Northlake Investments Limited v Civil Construction Limited
[2023] NZHC 2715
•28 September 2023
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2022-425-79
[2023] NZHC 2715
BETWEEN NORTHLAKE INVESTMENTS LIMITED
Plaintiff
AND
CIVIL CONSTRUCTION LIMITED
Defendant
Hearing: 28 August 2023 Appearances:
J D McBride and A W McDonald for Plaintiff B M Cash and V Bortsova for Defendant
Judgment:
28 September 2023
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 28 September 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
NORTHLAKE INVESTMENTS LTD v CIVIL CONSTRUCTION LTD [2023] NZHC 2715 [28 September 2023]
Table of Contents
Para No
Introduction [1] What happened
The contracts [7] The Covid Claim [11] The Stage 12 Claim [19] The adjudication [25] The final payment claim [32] Summary judgment principles – Northlake
[33]
Northlake’s pleading
[36]
Issue one – Was Civil required to dispute the engineer’s decisions under the dispute resolution provisions of NZS 3910:2013?
[38]
The Stage 12 Claim [40] The Covid Claim [44] Conclusion on issue one [47] Issue two – If Civil was required to dispute the engineer’s decisions, did it do so in the manner required?
Northlake’s position [48] Civil’s position [52] My analysis [62] Conclusion on issue two [69] Issue three – Was the adjudicator’s determination binding?
[70]
The Act [71] Northlake’s alternative positions [93] Conclusion of issue three [95] Issue four – Does Northlake have a claim for money had and received?
[96]
Conclusion on issue four [103] Summary judgment application and strike out principles – Civil
[104]
Issue five – Can the adjudicator’s determination now be challenged by Northlake?
[110]
Result
[114]
Introduction
[1] Northlake Investments Ltd (Northlake) and Civil Construction Ltd (Civil) entered into construction contracts for the performance of works by Civil at Northlake’s development at Wanaka. The engineer to the contracts disallowed certain payment claims by Civil, which Civil referred to adjudication under the Construction Contracts Act 2002 (the Act). An adjudicator issued a determination requiring Northlake to make payments to Civil in respect of the disputed claims. Northlake made payment whilst disputing its liability to do so.
[2] Northlake now seeks summary judgment against Civil to recover, as money had and received, the $591,040 it paid to Civil in respect to two of the disputed claims. It argues the adjudicator’s determination had “no effect” upon decisions made by the engineer disallowing Civil’s claims, and the decisions are “final and binding” because Civil did not refer them to the engineer or to adjudication as required by the conditions of contract within three months of the decisions being given.
[3] Civil resists summary judgment and makes its own application for summary judgment and to strike out Northlake’s claim. Civil argues the engineer’s decisions never became final and binding because it was not required to dispute them, but that it did so in time in any event. Even if that was not the case, Civil says it was entitled to refer the disputes to adjudication, the adjudication determination was binding and there is no basis for Northlake to seek recovery of the amount paid pursuant to the adjudication award as money had and received. Civil also argues Northlake has now lost the right to dispute the adjudicator’s determination in subsequent proceedings because it failed to give notice of its intention to do so in accordance with the conditions of contract.
[4] The case raises issues as to the legal basis for an action for money had and received, the interpretation of dispute resolution provisions in cl 13 of New Zealand Standard Conditions of Contract for Building and Civil Engineering Construction (NZS 3910:2013), and the relationship between those provisions and the dispute resolution procedures in pt 3 of the Act.
[5] More specifically, the principal issues that were raised on the applications before me are as follows:
(a)Was Civil required to dispute the engineer’s decisions under cl 13.1.1 of NZS 3910:2013?
(b)If so, did it do so in the manner required?
(c)Was the adjudicator’s determination binding on the parties?
(d)Does Northlake have a cause of action for money had and received?
(e)Can the adjudicator’s determination now be challenged by Northlake?
[6] It appears to me that the applications turn on whether, notwithstanding the engineer’s decisions, Civil was entitled to refer the disputes concerning the Covid Claim and the Stage 12 Claim to adjudication under the Act, and the adjudicator’s determination is binding. Notwithstanding that, I have addressed the issues as I understood counsel advanced them.
What happened
The contracts
[7] Northlake is undertaking a large residential land and mixed-use development close to the Wanaka town centre. It engaged Civil to undertake bulk earthworks and other related civil works in respect of which the parties entered into several contracts.
[8] The relevant contracts for present purposes are dated 15 August 2018 (the Bulk Works Contract) and 17 July 2019 (the Civil Works Contract). Both contracts included NZS 3910:2013.
[9] NZS 3910:2013 provides for an adaption of the payment regime contained in the Act.1 Under it, there are provisional payment schedules issued by the engineer in response to payment claims submitted by the contractor. Civil could submit payment claims for work conducted during periods of not less than one month. The engineer, on behalf of Northlake, was to issue a provisional progress payment schedule. Northlake was able to notify the engineer in writing of any amendments or deductions it intended to make from the sum certified by him. In the absence of any such notification, the provisional progress payment schedule would become the final progress payment schedule and become payable by Northlake to Civil.
[10] NZS 3910:2013 has separate provisions dealing with the issue of final payment claims and final payment schedules. The submission of the final payment claim by Civil is conclusive evidence that it had no other outstanding claims against Northlake, except for any item which had been referred to arbitration or to adjudication. Upon issue of the final payment schedule, Northlake ceased to be liable to Civil in respect of any of its obligations under the contracts, except in limited respects, including scheduled amounts shown as payable on the final payment schedule or any prior payment schedule but unpaid, and monies which had or became payable under cl 13, which deals with the resolution of certain disputes. I set out the most relevant provisions in cl 13 later in this judgment.
The Covid Claim
[11] On 6 April 2020, Civil issued a notice to the engineer requesting that he suspend the Civil Works Contract effective from 26 March 2020 on the basis that the COVID-19 Level 4 lockdown restrictions necessitated the suspension.
[12] The engineer responded on 27 May 2020, that he would not suspend the contract and recommended discussions between Civil and Northlake to agree a managed suspension of works and the consequences arising from that.
1 SRG Global Remediation Services (NZ) Ltd v Body Corporate 197281 [2022] NZCA 518 at [10]– [12].
[13] On 31 July 2020, Civil issued its payment claim 11 to the engineer, which included costs of complying with the Covid-19 lockdowns (the Covid Claim). It said it was entitled to make the claim as a deemed variation under the change in law provision in NZS 3910:20132 and also sought an extension of time due to the “net effect of the COVID-19–Variation Claim”.
[14] In a notice to the engineer dated 5 August 2020, Civil asserted that it had provided all information necessary for the engineer to fairly assess payment claim 11 and awaited the engineer’s progress payment schedule which, it noted, was due on 11 August 2020.
[15] On 11 August 2020, the engineer advised Civil that he had not yet made a decision on the Covid Claim but would not be approving any amount in the then current payment claim. That same day he issued provisional progress payment schedule 11 deducting all amounts claimed in relation to the Covid Claim.
[16] The parties’ respective lawyers corresponded with the engineer about the Covid Claim, and he took his own legal advice. On 6 October 2020, the engineer advised that, as required by cl 9.2.4, the Covid Claim would be disallowed. That was a reference to cl 9.2.4 of NZS 3910:2013, which provides:3
Within 1 Month of the receipt of notice under 9.2.2 or 9.2.3 or as soon as practicable thereafter, the Engineer shall by notice in writing either confirm that the instruction or matter involves a Variation or disallow a Variation giving reasons for doing so. Unless within that time the Engineer issues a notice in writing disallowing a Variation, the instruction or matter shall be treated as a Variation.
[17] On 10 October 2020, Civil notified the engineer that it disagreed with his decision on the Covid Claim. The email stated it was notice to the engineer under cl 13.1.1 of the contract and “we disagree with your decision to reject our variation claim and the basis for doing so entirely”.
2 Clause 5.11.10 of NZS 3910: 2013.
3 Although Mr Cash suggested that Civil might wish to take the point that the Covid Claim could not be disallowed because the engineer had failed to issue a notice in writing within one month, there was correspondence from Civil's lawyers to the engineer dated 26 August 2020 stating that Civil took no issue with the engineer requiring more time to assess the claim.
[18] Neither party engaged further with the dispute resolution procedure under cl 13 of the contract, but Civil continued to include the Covid Claim in subsequent payment claims, and the engineer continued to deduct those amounts in the progress payment schedules.
The Stage 12 Claim
[19] The works under the Civil Works Contract included six separable portions including Portion F, which referred to Stage 12 of the development comprising 39 lots.
[20] On 24 April 2020, the engineer advised Civil that the works in Portion F would no longer proceed.
[21] Civil issued payment claim 1 on 24 February 2021 for preparatory works prior to Stage 12 being removed from the contract. The amount claimed was $19,764 excluding GST.
[22] The engineer sought further information from Civil in relation to the Stage 12 Claim but did not issue a progress payment schedule in response to Civil’s payment claim.
[23] On 19 July 2021, the engineer advised Civil he had valued the Stage 12 Claim at $8,859 plus GST but said Northlake asked that Civil invoice it directly for this sum rather than process it as a variation to the contract. It appears (although it is not expressly stated) the engineer valued the variation claimed under cl 9.3.4 of NZS 3910:2013, which provides:
The value, if any, of each Variation shall as far as possible be determined by agreement between the Contractor and the Engineer. Failing agreement, the value shall be determined by the Engineer in accordance with 9.3. The value of each Variation when determined shall be confirmed or notified to the Contractor in writing. Where the value as determined differs from any value proposed by the Contractor, the notice shall include the Engineer’s reasons for his or her valuation.
[24] On 10 September 2021, Civil advised the engineer it disagreed with his decision in relation to the Stage 12 Claim but said it would accept the $8,859 plus GST
in full and final settlement if paid within three working days. The payment was not made.
The adjudication
[25] On 28 March 2022, Civil referred the Covid Claim and the Stage 12 Claim (and other claims also) to adjudication under ss 25 and 28 of the Act. Northlake had legal representation and participated in the adjudication.
[26] The adjudicator issued his determination on 11 July 2022 and required Northlake to pay Civil $17,718 (plus GST) with interest of $3,284 in respect to the Stage 12 Claim, and $471,267 (plus GST) in respect to the Covid Claim.
[27] Civil initiated enforcement action to recover the amounts payable under the adjudicator’s determination, following which Northlake paid the sums in full on 28 July 2022. On that date, Northlake’s lawyers wrote to Civil’s lawyers stating that Northlake did not accept it had any liability to Civil and had instructed them to initiate a claim to have the dispute determined in substance. They also advised that while Northlake was “obliged under the Construction Contracts Act to satisfy the interim determination”, upon payment it would become a creditor of Civil in the amounts paid.
[28] On 9 August 2022, Northlake issued a letter to Civil that the disputes were to be referred to arbitration under cl 13.4.2 of NZS 3910:2013.
[29] On 12 August 2022, Civil’s lawyers pointed out that no formal decision had been issued by the engineer under 13.2.4, which was a precondition to referring any dispute to arbitration.
[30] On 30 August 2022, Northlake’s solicitors asserted the engineer’s decisions of 6 October 2020 (in respect to the Covid Claim) and 19 July 2021 (in respect of the Stage 12 Claim) were final and binding as Civil had not taken appropriate steps to challenge them and these decisions “cannot be overruled by belated referrals to adjudication”. Northlake demanded repayment of amounts paid in compliance with the adjudicator’s determination by 6 September 2022, failing which it would file High Court proceedings to recover its “overpayment”.
[31] On 2 September 2022, Civil’s lawyers disputed the demand, noting that under s 60 of the Act the determination of the adjudicator was binding. The position adopted by Northlake was, they asserted, an attempt to elevate the contracts above the statutory determination process, thereby offending s 12 of the Act (which prevents contracting out of the Act’s provisions). They said, while the engineer made decisions and valuations which Civil disputed:
[The adjudicator’s] determination takes precedence over those decisions and valuations, until such time as the balance of the contractual dispute resolution process has been concluded. That is if either party embarks on that process. They have not.
The final payment claim
[32] For completeness, on 13 June 2022 Civil issued a final payment claim which included the Covid Claim and the Stage 12 Claim. The engineer issued a provisional final payment schedule on 17 June 2022. He did not certify either the Covid Claim or the Stage 12 Claim, as he said both were under adjudication.
Summary judgment principles — Northlake
[33] Northlake’s application for summary judgment is made under r 12.2(1) of the High Court Rules 2016 which reads as follows:
(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[34] The principles that apply to a plaintiff’s summary judgment applications are well-known and summarised by Associate Judge Osborne in Mount Grey Downs Ltd v Pinot Properties Ltd as follows:4
(a)Commonsense, flexibility and a sense of justice are required.
(b)The onus is on the plaintiff seeking summary judgment to show that there is no arguable defence. The Court must be left without any real doubt or uncertainty on the matter.
4 Mount Grey Downs Ltd v Pinot Properties Ltd [2018] NZHC 3094 at [12] (footnotes omitted).
(c)The Court will not hesitate to decide questions of law where appropriate.
(d)The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements in affidavits.
(e)In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.
(f)In assessing a defence the Court will look for appropriate particulars and a reasonable level of detailed substantiation – the defendant is under an obligation to lay a proper foundation for the defence in the affidavits filed in support of the Notice of Opposition.
(g)In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.
(h)The need for judicial caution in summary judgment applications has to be balanced with the appropriateness of a robust and realistic judicial attitude when that is called for by the particular facts of the case. Where a last-minute, unsubstantiated defence is raised and an adjournment would be required, a robust approach may be required for the protection of the integrity of the summary judgment process.
(i)Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.
[35] As noted earlier, Civil has also made an application for summary judgment and strike out. I will deal with the relevant principles that apply to those applications later in this judgment.
Northlake’s pleading
[36]Northlake pleads:
(a)the engineer disallowed the Covid Claim and the Stage 12 Claim pursuant to the decisions and/or certifications dated 6 October 2020 (in respect of the Covid Claim) and 19 July 2021 (in respect of the Stage 12 Claim);
(b)Civil did not refer the engineer’s decisions to the engineer under cl 13.2.1 of NZS 3910:2013 or to adjudication under the Act within three months of the decisions being given;
(c)the engineer’s decisions are therefore final and binding;
(d)the adjudication under the Act was commenced outside the contractual time limits for resolving claims and was an abuse of process;
(e)the adjudicator’s determination has no effect on the engineer’s decisions;
(f)Northlake paid sums found to be owing by the adjudicator in respect of the Covid Claim and Stage 12 Claims in the amount of $591,040; and
(g)Civil is in receipt of money paid to it by Northlake to which it has no entitlement.
[37] Northlake’s case, then, is that as Civil failed to challenge the engineer’s decisions within timeframes set out in the contracts, by default those decisions are now beyond challenge regardless of the adjudicator’s determination. This, it says, provides the legal basis for it to recover the payments it made in compliance with the adjudicator’s determination as money had and received.
Issue one — Was Civil required to dispute the engineer’s decisions under the dispute resolution provisions of NZS 3910:2013?
[38] Northlake’s argument is that Civil was required to, but did not, give notice to the engineer challenge the engineer’s decisions and they are therefore final and binding in terms of the contracts. This issue concerns cl 13 of NZS 3910:2013.
[39]The relevant parts of cl 13 are:
13.1.1
No decision, valuation, or certificate of the Engineer shall be questioned or challenged more than 3 Months after it has been given or more than
1 Month after the date on which any relevant Adjudicator’s Determination is given to the parties, whichever is the later, unless notice has been given to the Engineer within that time. Every decision, valuation, or certificate of the Engineer shall be final and binding if neither party has referred it to the Engineer under 13.2.1 or to Adjudication within 3 Months after it has been given, unless notice has been given to the Engineer within that time. This subclause 13.1.1 shall not apply to a Progress Payment Schedule.
13.1.2
Every dispute or difference concerning the Contract which is not precluded by the provisions of 12.4, 12.6, 13.1.1 or 13.2. shall be dealt with under the following provisions of this Section.
13.2 Engineer’s Review 13.2.1
…
13.2.4
Every dispute or difference under 13.1.2 shall be referred to the Engineer not later than 1 Month after the provision of the Final Payment Schedule under 12.5.1, 12.5.3, or 12.5.4 or more than 1 Month after the date on which any relevant Adjudicator’s Determination is given to the parties, whichever is the later. The Engineer shall give his or her decision in writing. Except in the case of a decision under 13.2.4 the Engineer may correct or modify his or her decision by a subsequent decision in writing.
Unless the dispute or any question arising in connection with it has been referred under 13.2.3 and is awaiting a recommendation from the agreed expert, the Engineer may, at any time, in respect of any dispute or difference under 13.2.1 give a decision (in this Section called a formal decision) which states expressly that it is given under this subclause 13.2.4. The Engineer shall give a formal decision on the matter within 20 Working Days of receiving notice in writing from the Principal or the Contractor requiring him or her to give a formal decision and expressly referring to this subclause 13.2.4. Upon making a formal decision the Engineer shall forthwith send copies of it to both the Principal and the Contractor. The Engineer’s formal decision shall, subject to 13.3 and 13.4 or any Adjudication proceedings, be final and binding.
The Stage 12 Claim
[40] The immediate difficulty Northlake faces is that the engineer did not respond to Civil’s Stage 12 Claim (made by payment claim of 24 February 2021) with a progress payment schedule. Rather, on 19 July 2021, he purported to value the claim anticipating that Civil would invoice Northlake direct for that sum.
[41] However, because no payment schedule had been issued in respect to the 24 February 2021 payment claim, under ss 22 and 23 of the Act Northlake had become liable to pay it as a debt due to Civil. The parties could not contract out of those provisions of the Act.5
[42] Northlake’s argument that Civil was required to but did not challenge the engineer’s decision under cl 13 therefore falls away. For reasons that I set out in detail in relation to issue three below, Civil was entitled to refer the non-payment of its payment claim to adjudication under the Act and the determination was binding on Northlake notwithstanding the engineer’s decision.
[43] For completeness, I note that in the adjudication, Northlake argued that an engineer’s email on 11 March 2021 requesting further information concerning the Stage 12 Claim met the requirements of a payment schedule under s 21 of the Act, but the adjudicator rejected that submission. The submission was not advanced before me, and if it had been, I would have rejected it also.
The Covid Claim
[44] The Covid Claim was made in Civil’s payment claim 11 and the dispute referred to adjudication concerned the engineer’s failure to certify payment of those amounts in his progress payment schedule. It follows, Civil contends, cl 13.1.1 does not apply because it expressly provides, “This subclause 13.1.1 shall not apply to a Progress Payment Schedule.”
5 Construction Contracts Act 2002, s 12.
[45] I accept Civil’s submission. Civil issued its payment claim on 31 July 2020 in compliance with s 20 of the Act. The engineer responded with a provisional payment schedule disallowing that claim on 11 August 2020. Civil referred the dispute arising from the payment schedule disallowing its payment claim to adjudication. That it was entitled to do so is recognised in Northlake’s submissions that:
For that reason, the dispute resolution machinery set out in section 13 of NZS 3910 does not apply to disputes over progress payment schedules. If the contractor is unhappy with a progress payment schedule and wants to access additional cashflow, its recourse is to refer the dispute to an adjudication under the [Act] to provide it with immediate cashflow, with its final account to be settled at the conclusion of the contract, resolving all disputed items.
(footnote omitted)
[46] The course Northlake submits a contractor may take in response to a disputed payment schedule is the very course that Civil did take in this instance. It did not have to give notice of that dispute to the engineer under cl 13.1.1 because that clause does not apply to a dispute concerning a progress payment schedule.
Conclusion on issue one
[47] I find that Civil was entitled to refer the disputes concerning its Covid Claim and the Stage 12 Claim to adjudication without giving notice challenging the engineer’s decisions under cl 13.1.1 of NZS 3910:2013.
Issue two — If Civil was required to dispute the engineer’s decisions, did it do so in the manner required?
Northlake’s position
[48] Northlake’s contention is that cl 13.1.1 has two limbs, both of which must be independently satisfied if a party wishes to challenge an engineer’s decision.
[49] It says that in respect to the Covid Claim, Civil’s email of 10 October 2020 satisfied the first — but not the second — limb of cl 13.1.1. This is because, having given notice to the engineer that it disputed his decision in respect to the Covid Claim,
Civil did not otherwise escalate the dispute by way of a request for an engineer’s review of the decision under cl 13.2.1 or an adjudication within three months.
[50] As a result, Northlake asserts, the engineer’s decision rejecting the Covid Claim became “final and binding”. It notes that it was only on 28 March 2022, some 17 months after the engineer’s decision, that Civil referred the Covid Claim to adjudication, which Northlake says was too late.
[51]Northlake interprets cl 13.1.1 as follows:
(a)notice of dispute to the engineer must be given, within either:
(i) three months of the decision, valuation, or certificate of the Engineer being given; or
(ii) one Month after the date on which any relevant Adjudicator’s Determination is given to the parties;
whichever is the later, and
(b)the dispute must be referred to either:
(i) an engineer’s review under cl 13.2.1; or
(ii) an [adjudication under the Act],
and notice of such given to the Engineer within three months of the relevant decision, valuation, or certificate of the Engineer.
(emphasis added)
Civil’s position
[52] Civil does not accept Northlake’s interpretation of cl 13.1.1. Civil says the only notice required to avoid the engineer’s decision becoming final and binding is a notice disputing the engineer’s decision given within three months of the decision. It says there is no requirement that a party who has given such a notice must then escalate the dispute by way of a request for an engineer’s review under cl 13.2.1 or adjudication, or for a further notice that it has done so to be given to the engineer.
[53] Civil argues Northlake’s argument is flawed as it has had to rewrite the second sentence of cl 13.1.1 by adding the words “and” and “as such” (see para [51] above) which fundamentally changes the meaning of the sentence.
[54] Civil also argues that Northlake’s interpretation makes no commercial sense as it requires a party to give notice to the engineer that the dispute has been referred to the engineer under cl 13.2.1 when the engineer will necessarily be aware of that. It says such a requirement is pointless, but also may be draconian, when the failure to give such notice would have the effect of the original decision becoming binding.
[55] Civil says its interpretation is consistent with the words of cl 13.1.1, and to demonstrate this, counsel set out those words but breaking the clause down into its constituent parts. The first sentence reads:
a No decision, valuation, or certificate of the Engineer b shall be questioned or challenged more than
i 3 Months after it has been given or
ii more than 1 Month after the date on which any relevant Adjudicator’s Determination is given to the parties,
whichever is the later,
c unless notice has been given to the Engineer within that time.
[56]Adopting the same approach to the second sentence, it reads:
a Every decision, valuation, or certificate of the Engineer b shall be final and binding if neither party has
i referred it to the Engineer under 13.2.1 or ii to Adjudication
within 3 Months after it has been given,
c unless notice has been given to the Engineer within that time.
[57] Civil says the critical part of the second sentence concerns the meaning of the words “unless notice has been given to the Engineer within that time”. It contends those words denote an exception to the rule that the engineer’s decision will be final
and binding if the other two avenues for dispute resolution (under cl 13.2.1 or adjudication) are not pursued. It says, alongside referring a decision to the engineer under cl 13.2.1 or to adjudication within three months, giving notice to the engineer serves as a means to avoid the decision becoming final and binding.
[58] Civil then submits that the notice to be given and referred to in the second sentence is the same notice given under the first sentence of cl 13.1.1; that is a notice the engineer’s decision, valuation or certificate is disputed. It says this must be so for several reasons. First, because the wording at the end of each sentence is identical and both provide for notice to be given to the engineer within three months. Second, because a notice of dispute under the first sentence of cl 13.1.1 is the only notice referred to in cl 13.1.1. Civil says cl 13.1.1 does not, for instance, refer to a notice to the engineer under cl 13.2.1 or a notice to adjudicate.
[59]Civil submits the framework created by cl 13.1.1 is therefore:
aa party who wishes to dispute the decision of the Engineer must give notice of a dispute to the Engineer within 3 months of the decision (first
sentence);
bunless such a notice of dispute is given, the party must refer the dispute to the Engineer under 13.2.1 or to Adjudication within that 3 month period to avoid the decision becoming final and binding ( second
sentence).
[60] Civil also argues that its interpretation is consistent with the scheme of cl 13, which envisions that disputes can be referred to the engineer for review after the works are completed. It says there are good commercial reasons parties are able to give a notice that preserves their right to subsequently refer a dispute to either adjudication or to the contractual dispute resolution procedure but do not have to do so immediately. For example, while the contract works are still underway, referring a dispute may be both counterproductive to maintaining good working relationships and completing the contract works, and ultimately unnecessary with the passage of time and subsequent events.
[61] Applied to this case, Civil says that it gave notice to the engineer that it disputed his decision within three months and it did not become final and binding.
My analysis
[62] An issue of interpretation of cl 13.1.1 arises. The proper approach to contractual interpretation is an objective one to ascertain the meaning the document would convey to a reasonable person having all the background knowledge reasonably available to the parties at the time of the contract.6 The contractual language must be interpreted within its overall context broadly viewed.7 If the language used, construed in the context of the whole contract, has an ordinary and natural meaning it will be a powerful, but not conclusive, indicator of what the parties meant.8
[63] The Court can determine questions of law on a summary judgment application including issues of contractual interpretation. However, it must be satisfied that the facts are sufficiently ascertained, the matter is adequately argued and the Court can be confident that the point at issue turns on pure questions of law or interpretation.9
[64] I am not satisfied that I am in a position to finally determine the interpretation issue that arises because there is relevant material I do not have before me. By way of example, I understand that cl 13.1.1 differed from the comparable clause in NZS 3910:2003 by including what Northlake referred to as the “escalation requirement” in the second sentence of cl 13.1.1. I would have been assisted to have submissions directed to those and any other changes, as well as evidence from experts in the industry as to how such contracts operate in practice and the considerations that may have a bearing on that issue. In this regard, Civil relied on matters relating to the management of building contracts about which there is no evidence.
[65] I am faced with competing interpretations of cl 13.1.1, both of which are, at least, plausible in my view. Counsel were not able to refer me to any decisions where the issue has been considered. I was referred to several articles prepared by law firms describing the changes introduced by NZS 3910:2013 which support Northlake’s
6 Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432 at [60], citing Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) at 912, per Lord Hoffmann.
7 At [61].
8 At [63].
9 Zurich Australian Insurance Ltd v Cognition Education Ltd [2014] NZSC 188, [2015] 1 NZLR 383 at [37], citing International Ore & Fertiliser Corp v East Coast Fertiliser Co Ltd [1987] 1 NZLR 9 (CA) at 16.
interpretation, but I accept that given the nature of those publications they do not advance matters. I note that the guidelines attached to NZS 3910:2013 also support Northlake’s position, but they do not form part of the contract and neither counsel referred to them.
[66] That all said, and despite Mr Cash’s very able submissions, I am not attracted to Civil’s position on this issue. To my mind, the intention of cl 13.1.1 is that an engineer’s decision, valuation or certificate shall become binding after three months unless it has been referred to the engineer for review under cl 13.2.1 or to adjudication. The second sentence of cl 13.1.1 appears to have been added to ensure that, once raised, disputes are promptly resolved and to set time limits within which that is to occur. Importantly, and consistent with this, upon the raising of a dispute either party has the right to make a referral to the engineer or to adjudication. I do not believe that it was intended that a party can give notice of a dispute within three months of an engineer’s decision and then do nothing at all to advance it to a resolution.
[67] As I have noted, I do not have before me evidence on matters concerning the management of such contracts, but Civil’s argument that it may be beneficial to leave the resolution of disputes until the end of the works is not convincing, particularly given the statutory background of the Act and its emphasis upon the speedy resolution of disputes.10 In addition, if it suits the parties in any particular case to park a dispute, they can always agree to that notwithstanding cl 13.1.1.
[68] Further, while Civil argues that on Northlake’s interpretation the words “unless notice has been given to the Engineer within that time” serve no purpose, that is not so in the case where a party chooses to refer the dispute to adjudication rather than to the engineer for review. It appears to me that it is in fact Civil’s interpretation that renders those words in the second sentence of cl 13.1.1 redundant.
Conclusion on issue two
[69] I am not satisfied that I am able to finally resolve the interpretation issue on this application.
10 Construction Contracts Act, s 3(b).
Issue three — Was the adjudicator’s determination binding?
[70] Northlake’s position is the adjudication was both pointless and of no effect. That argument is contrary to the Act, and would do great violence to its scheme if accepted. It is also contrary to case law.
The Act
[71]Turning first to the Act, its purposes are set out in s 3 and are:
(a)to facilitate regular and timely payments between the parties to a construction contract; and
(b)to provide for the speedy resolution of disputes arising under a construction contract; and
(c)to provide remedies for the recovery of payments under a construction contract.
[72] Section 12 is a no contracting out provision as follows, “This Act has effect despite any provision to the contrary in any agreement or contract.” Civil’s position has consistently been that Northlake’s argument that the engineer’s decisions are binding notwithstanding the adjudication determination attempts to elevate the contract terms above the dispute procedures of the Act, offending s 12.
[73] Part 3 of the Act sets out processes for the adjudication of disputes. Section 25 provides that any party to a construction contract has a right to refer a dispute to adjudication and may exercise that right even though the dispute is the subject of proceedings between the same parties in a court or tribunal.
[74] Section 26 defines the relationship between adjudication under the Act and other dispute resolution procedures. Section 26(1) provides that nothing in pt 3 prevents a party to a construction contract from submitting a dispute to another dispute resolution procedure, whether or not that procedure takes place concurrently with an adjudication. The examples provided of other dispute resolution procedures are proceedings to a court or tribunal, or to mediation, but there is no mention of decisions made by contract administrators (such as the engineer).
[75] Under s 26(2), a submission of a dispute to another dispute resolution procedure while the dispute is the subject of an adjudication does not bring the adjudication to an end or otherwise affect the adjudication. However, under s 26(3), an adjudicator must terminate adjudication proceedings if, before the adjudicator determines the dispute, that dispute is determined under another dispute resolution procedure.
[76] Section 26(4) provides that nothing in any other enactment or rule of law or any contract affects the application of the adjudication provisions.
[77] Section 27(1) provides that nothing done under, or for the purposes of, an adjudication affects any civil proceeding arising under a construction contract.
[78] Pursuant to s 27(2), in any civil proceeding before a court, tribunal or a member under the Weathertight Homes Resolution Services Act 2006 in relation to any matter arising under a construction contract, the court, tribunal or member:
(a)must allow for any amount paid to a party to the contract under, or for the purposes of, this Part in any order or award the court, tribunal, or a member makes in those proceedings; and
(b)may make any orders that the court, tribunal or member considers appropriate, having regard to any steps taken by a party to the contract in good faith and in reliance on an adjudicator’s determination under this Part (including an order requiring a party to the contract to pay for goods and services supplied by another party to that contract in good faith and in reliance on an adjudicator’s determination).
[79] Section 58 deals with the enforceability of an adjudicator’s determination. Importantly, it provides in s 58(1) that, “An adjudicator’s determination under s 48(1)(a) is enforceable in accordance with section 59.” Section 48(1)(a) concerns disputes as to whether an amount of money is payable under a construction contract.
[80] Section 59 provides for the consequences of not complying with an adjudicator’s determination under s 48(1)(a). These are set out in s 59(2) which provides:
(2)The consequences are that the party who is owed the amount (party A) may do all or any of the following:
(a) recover from the party who is liable to make the payment (party B), as a debt due to party A, in any court,—
(i)the unpaid portion of the amount; and
(ii)the actual and reasonable costs of recovery ordered against party B by that court:
…
(c) apply for the adjudicator’s determination to be enforced by entry as a judgment in accordance with subpart 2 of Part 4.
[81] Section 60 provides that an adjudicator’s determination is binding on the parties to the adjudication and continues to be of full effect even though a party has applied for judicial review of the determination, or any other proceedings relating to the dispute between the parties has been commenced.
[82] From this summary of provisions of the Act, the clear legislative intention is that parties to construction contracts have the right to refer disputes or differences for speedy resolution by way of adjudication, which will be binding and enforceable subject only to a later substantive and final determination of the dispute by way of some other dispute resolution procedure.
[83] The Act also makes clear that an adjudication may proceed in tandem with other dispute resolution procedures, such as court proceedings, arbitration or mediation, whether or not the adjudication process commences before or after such other proceedings are initiated and will only terminate if such other procedures determine or resolve the dispute before the adjudicator does. If the adjudicator issues a determination before a court or arbitrator has determined the dispute, the determination will be binding on the parties and continue to have full effect, even if one party has issued judicial review or other proceedings.
[84] Northlake argues that the position I describe in [82] and [83] is not entirely correct as an adjudication determination can be “overruled” by a private agreement of the parties, and an earlier “final and binding” agreement will also take priority over any interim adjudication. It submits that agreeing a contractual process by which disputes are finally resolved is not contracting out of the Act as a party is not thereby deprived of its right to adjudicate, but an adjudication determination is subordinate to the parties’ “final and binding” agreement.
[85] Northlake’s stance that Civil was entitled to refer the Covid Claim and the Stage 12 Claim to adjudication under the Act, that it could participate fully in that process which, no doubt, came at significant cost to both parties, but then simply ignore the result as pointless and of no effect, is both unreal and unappealing. It also, in my view, renders Civil’s right to refer the dispute to adjudication under s 25 of the Act illusory and offends s 12. Further, if Northlake considered the engineer’s decisions were binding and an answer to Civil’s claims, it could and should have raised that in its defence in the adjudication and the adjudicator would have been required to rule upon it.11
[86] I accept Civil’s submission that the fact the parties cannot contract out of the right to refer disputes to adjudication under the Act is reflected in the terms of cl 13 of NZS 3910: 2013. This provides that the time within which steps may be taken under the prescribed processes may run from the date of an adjudicator’s determination instead of the date from which an engineer’s decision that is under challenge was issued.
[87] That the parties may after an adjudication enter into a final and binding agreement that effectively supersedes the adjudication determination is undoubtedly correct, but beside the point. Such an agreement is entered into by way of compromise following the exercise of the parties rights under the Act, but does not contract out of them.
[88] The case law also confirms the adjudicator’s determination was binding. In Body Corporate 200012 v Keene, Brewer J held that an adjudicator’s determination is a judicial decision that is binding pro tem and can be enforced.12 He endorsed remarks of Coulson J in Benfield Construction Ltd v Trudson (Hatton) Ltd in relation to the Housing Grants, Construction and Regeneration Act 1996 (UK), which Brewer J described as having similar purposes to the Construction Contracts Act, that:13
11 Construction Contracts Act, s 45(d).
12 Body Corporate 200012 v Keene [2017] NZHC 2953, [2018] NZAR 120 at [81].
13 At [82], citing Benfield Construction Ltd v Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC) at [34].
(a)The parties are bound by the decision of an adjudicator on a dispute or difference until it is finally determined by court or arbitration proceedings or by agreement made subsequently by the parties.
[89] In DHC Assets Ltd v Toon, the issue was whether the plaintiff should be granted leave under s 248 of the Companies Act 1993 to pursue claims by way of adjudication under the Act against a company in liquidation.14 An argument was raised that leave should not be granted as the engineer’s decision had not been challenged in time under cl 13 of NZS 3910:2003. The plaintiff argued that the dispute resolution provisions of the contract could not curtail its rights to refer the dispute to adjudication under the Act. While it was not necessary for Duffy J to express a definitive view on the issue, she observed:
[15] Section 12 of the [Act] prohibits any contracting out from the provisions of that Act. I cannot see, therefore, how the more restrictive time frames for bringing a dispute under cl 13 can be superimposed on DHC’s rights under the [Act]. To allow that to occur would be in effect to allow a contracting out of that Act’s provisions insofar as they impose time limits for bringing a proceeding under that Act. In my view there is a sound argument that cl 13 does not detract from the other rights and legal remedies that DHC may have either under the [Act] or the law of contract.
[90] Willis Trust Co Ltd v Green was an application for judicial review of an adjudicator’s determination alleging that the adjudicator had no jurisdiction when the parties had agreed to submit disputes to arbitration.15 Harrison J held that s 12 of the Act is unambiguous16 and:17
… subordinates the effect of an arbitration provision where a claim is made under the Act. As a result, the statute prevails notwithstanding an agreement to arbitrate.
[91] An interesting case demonstrating the binding nature of adjudication determinations is G K Shaw Ltd v Green where the applicant was unsuccessful in an adjudication under the Act and then attempted to raise a second adjudication proceeding on the same facts.18 The second adjudicator held that he lacked jurisdiction in view of the earlier determination of the claim on the merits. The applicant sought
14 DHC Assets Ltd v Toon [2016] NZHC 140.
15 Willis Trust Company Ltd v Green HC Auckland, CIV-2006-404-809, 25 May 2006.
16 At [30].
17 At [34].
18 G K Shaw Ltd v Green [2023] NZHC 605.
judicial review of that decision. In the High Court, Isac J dismissed the application for review. While it was not the basis for his decision, the Judge considered that in circumstances where the applicant could and should have raised all its claims the first time around, it was an abuse of process to bring an “almost identical claim dressed up in different legal regalia”.19
[92] Northlake relied on John Holland Pty Ltd v Roads and Traffic Authority of New South Wales,20 but I do not consider it supports its position that the adjudicator’s determination was of no effect. To the contrary, there Giles JA said, in relation to similar legislation:
62It is not correct that … [a contract administrator] who in performing his contractual function comes to a determination negates a statutory right to retain an adjudicated amount. The adjudicator’s determination remains, and brings payment of the adjudicated amount, but that is interim and subject to a different position being established in relation to payment for the relevant work or related goods and services, contractually or in proceedings. If in civil proceedings, it is decided that the contractor was entitled to $10 or $30, rather than the $20 determined by the adjudicator, that does not undo the adjudicator’s determination. It has done its work in ensuring “prompt interim progress payment on account, pending final determination of all disputes”… So also if in the manner earlier described, the contractual mechanisms result in a contractual obligation on the principal to pay the contractor or the contractor to pay the principal. The contractor’s right under the Act is to receive the adjudicated amount, but subject to final determination, and if the final determination involves the [contract administrator] determining that the contractor was entitled to $10 or
$30, rather than $20 determined by the adjudicator, the [contract administrator] is not negating the contractor’s statutory right.
(citation omitted)
Northlake’s alternative positions
[93] Taking a different tack, Northlake relies upon s 26(3) of the Act, which provides that an adjudicator must terminate an adjudication if the dispute is determined under another dispute resolution procedure. Northlake contends that if the contract between the parties provides that a decision of the engineer has become binding by reason of a party having failed to challenge it, then the statutory process must yield to that agreement. I do not accept this argument either. Section 26 is concerned with
19 At [45].
20 John Holland Pty Ltd v Roads and Traffic Authority of New South Wales [2007] NSWCA 140.
other dispute resolution procedures such as court proceedings, arbitration or mediation. It is not concerned with engineer’s decisions as contract administrators.
[94] Northlake also argues that under s 27(2) of the Act, if an adjudicator’s determination exceeds a party’s contractual entitlement, a court must make allowance for that and order restitution. Section 27(2) does not create a free standing restitutionary remedy. It provides for the specific circumstance where a binding but interim determination under the Act is superseded by a subsequent decision of a court, tribunal or under the Weathertight Homes Resolution Services Act. There has been no such decision in this case, which, as I shall come to below, raises a fundamental obstacle to Northlake’s claim as presently framed.
Conclusion of issue three
[95] I am satisfied that the adjudicator’s determination was binding on both Northlake and Civil.
Issue four — Does Northlake have a claim for money had and received?
[96] Northlake argues the cause of action for money had and received provides a restitutionary remedy where there has been an unjust enrichment. It contends all that a claimant advancing such a claim need establish is an enrichment of the defendant, the deprivation of the plaintiff, and the absence of any legitimate reason for the enrichment.
[97] I do not accept Northlake’s submission. While the concept of unjust enrichment is sometimes used as an organising principle that may explain the basis for some restitutionary claims, it is not yet a recognised cause of action in its own right in this country. Northlake relies upon Napier v Torbay Holdings Ltd21 and National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd,22 but both cases
21 Napier v Torbay Holdings Ltd [2016] NZCA 608, [2017] NZAR 108 at [21].
22 National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1997] 1 NZLR 724 at 728 and National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211 (CA) at 215.
concerned claims within established categories where the law recognises a plaintiff’s right to recovery, for example payments made under a mistake.
[98]In Martin v Pont, Tipping J said:23
Although, as stated, unjust enrichment can be regarded as the rationale of (albeit not necessarily the test for) a number of restitutionary claims, it is not a prerequisite of the action for money had and received.
[99] In a recent article in the New Zealand Law Journal, Sean McAnally expressed the view, with which I agree that:24
Money had and received and unjust enrichment are not synonyms to be used interchangeably. One may describe a species of actions falling within the law of obligations, but is not, at least yet, a cause of action. The other is a cause of action, with its own history and precedents, and even if it is now justified by the concept of unjust enrichment, it is a long way from being the cause of action that now exists in England and Wales. The two should not be confused.
[100] Further, even in English law I understand there is “no general principle that to retain money paid without any legal basis (such as debt, gift, compromise, etc) is unjust enrichment”.25 The learned authors of Goff & Jones on Unjust Enrichment state:26
A claimant must be able to point to a ground of recovery that is established by past authority, or at least is justifiable by a process of principled analogical reasoning from past authority. There is in English law “no general rule giving the plaintiff a right of recovery from a defendant who has been unjustly enriched at the plaintiff’s expense”, and the courts’ jurisdiction to order restitution on the ground of unjust enrichment is subject “to the binding authority of previous decisions”: they do not have “a discretionary power to order repayment whenever it seems … just and equitable to do so”.
[101] Related to this, the law will generally not order restitution where a payment has been made pursuant to a legal, equitable or statutory obligation owed by the claimant to the defendant, including payment made pursuant to an order of a court or tribunal of competent jurisdiction. A claim to recover such payment can justly be
23 Martin v Pont [1993] 3 NZLR 25, 30.
24 Sean McAnally “Money had and received: we’re sorry, will you have us back?” [2023] NZLJ 258.
25 Deutsche Morgan Grenfell Group Plc v IRC [2006] UKHL 49, [2007] 1 AC 558 at [21].
26 Charles Mitchell, Paul Mitchell and Stephen Watterson Goff & Jones on Unjust Enrichment (10th ed, Sweet & Maxwell, London, 2022) at [1-30] (footnotes omitted).
answered on the basis the payee had every right to receive it.27 While it appears this principle will not apply in circumstances where money was paid under a judgment that was void, it will apply even if there is reason to believe that the court has made a mistake.28
[102] Here, Northlake made payment to Civil because the adjudicator determined it must do so, and Civil took steps to enforce that binding determination. At the time it made the payment, its then lawyers acknowledged it was obliged to pay to “satisfy the interim determination”. Even now, Northlake accepts that the adjudication was “perfectly valid”, which is to my mind irreconcilable with the case it advances that the determination is pointless and of no effect, and that it is entitled to recover the payment as money had and received. The position might well be different if Northlake had the disputes that were determined by the adjudicator on an interim basis substantively and finally determined in its favour in other proceedings, but it has not yet taken that course.
Conclusion on issue four
[103] Northlake has not supported its claim in reliance upon, or by analogy to, established categories of case where the law recognises a cause of action for money had and received. It has failed to satisfy me that Civil does not have a defence to its claim for this reason. Northlake’s only cause of action cannot succeed also because I do not accept the premises upon which it is founded, namely, that the engineer’s decisions were final and binding and the adjudicator’s determination was of no effect.
Summary judgment application and strike out principles — Civil
[104] A defendant’s summary judgment application is made under r 12.2(2) of the High Court Rules, which provides:
The court may give judgment against a plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff’s statement of claim can succeed.
27 At [2-32]—[2-36], citing Marriott v Hampton [1775-1802] All ER Rep 631 (KB); Wilson v Ray (1839) 113 ER 32; and Clydesdale Bank Ltd v Schröder & Co [1913] 2 KB 1. See also P Twist, J Palmer and Marcus Pawson Laws of New Zealand, Restitution (online ed) at [10] and n 6.
28 Mitchell, Mitchell and Watterson, above n 26, at [2-38] and [2-41].
[105] The position where a defendant applies for summary judgment is different from an application by the plaintiff because a defendant must show the plaintiff cannot succeed on any of its causes of action.
[106] Summary judgment in favour of a defendant will also not be appropriate where it is possible for a plaintiff to amend its claim so as to remedy defects relied upon by the defendant; it should only be used where the defendant has a clear answer to the plaintiff’s claim which cannot be contradicted.29 In this respect, Elias CJ in Westpac Banking Corp v M M Kembla New Zealand Ltd relevantly said:30
Although [the predecessor to r 12.2] refers to the causes of action “in the plaintiff's statement of claim”, [the predecessor to r 15.1] (which permits the Court to strike out a cause of action) similarly is based upon “the pleading”. Under [r 15.1] the Court does not strike out pleadings where a defect can be cured by amendment which the party is willing to make. Similarly, the residual discretion of the Court under [r 12.2] to refuse summary judgment would be properly invoked to avoid the oppression which would otherwise result if an application by a defendant for summary judgment would preempt a plaintiff exercising the right to amend the pleadings … Indeed, use of the discretion to enable amendment is arguably more necessary in the interests of justice in the case of summary judgment than in the case of strike-out because summary judgment results in issue estoppel.
[107] Civil also relies upon r 15.1 of the High Court Rules. It permits the Court to strike out all or part of a pleading in specified circumstances as follows:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it—
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
(2)If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4)This rule does not affect the court’s inherent jurisdiction.
29 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [66]; and
Attorney-General v Jones [2003] UKPC 48, [2004] 1 NZLR 433 at [5].
30 At [66].
[108] The Court will exercise its power to strike out a pleading sparingly and only in clear cases.
[109] I accept the general approach in Attorney-General v McVeagh, where the Court of Appeal said:31
The Court is entitled to receive affidavit evidence on a striking-out application, and will do so in a proper case. It will not attempt to resolve genuinely disputed issues of fact and therefore will generally limit evidence to that which is undisputed. Normally it will not consider evidence inconsistent with the pleading, for a striking-out application is dealt with on the footing that the pleaded facts can be proved … But there may be a case where an essential factual allegation is so demonstrably contrary to indisputable fact that the matter ought not to be allowed to proceed further.
Issue five — Can the adjudicator’s determination now be challenged by Northlake?
[110] Civil says its application for summary judgment/strike out is simply the flipside of the arguments that it raised in defence of Northlake’s claim. It submits that if the Court accepts it was entitled to take the disputes concerning the Covid Claim and the Stage 12 Claim to adjudication, the adjudicator’s determination was binding on the parties until such time as there is a final determination by a court or tribunal or a procedure of the same nature rules differently on the substance of the dispute. It says this is enough for it to be awarded summary judgment or for Northlake’s case to be struck out.
[111] Civil also submits Northlake’s claim should be struck out because Northlake has now lost the right to dispute the adjudication determination. It says cl 13.1.1 envisions there may be a binding and enforceable adjudication determination that affects in some way (such as approving or overturning in full or in part) the engineer’s decision, valuation or certificate with the effect the engineer’s prior decision is essentially replaced by the binding adjudication determination. It argues the effect of cl 13.1.1 is that unless notice of a dispute is given to the engineer within one month of the adjudication determination, it cannot be questioned or challenged. Civil says that
31 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566 (citation omitted).
as Northlake did not give notice of its intention to dispute the adjudication determination within one month or at all, Northlake cannot now challenge it.
[112] I do not accept this argument. There is no requirement in cl 13.1.1 for a party to give notice to the engineer disputing an adjudication determination. The provision is concerned with challenges to engineer’s decisions, not adjudication determinations. An adjudicator’s determination cannot replace an engineer’s decision, it simply resolves a dispute on a provisional and interim basis pending final resolution by other means.
[113] I am not satisfied that Northlake has no prospect of having the disputes concerning its liability for the Covid Claim and Stage 12 Claim finally determined, including in this proceeding (subject to the amendment of its pleadings). It may also be able to seek to have those disputes determined by using the dispute resolution procedures in the contracts, but I make no comment as to whether that is still the case. In these circumstances, it would be wrong to enter summary judgment for Civil. I consider the correct approach is to strike out Northlake’s present cause of action, which I am satisfied cannot succeed, but grant leave for Northlake to amend its pleadings.
Result
[114]Northlake’s application for summary judgment is dismissed.
[115]Civil’s application for summary judgment is dismissed.
[116] In relation to Civil’s application for strike out, I order that Northlake’s cause of action is struck out but with leave reserved for it to file an amended statement of claim within 28 days of the date of this judgment.
[117] The case is to be set down for a further case management teleconference on a date to be fixed by the Registrar. Counsel shall file memoranda at least three working days prior to the next conference with a full suite of proposed timetable directions on the matters in sch 5 to the High Court Rules 2016.
[118] It appears to me that both parties have had some degree of success and that costs would be appropriately reserved. If that is not accepted and either party seeks a ruling on costs, then memoranda may be filed within 28 days and are to be no more than five pages. Any reply memoranda may be filed within 14 days thereafter. I shall determine costs (if necessary) on the papers.
O G Paulsen Associate Judge
Solicitors:
LeeSalmonLong, Auckland
Dentons Kensington Swan, Wellington
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