Prestige Building Removals Limited v Vogel
[2023] NZHC 359
•1 March 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-419-000209
[2023] NZHC 359
UNDER Arbitration Act 1996 IN THE MATTER OF
An application for leave to appeal award
BETWEEN
PRESTIGE BUILDING REMOVALS LIMITED
Applicant
AND
SHELLEY LYNN VOGEL and BRET VOGEL
Respondents
Hearing: 7 February 2023 Appearances:
R A Weir for Applicant
A C N Fuiava for Respondents
Judgment:
1 March 2023
JUDGMENT OF ANDREW J
This judgment was delivered by Justice Andrew on 1 March 2023 at 4.30 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar Date………………………….
PRESTIGE BUILDING REMOVALS LTD v VOGEL [2023] NZHC 359 [1 March 2023]
Introduction
[1] The applicant, Prestige Building Removals Ltd,1 is a specialist building relocator. Prestige entered into a contract with the respondents, the Vogels, to relocate for them a transportable home.
[2] The parties had a dispute about their contract. At issue was whether under cl 15 of the agreement the Vogels had provided “proper access” to the site. The relocation involved transporting the house across adjacent third-party private land, namely the Maraetai forest. Prestige maintains that “proper access” required the Vogels to obtain permission from the owners of the forest.
[3] The contract contained an arbitration clause, and the parties attended a three- day arbitration in June 2022 before an arbitrator, Mr David O’Neill, barrister. Mr O’Neill held2 that the Vogels were successful in their claim and granted them an award of $163,012.88, together with costs and disbursements of $75,140.64.3
[4] Prestige now makes application under cl 5(1)(c) of Schedule 2 of the Arbitration Act 1996 for leave to appeal Mr O’Neill’s award on the grounds of material error of law. Prestige says that Mr O’Neill did not correctly interpret the meaning of “proper access” under cl 15 of the agreement; he failed to address the critical requirement of permission of the owners of the forestry land.
[5] The critical issue I must determine is whether there is an arguable error of law or whether the dispute is really one of fact.
Factual background
[6] In January 2021, the Vogels purchased a section in Coromandel township with a view to relocating a house onto that site.
[7] The Vogels live next door to the Gullivers on Rewa Road, Maraetai. The Gullivers and the Vogels agreed that the Vogels would remove the Gullivers’ house
1 Prestige.
2 Judgment dated 28 June 2022.
3 Interest on this sum is to accrue from 11 June 2021.
and relocate it to Coromandel. They entered into a deed of gift dated 16 March 2021. The deed of gift provided that the Vogels would be responsible for removing and transporting the house.
[8] The two properties on Rewa Road are sited on steep sections sloping down towards the Maraetai forest. The forest behind the two properties is owned by Whitford Forest Holding Company Ltd.4
[9] Mr Gulliver and Mrs Vogel were both members of the Pohutakawa Coast Bike Club Incorporated.5 PCBC and Whitford Forest Holding have had a relationship for several years. Whitford Forest Holding has granted a licence to PCBC to enter the forest area owned by Whitford Forest Holding for mountain bike riding on roads, tracks and agreed trails.
[10] Clause 8 of the Whitford Forest Access Licence Agreement between PCBC and Whitford Forest Holding reads:
8 Purpose
For the purpose of mountain bike riding on roads, tracks and agreed trails within the Forest Area.
[11] The forest is not open to the public. There are signs erected advising the public that the forest is private property and that a permit is required to enter the forest. There is a sign at a locked gate off Rewa Road that allows entry by motor vehicles into the forest. That sign states that mountain bikers, walkers and runners are to obtain a permit from PCBC and that such permit would need to be displayed in order to enter the forest. Mrs Vogel is a committee member of PCBC. She is one of the committee members who has a key to this gate to let people through the forest.
[12] The contract between the Vogels and Prestige for the removal and transportation of the house was signed on 22 February 2021.
[13]Clause 15 of the contract reads:
4 Whitford Forest Holding.
5 PCBC.
THAT the purchaser will provide full and proper access to his site and will remove any obstacles, including fences, hedges and trees, to allow the transportation of the building, and will obtain all necessary consents for access through adjoining properties, and indemnifies the contractor and its agents against any claim whatever arising through the transportation of the building through the property of others.
[14] On 4 March 2021, Mrs Vogel emailed Prestige and advised that the relocation of the house required access through the Maraetai forest. She confirmed to Prestige that she (the Vogels) had approval for that and would manage things at their end.
[15] In March and April 2021, Mrs Vogel sent a number of emails and texts to Prestige asking for confirmation on a removal date. She became increasingly concerned that Prestige was not committing to an actual date.
[16] Prestige then advised that it wanted to offload the house once it was winched off the site, place it on temporary packing and then reload it onto a self-steering trailer to enable transportation to Coromandel. Mrs Vogel raised a concern about the house being left on forestry land for longer than one day.
[17] In May 2021, Prestige advised that it was cancelling the contract. The Vogels then filed proceedings in the High Court seeking an injunction requiring Prestige to carry out the move. The proceedings were unsuccessful.
[18] At the arbitration, Mrs Vogel gave evidence that she had obtained permission for Prestige to access the forestry road with the truck and house trailer for the removal. This was obtained from Callum Wilson, president of the PCBC, who confirmed this at the arbitration hearing.
Relevant legal principles
[19]Clauses 5(1) and (2) of Schedule 2 of the Arbitration Act 1996 read:
Appeals on questions of law
(1)Notwithstanding anything in articles 5 or 34 of Schedule 1, any party may appeal to the High Court on any question of law arising out of an award—
(a)if the parties have so agreed before the making of that award; or
(b)with the consent of every other party given after the making of that award; or
(c)with the leave of the High Court.
(2)The High Court shall not grant leave under subclause (1)(c) unless it considers that, having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of 1 or more of the parties.
[20] The Court of Appeal in Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd6 recognised that clause 5(2) is framed in a negative way, where leave to appeal would only be granted where the determination of the question of law concerned could substantially affect the rights of the parties to the arbitration agreement.7 Where this precondition is met, there remains an important discretion to be exercised by the Court in determining whether to grant leave.
Analysis and decision
[21] Prestige contends that there were three errors of law made by the arbitrator, Mr O’Neill:
(a)He erred in his interpretation of the term “proper access” in cl 15 by concluding that it meant access other than that being allowed and approved by the owners of the forestry land;
(b)He admitted hearsay evidence contrary to s 18 of the Evidence Act 2006;
(c)His decision was perverse.
[22]I address each in turn.
6 Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318 (CA).
7 At [11].
Issue (a) – Error in the interpretation of cl 15?
[23]I accept that the interpretation of a contract can be a question of law.8
[24] Mr Weir, on behalf of Prestige, contended that Mr O’Neill skirted around the “proper access” issue. He contended that Mr O’Neill did not identify that matter as the critical issue. In particular, he relies upon [5.2] of the decision where Mr O’Neill breaks down the elements of cl 15 and does not refer to “proper access”. Mr Weir noted that no evidence was given by the Whitford Forest Holding saying that it had granted permission. Furthermore, Mr O’Neill did not discuss the terms of the forestry licence and, in particular, cl 8 which restricts the purpose of access to the land by PCBC.
[25] I reject the submission that Mr O’Neill did not address the critical issue of “proper access” in the Judgment. There is no arguable error by Mr O’Neill in interpreting the phrase in cl 15 “provide full and proper access”. Mr O’Neill expressly addressed the question of whether the owners of the forestry land, namely Whitford Forest Holding, had given permission for the use of its land.9 Mr O’Neill concluded that the relationship between Whitford Forest Holding and PCBC is of a longstanding nature, the relationship was governed by the licence agreement, and that PCBC was able to grant access to the property. He squarely addressed the issue of permission of the landowners and rejected Mr Weir’s submission to him that Mrs Vogel did not have approval for access to the forest.
[26] Mr O’Neill placed some emphasis on the informal but longstanding relationship between Whitford Forest Holding and PCBC. He found as a matter of fact that Mrs Vogel had obtained the necessary consent and that this was confirmed by the witness, Mr Callum Wilson. He noted that the manager of the forest, Mr Grant Spencer, who resides in Whangamata, would visit the forest from time to time to check
8 See cl 5(10) in Schedule 2 of the Arbitration Act 1996; see also Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721; New Zealand Airline Pilots Association Inc v Air New Zealand Ltd [2017] NZSC 111, [2017] 1 NZLR 948.
9 At [4.1] of the Judgment Mr O’Neill refers to the primary issue as access via the forestry road. See also [4.2] and [4.3] where Mr O’Neill expressly records the arguments for Prestige about the necessity to obtain written authority. Prestige argued it was “not good enough that Mrs Vogel had the key” and that consent had to be provided to Prestige in order for “proper” access to be provided within the meaning in the contract.
up on matters. Mr O’Neill found that Mr Spencer had the necessary authority to allow access as and when he saw fit. He further found that PCBC was likewise able to grant access to the property and that was “self-evident from the sign that was posted at the top of the locked forestry road”. He also stated that Whitford Forest Holding appeared to be relaxed about allowing people access to the forest and “[left] that up to PCBC to police”.10
[27] The matters of which Prestige now complains were, in fact, addressed by Mr O’Neill. I accept that at [5.2] of the Judgment Mr O’Neill does not expressly refer to “proper access”. He should have. However, it is clear from the rest of the Judgment that he squarely addressed that issue and applied the facts to it. There is simply no interpretation issue that might form the basis for an arguable error of law. Mr O’Neill was simply applying the facts to the test of “proper access” that he was required to and did, in fact, address.
[28] It is also important to note that the express wording of cl 15 refers not just to “proper access” but also to the obtaining of [by the purchaser, namely the Vogels] “all necessary consents for access through adjoining properties”. The same clause also provides that the purchaser indemnifies Prestige against any claim “whatever” arising from the transportation of the house through the property of others. The issue of permission from the forestry company was squarely addressed by Mr O’Neill; he observed and placed some weight on the indemnity provision in cl 15 in concluding that all Mrs Vogel was required to do, under the contract, was to confirm that she had approval for access in the Maraetai forest.11
[29] At the hearing, one of the critical issues appears to have been whether it was necessary for Mrs Vogel to have obtained written permission from Whitford Forest Holding. That matter was not pursued by Prestige in the present application.
10 Judgment at [2.37].
11 At [5.14].
Issue (b) – Inadmissible hearsay?
[30] Prestige contends that the arbitrator erred in law in accepting as admissible the hearsay evidence offered by Mr Gulliver and Dr Wilson. Those two witnesses gave evidence of access permission they had obtained from representatives of the Whitford Forest Holding. It is contended that Mr O’Neill’s decision breached s 18 of the Evidence Act 2006.
[31] It is clear, and accepted by Prestige, that cl 19 of Schedule 1 of the Arbitration Act 1996 applies. That clause provides that the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. Absent agreement, and subject to the provisions of the Schedule, the arbitral tribunal may conduct the arbitration in such a manner as it considers appropriate:12
… The power conferred on the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
[32] It is likewise not disputed that the Evidence Act 2006 does not apply to a private arbitration process. Under s 5(3) of the Evidence Act 2006, the Act applies to “all proceedings”. An arbitral tribunal does not fall within the definition of a proceeding as defined in s 4.
[33] The commentary in Williams & Kawharu on Arbitration notes that in the absence of an agreement between the parties on procedural matters, the arbitral tribunal has a broad discretion to conduct the proceedings and to deal with evidentiary matters as it considers appropriate, subject only to the mandatory provisions as to procedural fairness and equality.13
[34] I reject the submission that Mr O’Neill erred in admitting inadmissible hearsay evidence. The law is clear; subject to the broad requirements of equality and procedural fairness, Mr O’Neill was entitled to accept hearsay documents in evidence. It was then for him to determine what weight he should place upon them. There was no error in the approach he adopted. It was entirely consistent with the principle of
12 Arbitration Act 1996, sch 1 cl 19(2). See also ss 5(3) and 4 of the Evidence Act 2006.
13 David Williams and Amokura Kawharu Williams & Kawharu on Arbitration (2nd ed, LexisNexis, Wellington, 2017) at [11.3].
party autonomy and consistent with the objective of the Arbitration Act of encouraging the use of arbitration as an agreed method of resolving commercial and other disputes. In submitting to arbitration here, the parties agreed that the rules of evidence were to be determined by the arbitral tribunal, not the Evidence Act 2006. They could have agreed otherwise.
Issue (c) – Perverse decision?
[35] Clause 8 of the forest access licence agreement between PCBC and Whitford Forest Holding limits access to the forest to the purpose of mountain bike riding. Prestige contends that having regard to cl 8 and its limited purpose, the finding of Mr O’Neill that “proper access” was granted was perverse.
[36] In a 2003 report on the Arbitration Act, the Law Commission expressed the following view:14
We are of the view that in the context of an appeal from an arbitral award it would be inappropriate to include a perverse finding of fact within the term error of law.
[37] The Law Commission recommended an amendment to the Arbitration Act to expressly exclude perverse findings of fact, or findings based on no evidence, from being an “error of law”.
[38] The Arbitration Amendment Act 2007 inserted cl 5(10) of Schedule 2 into the 1996 Arbitration Act. That provision reads:
For the purposes of this clause, question of law –
(a)includes an error of law that involves an incorrect interpretation of the applicable law (whether or not the error appears on the record of the decision); but
(b)does not include any question as to whether –
(i)the award or any part of the award was supported by any evidence or any sufficient or substantial evidence; and
(ii)the arbitral tribunal drew the correct factual inferences from the relevant primary facts.
14 Law Commission Improving the Arbitration Act 1996 (NZLC R83, 2003) at [122].
[39] It is not necessary for me to reach any concluded view on whether the 2007 amendment expressly excludes an appeal on the grounds of a perverse finding of fact. It seems likely that it does, but I do not decide the point.
[40] I find that there is no arguable case that the decision of Mr O’Neill on the question of proper access was perverse. He had regard to all the evidence. He did not and was not required to confine his analysis to cl 8 of the forest access licence agreement. He reached the conclusion that the Vogels did provide proper access and met their obligations under cl 15 of the agreement with Prestige.
[41]There is no merit to the “perverse finding of fact” ground of appeal.
Result
[42] The application for leave to appeal is declined. Prestige has not established an arguable error of law in the approach adopted by Mr O’Neill.
[43] Having succeeded, I am of the preliminary view that the respondents, the Vogels, are entitled to costs and disbursements, and on a 2B basis. If costs cannot be agreed, then memoranda (no more than three pages) are to be filed within 14 days.
Andrew J
2