-paragraph (a) does not apply here, as it is addressing the amount of money required to be paid by an appellant.  Sub-paragraph (b) is the paragraph that applies when the claimant is the appellant.  Harrison J, in Waipa, considered an identical provision, then s 44(3)(b) of the Weathertight Homes Resolution  Services  Act  2002.    He  interpreted  sub-paragraph  (b)  as  governing appeals by plaintiff or claimants where the amount at issue is defined by either the amount of a totally unsuccessful claim, one that is effectively dismissed, or the “amount” of the shortfall between what is claimed and awarded ([7]).

[7]      The determination of the Tribunal is not the sort of determination expressly contemplated in sub-paragraph (b).   The Tribunal dismissed the claim against the Council  and  Contractors  Bonding  Limited  on  the  basis  that  they had  met  their obligations   under   the   settlement   agreement.      It   followed   that   that   was   a determination in which the Tribunal has declined to require the payment of any money to the claimant.   The fact that money may have been paid following the mediation, I do not know, is in my view beside the point in applying sub-paragraph (b).  I approach sub-paragraph (b) in this case as applying in its first limb.

[8]      The argument in opposition to the protest to jurisdiction is two-fold:

i)That s 93(3) only relates to a determination when the final amount of the amount claimed by the claimant is known and has been adjudicated upon.

ii)That the appellant considers that the claim, when it is finally considered  by the  Tribunal,  will  be  in  excess  of  $200,000 rather than the amount at the time of the partial determination, which was based on the initial assessor’s report dated 12 May

2008 and amended on 10 June 2009.

[9]      Essentially this is an argument that s 93 cannot apply as the amount at issue cannot be determined until the substantive claim is adjudicated on.  There are two problems with that argument.  The first is that it is plain Parliament intended in s 93 to provide that litigation under the Act involving a sum of $200,000 or less be taken on appeal to the District Court and over that to the High Court.  It did not allow for any party to choose the High Court in preference to the District Court.  No doubt this was a purpose put in place to ensure that claimants who are likely to be private persons would not be exposed to the higher cost regimes of the High Court.  Section

93 leaves no room for a third category – appeals from the Tribunal where the amount at issue had not been established at the time of the dismissal of a claim.

[10]     Obviously the amount at issue can change in the course of a proceeding. There is an instance of it here.  But, the amount at issue is in my view a question of fact.  It is the amount in issue at the time of the determination which is the subject of appeal.    On  the  date  upon  which  the  Tribunal  dismissed  the  claim  against  the Council and Contractors Bonding Limited, it was less than $200,000.  For at the time the claim was dismissed the maximum sum being sought by the claimant against the respondents generally, on the pleadings, as distinct from the mediated settlement, was less than $200,000.

[11]    I conclude that the Council and Contractors Bonding Limited protest to jurisdiction is sound and the appeal must be struck out.  However, like Harrison J in Waipa, I note that the challenge was purely of a jurisdictional nature.  The Moreton family’s  appeal  was  simply filed  in  the  wrong Court.    I endorse  comments  by Harrison J at [11] of his judgment.

[12]     The successful respondents are entitled to costs.  The argument was presented by one counsel on their joint behalf.  The appellants shall pay costs of $1,128.00 to the third and sixth respondents jointly.

Solicitors:

Cruickshank Pryde, Invercargill, for Appellant (Counsel: R T Chapman) Heaney & Co, Auckland for third Respondent (Counsel: C J Frame)

Fortune Manning, Auckland, for sixth Respondent (Counsel: R P Coltman)