MDS Developments Limited v Appleby Holdings Limited - [2015] NZHC 2145

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1109 [2015] NZHC 2145

BETWEEN
MDS DEVELOPMENTS LIMITED

Applicant

AND

APPLEBY HOLDINGS LIMITED Respondent

Hearing: 25 August 2015

Appearances:

Mr J Turner for Applicant
Mr M Heard and Ms L Clews for Respondents

Judgment:

4 September 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
04.09.15 at 4 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

MDS DEVELOPMENTS LIMITED v APPLEBY HOLDINGS LIMITED [2015] NZHC 2145 [4 September
2015]

[1] The respondent was the developer of the property at Albany at St Andrews Way. The development offered either bare sections to buyers or what were described as “house and section packages”, as Mr Heard put it. The design of the subdivision was carried out by MDS Design Limited. The actual construction work was principally carried out by a company associated with a third person, Mr Murphy. That company was Murphy Property Development Limited (“MPDL”). Mr Murphy was also a director of the principal, the respondent. The other director of the respondent was Mr Kendrick.

[2] The principals of these three corporate entities or groups appeared to work together cooperatively at least at the outset. In addition to providing design services, Mr Wilsons other company, the applicant, agreed to purchase Lot 18 upon which there was to be constructed a residence. I understand that the involvement of the applicant was of an investment type and it was intended that the property be on-sold. The respondent owned Lot 19, the adjoining property, to Lot 18.

[3] It was the intention of the three corporate entities/groups that there would be profit sharing on completion of the subdivision. However, I understand that the party who had overall responsibility for initiating and coordinating the development was to be the respondent who would obtain the necessary consents and take other steps to get the subdivision underway.

[4] The development involved the construction of a retaining wall on the boundary of some of the properties comprising the subdivision including, Lot 18 and
19. MPDL began work on the retaining wall and in the mid-point of 2014 work had progressed to the point where it was ready to continue construction on Lot 18, the property of the applicant.

[5] There was a discussion between Mr Wilson of the applicant and Mr Murphy of MPDL about the commencement of the work and about access for that purpose. Mr Wilson agreed to MPDL coming onto Lot 18 for the purposes of constructing the wall.

[6] As well as construction of the retaining wall, a fence was to be built between Lot 18 and 19. There was no dispute on the part of the applicant that it expected to pay one half of the cost of this fence.

[7] The parties have not been able to resolve the dispute and matters came to a head when the respondent served a statutory demand on the applicant dated 5 May
2015. The…

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 2145
Decision Date: 4 September 2015

CaseChat Overview and Summary

The case between MDS Developments Limited and Appleby Holdings Limited revolves around a dispute over a statutory demand, which the respondent served on the applicant in May 2015. The respondent claims that the applicant owes them money for services rendered, specifically for the construction of a retaining wall on Lot 18. The applicant, on the other hand, disputes this claim, arguing that it had a separate agreement with another party, Murphy Property Development Limited (MPDL), for the construction work. The primary issue before the court was whether there was a substantial dispute concerning whether the applicant owed the respondent the amount claimed.

The court had to determine if the applicant could assert a fairly arguable basis for not being liable for the amount claimed. It also had to consider whether the applicant entered into a contract relating to the construction of the retaining wall with the respondent or another party, MPDL, and if the contract, if any, was a construction contract under the Construction Contracts Act 2002. The court examined the arguments presented by both parties, including the evidence of the exchange of texts between the representatives of the applicant and the respondent, which suggested that the respondent would invoice the applicant for the construction work.

The court found that there was a substantial dispute as to whether the applicant owed any amount to the respondent, given the arguments presented by both parties and the lack of clear evidence pointing to a definitive contractual arrangement. The court concluded that it was not open to it to resolve the dispute and that the matter required a trial to determine the contractual intentions of the parties. Therefore, the court granted the application to set aside the statutory demand. The parties were directed to confer on the issue of costs, with the possibility of the court making a ruling if they were unable to reach an agreement.

Orders