Queenstown Lakes District Council v Concept Builders Queenstown Limited
[2022] NZHC 1742
•20 July 2022
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2022-425-4
[2022] NZHC 1742
BETWEEN QUEENSTOWN LAKES DISTRICT COUNCIL
AppellantAND
CONCEPT BUILDERS QUEENSTOWN LIMITED
Respondent
Hearing: 26 May 2022 Appearances:
E Walton and H Bowering-Scott for Appellant R Conner for Respondent
Judgment:
20 July 2022
JUDGMENT OF MANDER J
This judgment was delivered by me on 20 July 2022 at 4 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar Date: .
QUEENSTOWN LAKES DISTRICT COUNCIL v CONCEPT BUILDERS QUEENSTOWN LIMITED [2022] NZHC 1742 [20 July 2022]
[1] This is an appeal by Queenstown Lakes District Council (the Council) against a determination by the Weathertight Homes Tribunal (the Tribunal) removing Concept Builders Queenstown Ltd (Concept Builders) as a party to adjudication proceedings brought by the body corporate of a set of apartments (the Body Corporate) against the Council pursuant to the Weathertight Homes Resolution Services Act 2006 (the Act).1 The Tribunal determined the Council was time barred from bringing a claim against Concept Builders.
Background
[2] ZQN Apartments is a 10 unit property situated in Queenstown that was built between 2006 and 2009 (the apartments). Concept Builders was engaged in July 2007 by the developer ZQN Ltd (the Developer) to construct the apartments. The Developer experienced financial difficulties and work on the apartments was suspended on 5 September 2008. Concept Builders’ position is that it did not carry out any further building work after this date and that it left the site. However, the Council maintains the suspension was lifted on 6 January 2009 and that there is evidence that Concept Builders returned to the site and undertook building work over the course of that month. This dispute as to when Concept Builders last carried out building work on the apartments is central to whether the Council’s claim against Concept Builders is time barred.
[3] On 9 March 2009, the Developer went into receivership and Concept Builders contract was formally terminated on 6 April. The receivers engaged another building company to complete the remaining construction work and code of compliance certificates were issued by the Council later that year.
[4] On 7 September 2018, the Body Corporate applied to the Ministry of Business, Innovation and Employment (MBIE) for an assessor’s report under s 32 of the Act. For the purposes of any limitation period, that step had the same effect as if it were the filing of proceedings in a court.2 In February 2021, the Body Corporate made a claim against the Council and applied for an adjudication before the Tribunal. Concept
1 Body Corporate 408209, ZQN Apartments v Queenstown Lakes District Council WHT TRI-2021- 100-001, 16 December 2021 (Procedural Order 10 — Removal of Second Respondent).
2 Weathertight Homes Resolution Services Act 2006, s 37(1).
Builders was one of several parties the Council joined to the adjudication on the basis of its alleged responsibility for building work resulting in alleged defects the Body Corporate claims have allowed water to penetrate the apartments. Its claim alleges defects in the cladding, roofing and waterproofing, which the Council maintains are faults caused by Concept Builders workmanship.
[5] Concept Builders applied to the Tribunal to be removed from the proceedings on the basis the Council’s claim against it was time barred under s 393(2) of the Building Act 2004.3 This provision prevents any relief being granted in respect of civil proceedings relating to building work that are brought 10 or more years from the date of the act or omission on which the proceedings are based.
[6] As noted, Concept Builders maintains it did not carry out building work after 5 September 2008 and that the applicable 10 year limitation period under the Building Act is a time bar to the Council’s claim.4 The Council opposed the application to remove Concept Builders from the proceedings. It argues there is conflicting evidence as to when Concept Builders completed its building work and the Tribunal would need to hear evidence in order to determine whether the company undertook building work after 5 September 2008.
Criteria for removal of a party
[7]Section 112(1) of the Act provides:
112 Removal of party from proceedings
(1) The tribunal may, on the application of any party or on its own initiative, order that a person be struck out as a party to adjudication proceedings if the tribunal considers it fair and appropriate in all the circumstances to do so.
[8] The approach to be taken to s 112 is not in contest, nor is the criteria identified by the Tribunal for the removal of a party in its decision disputed by the Council. The applicant for removal will bear the onus of establishing the claim against it cannot, either as a matter of fact or law, succeed. Generally the approach taken to strike out
3 Weathertight Homes Resolution Services Act 2006, s 112.
4 Building Act 2004, s 393(2).
applications under r 15.1 of the High Court Rules will be appropriate. It follows that applications to remove a party under s 112 proceed on the basis the pleaded facts can be proved.5 Evidence can be considered in relatively limited circumstances but those exceptions do not alter the fact the power to strikeout is to be exercised sparingly and only in exceptional cases.6 The court must be able to conclude with confidence the plaintiff has no case. Where there is some doubt or there are disputed questions of fact, the case ought to be allowed to proceed to a full hearing. It follows that strikeout applications are relatively rare.7
[9] Notwithstanding the analogous approach to strikeout applications, this Court has recognised that the words “fair and appropriate” in s 112 may encompass wider considerations, although circumstances where the causes of action would not otherwise be struck out on a traditional strikeout basis will be the exception.8 Concept Builders placed some emphasis on the approach taken by Ellis J in Yun v Waitakere City Council that acknowledged the gatekeeping role of the Tribunal when dealing with the joinder and removal of parties to ensure the Act’s objective of providing speedy, flexible and cost-effective procedures for the assessment and resolution of claims is achieved. It was noted that, because of its inquisitional role, the Tribunal will often have a significant amount of factual information available to it at an earlier stage than a Court would normally have when called upon to determine a strikeout application, which may allow it to be better informed as to relevant facts.9
[10] The Council, while acknowledging that s 112 confers a somewhat wider jurisdiction than the strikeout jurisdiction provided to this Court under the Rules, highlighted the cautionary remarks of Katz J in Saffioti:10
[44] ... Section 112 should not be seen as providing carte blanche to strike out parties at a preliminary stage in circumstances where the claims asserted against them are tenable, but weak. Often in litigation claims which appear
5 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566; Southern Ocean Trawlers Ltd v Director-General of Agriculture and Fisheries [1993] 2 NZLR 53 at 62-63.
6 For a summary of those limited circumstances where evidence can be considered see Saffioti v Jim Stephenson Architect Ltd [2012] NZHC 2519 at [25].
7 At [26].
8 At [44].
9 Yun v Waitakere City Council HC Auckland CIV-2010-404-5944, 15 February 2011, at [23], [29] and [70]; and Lee v Auckland Council [2015] NZHC 1196.
10 Saffioti v Jim Stephenson Architect Ltd, above n 6.
weak at an early stage may gain momentum at trial, whereas other claims which appeared strong at the outset are later revealed to be fatally flawed.
[45] It is necessary to be cautious when approaching applications under s 112 in order to prevent injustice to claimants who may in fact have a good claim once all the evidence is before the Tribunal, including through cross- examination in appropriate cases. Too broad an approach to the jurisdiction under s 112 would involve a risk of injustice to claimants. It is important that claims which may ultimately prove to be meritorious not be prematurely struck out at an interlocutory stage.
[11] The central test for removal under s 112 will be whether there is, or could be, a tenable claim available to the Council against Concept Builders. However, if such a determination is dependent upon evidence that is contentious and challenged, or a party’s credibility is in issue, the Tribunal should be wary of attempting to resolve such matters in the context of a removal application.11 Genuinely and reasonably disputed factual issues, the outcome of which could impact on the success or otherwise of a claim, are generally not suitable for summary determination.12
The Tribunal’s decision
[12] In granting Concept Builders’ application to be removed from the proceeding, the Tribunal accepted the company did not carry out any building work after 5 September 2008 and that its only involvement at the building site in January 2009 was to deliver building materials that had been stored offsite. The Tribunal did not consider the documents relied upon by the Council suggested that Concept Builders carried out any building work after 5 September 2018. It held it would not have made commercial sense for it to have done so because at the time it was disputing the validity of the purported lifting of the suspension of work and claiming outstanding money was owed to it.
[13] In the absence of documentation suggesting that Concept Builders carried out building work after 5 September 2008, the Tribunal concluded there were no genuinely disputed issues of fact regarding when Concept Builders stopped carrying out building work. It followed that any relevant acts or omissions on the part of Concept Builders took place more than 10 years before the Body Corporate applied
11 Saffioti v Jim Stephenson Architect Ltd, above n 6, at [50].
12 Saffioti v Jim Stephenson Architect Ltd, above n 6 at [53].
for an assessor’s report under s 32 of the Act and that, as a result, s 393(2) of the Building Act barred any claim against it.
The appeal
The Council’s grounds
[14] The Council brings its appeal on the basis of three alleged errors by the Tribunal:
(a)The Tribunal erred in concluding that Concept Builders did not undertake any building work after 5 September 2008 and could therefore rely on the statutory bar under the Building Act. It relies on documentation it submits demonstrates that Concept Builders had carpenters onsite for some three weeks throughout January 2009.
(b)Alternatively, the Tribunal erred in finding there were no genuinely disputed issues of fact material to that issue.
(c)The Tribunal erred in concluding there was no tenable claim against Concept Builders. In this regard, the Council submitted there was evidence that Concept Builders completed the majority of the building work alleged to be defective and there is conflicting evidence as to whether Concept Builders has a limitation defence. Further, it submits the claim may gain momentum and strength as a result of further information becoming available or from the cross-examination of witnesses, and that it would be premature to remove Concept Builders before the evidence can be tested.
Concept Builders’ response
[15] Concept Builders maintains the Tribunal was correct to remove it from the adjudication proceedings because there is no genuine or reasonably arguable issue, either of fact or law, that the Council’s claim is not time barred. Concept Builders argues the documents relied on by the Council do not support its contention that Concept Builders was involved in carrying out building work in January 2009.
Instead, they submit the documents are consistent with its stance that it stopped all building work and left the site on 5 September 2008, albeit returning briefly in January 2009 to deliver materials that had been stored offsite.
[16] Concept Builders submits the Council’s argument relies on a strained interpretation of isolated passages from these documents that is not available when regard is had to other contemporaneous material, the context of the situation at the time and a plain reading of the documents themselves. It argues the Tribunal, after reviewing the documents, properly concluded there could be no genuine dispute as to whether Concept Builders had undertaken building work after 5 September 2008 and that no tenable claim against it was available in the circumstances because it was time barred. That being the case, it was “fair and reasonable” for Concept Builders to be removed as a party and there is no reasonable basis upon which the Tribunal’s finding should be overturned.
Analysis
[17] The appeal turns on the Tribunal’s conclusion that the documentation “does not suggest” that Concept Builders carried out any further building work after 5 September 2008 and, more fundamentally, that this material did not give rise to any genuinely disputable issue regarding that fact. If it were genuinely open to dispute that Concept Builders did not carry out any further building work, the Tribunal’s finding the Council’s claim was time barred and that Concept Builders should be removed as a party to the proceedings would be erroneous.
[18] In order to address this question it is necessary to review the relevant documents, including correspondence that took place between January and February 2009 the Council relies upon to suggest Concept Builders was completing building work in early 2009.
Available documentary material
[19] Concept Builders carried out construction of the apartments throughout 2007 and 2008 before building work was suspended on 5 September 2008. It is common
ground that, at the time work was suspended, 80 per cent of the overall contract works had been completed and no further work was carried out during the rest of 2008.
[20] On 2 January 2009, Mr Dawson of the firm Maltbys, who reported to the Developer and had obligations and duties under the building contract in accordance with his role as the responsible engineer, emailed a letter to Concept Builders advising the Developer had secured additional funding to complete the development. He stated the suspension of the contract works was now lifted and the contract would recommence on 6 January 2009.
[21] On 12 January, Mr Dawson sent an email in response to an enquiry from a representative of the Developer enquiring about “Progress on site”. In a short reply, Mr Dawson advised “two carpenters on site”. The Council relies upon this email as evidence of two carpenters having recommenced building work. It also refers to a progress claim dated 21 January 2009 (progress claim no. 23) presented for payment on behalf of Concept Builders and relies, in particular, on a component of that claim relating to the cost of carpentry labour. Previous claims had amounted to 79 per cent of the final cost of this expense, whereas the updated claim of 21 January now sought payment for 92 per cent of these carpentry labour costs, representing an increase of some $23,000.
[22] On 27 January 2009, an email was sent by Mr Dawson to a representative of one of the finance companies funding the project. This was in response to an enquiry about what had happened with the development. Mr Dawson provided the following information:
A brief summary:
The works on site were suspended 5 September 08 due to the Principal’s bond not being provided. In lieu the bond, [Concept Builders] stated that he would accept confirmation that the additional funding was in place. This was provided via [the Developer] prior to Christmas, hence we lifted the suspension on 6 Jan 09. They returned to site on the 6 Jan but only have two carpenters. The contractors is still being picky about the wording/method of the confirmation of funding. As such they have not provided a revised completion date. It is likely to be 6–8 weeks from when all sub-contractors return, but we do not know when this will be until the above is resolved.
[23] On 2 February, Concept Builders’ lawyers wrote to Mr Dawson to formally advise its position regarding the purported lifting of the suspension of works and financial arrangements. The letter formally put in issue Mr Dawson’s decision to lift the suspension but, relevantly to the Council’s argument, it contained the following passage:
As you are aware, Concept has over the last three weeks had men back on site undertaking certain work. This was purely as a gesture of goodwill, in anticipation of what was hoped would be a satisfactory arrangement with Westpac. Unfortunately there seems to have been no reciprocity of goodwill. Concept has no obligation to remain on or protect the site while the contract is in suspension, as it still should be.
[24] The Council submits this excerpt from the lawyers’ letter shows Concept Builders had returned to the site and, while it is unclear what has occurred to trigger Concept Builders’ response to the lifting of the suspension of works, it submits the description of having had men back on the site for a number of weeks undertaking work is inconsistent with Concept Builders’ claim that its involvement in January was limited to the delivery of material that had been stored offsite on a single day.
[25] On 4 February, Mr Dawson sent an email to the bank. After referring to his earlier advice, some two weeks previous, that Concept Builders had returned to the site, he advised he had visited the site in person that morning “to find no one around and everything boarded up”. The Council makes the point that it does not appear the building site had earlier that month been closed up in this manner. The Council then refers to a letter written by Mr Dawson to Concept Builders’ solicitors on 3 March 2009. This correspondence relates to the suspension of the contract and issues concerning the continued financing of the project. The Council relies upon a passage of this letter in which Mr Dawson states:
We find it interesting that your client acted on the above confirmation of funding and direct payment by returning to site on 6 January 2009, yet you consider the matter to be so “important and fundamental as this” we wonder why your client returned to site without finalising these points.
[26] Immediately after this passage the letter records that Concept Builders abandoned the site on Friday, 30 January 2009.
[27] Reliance was also placed by the Council on correspondence from Mr Dawson to Concept Builders dated 28 April 2009 regarding progress claims. In that letter reference is made to an assessment of $45,584.80 that remained to be paid for carpentry labour at the time a payment schedule was issued on 29 September 2008. The letter also refers to a payment schedule issued on 5 February 2009, in response to a claim received on 21 January that year, in which Maltbys assessed the amount remaining for carpentry labour to be $34,650. It was submitted on behalf of the Council that a comparison of these two figures demonstrates that some work must have been completed during the interim period.
The Council’s argument
[28] Taken in combination, the Council argues these documents reasonably place in dispute Concept Builders’ claim that it did no further building work after 5 September 2008 and that its return to the site in January 2009 was solely for the purpose of delivering materials to the site. In that regard, it is noted the references in the correspondence to “carpenters” adds weight not only to the nature of the work but the unlikelihood that skilled tradesmen, as opposed to labourers who would be charged at a lower rate, would be used to carry out such a task. Further emphasis is placed on the description provided by Concept Builders’ own solicitors to “certain work” being undertaken over “the last three weeks” in their 2 February 2009 letter. The Council submits this letter cannot be reconciled with the Tribunal’s acceptance of the claim made on behalf of Concept Builders by its director, Mr Martin Lawn, in a statement supplied in support of its application for removal, that it only visited the site on 15 January to deliver material which had been stored offsite.
[29] The Council argues this letter explains why Concept Builders returned to the site in January 2009 to continue the building work notwithstanding the financial concerns it had regarding the project, it being a gesture of goodwill in anticipation that issues with the Developer would be resolved. This description of the approach being taken by Concept Builders at the time is, it is submitted, consistent with Mr Dawson lifting the suspension on 6 January on the understanding Concept Builders would be willing to proceed upon confirmation that alternative funding had been arranged.
[30] Concept Builders’ solicitors disputed that was the case in their letter of 2 February, but the Council argues the same correspondence confirmed that Concept Builders had recommenced work and been working on site for some three weeks. It was not until the end of that month that the site was discovered to have been closed up and effectively abandoned. The Council argues that, in the face of this evidence, the Tribunal could not have reasonably concluded there was no genuinely disputed issue of fact regarding when Concept Builders finished working on the apartments and therefore whether its claim was time barred.
[31] The Council also highlights an error in the material provided to the Tribunal by Concept Builders concerning a comparison it made between the payment schedules referred to in Mr Dawson’s letter of 28 April 2009. Concept Builders’ response to the Council’s opposition to the removal application purported to set out Mr Dawson’s summary of the payment schedules as showing that between September 2008 and February 2009 Concept Builders did not progress any contract works. The payment schedule issued on 29 September 2008 for “carpentry labour” is reproduced as being the same figure that appears in the later payment schedule issued on 5 February 2009. It appears the figure from the 29 September schedule has been transposed to the 5 February schedule. In fact, the figure in the 5 February payment schedule for “carpentry labour” work that remained to be undertaken had reduced by some $11,000.
[32] The Council submitted the Tribunal, in apparent reliance on Concept Builders’ written submission, erroneously referred in its decision to the payment schedules issued by Mr Dawson as confirming that no carpentry work was undertaken by Concept Builders between 5 September 2008 and 5 February 2009. The Council submitted this was a key finding by the Tribunal that was based on a flawed understanding of the relevant figures.
[33] The Council submitted that, given the state of the evidence, the further enquiries that need to be undertaken, particularly of Mr Dawson, and the conflict that has emerged between Concept Builders’ position and that revealed by the documents, the issue of when Concept Builders stopped building work should be tested at a full hearing and by cross-examination. It was argued evidence would need to be given by Concept Builders regarding its involvement with the site after the suspension of works
was lifted and that it is likely other persons, including Mr Dawson, will need to give evidence about their knowledge of the situation. It submitted that Concept Builders, by contesting the content of some of Mr Dawson’s emails, have effectively contested his credibility and such issues cannot be decided in a summary way without cross- examination. Further, the conflict between Mr Lawn’s position, who says his company was only on site to deliver some materials on a single day and that of his own lawyers, who refer to Concept Builders having men back on site over a period of some three weeks needs to be explored.
[34] Finally, the Council submitted the Tribunal could not have concluded there was no tenable claim against Concept Builders given it had completed the majority of the building work alleged to be defective, including approximately 80 per cent of that work before the building contract was terminated. Reliance is placed on Mr Lawn’s own statement that 92 per cent of the tanking and 95 per cent of the roof had been completed at the time work was suspended on 5 September 2008, which, it is submitted, are two of the primary sources of defects alleged by the Body Corporate in its claim. The Council argued that, leaving to one side any limitation issues, as the head contractor, Concept Builders should be liable for alleged defects relating to the installation, finishing and workmanship. It follows, in the Council’s submission, it has a tenable claim available to it which may strengthen as further enquiries are made and more detailed evidence provided or tested as a result of cross-examination. It is therefore not, in its submission, appropriate for Concept Builders to be removed at this stage.
Concept Builders’ argument
[35] Concept Builders maintain that, when placed in context, the documents relied upon by the Council are not capable of reasonably suggesting that it engaged in building work during January 2009. It notes that Mr Dawson’s letter of 2 January was sent on a public holiday and that the “contract recommencement date”, 6 January, was the first working day following the contractual shutdown period. Irrespective of whether the suspension was validly lifted, Concept Builders say it was simply not feasible for arrangements to be made to remobilise staff, subcontractors and arrange for plant and materials following a four-month suspension period to allow the
resumption of building work on that date. Mr Dawson’s reference in his email of 12 January to there being only “two carpenters on site” is consistent with that being the case.
[36] Concept Builders submitted that the commercial and contractual relationship between the parties was severely strained at this time. It was owed a significant amount of money by the Developer for work it had carried out up until when the building contract was suspended on 5 September 2008 and had significant reservations as to whether the Developer had sufficient financial backing to ensure further payments under the contract. As recorded by Concept Builders’ lawyers in their letter of 2 February, it considered the Developer continued to be in default and did not believe the suspension of works had been validly lifted.
[37] Set against those circumstances and the time of the year when the suspension was purportedly lifted, Concept Builders maintains it did not consider itself under any obligation to resume building work and, as stated by Mr Lawn in his statement to the Tribunal, it did not do so because it was reluctant to proceed with any further work at the site while its outstanding claims remained unpaid. The Developer’s financial position culminated in its receivership and the building contract being terminated. Concept Builders submitted the documents the Council relies upon must be interpreted against this critical context.
[38] In reference to Mr Dawson’s statements in his emails of 12 and 27 January of there being two carpenters on site, Concept Builders submits that neither in those emails or in any other document does Mr Dawson refer to building work having resumed on site or of any progress having been made in that regard. Contrary to the inference sought to be drawn by the Council, Mr Dawson refers to Concept Builders being “picky” about the Developer’s confirmation of funding, that it has not provided a revised completion date and that it would likely be another six to eight weeks before all subcontractors returned. It is apparent therefore, in Concept Builders’ submission, there remained outstanding contractual issues between the parties relating to payment and ongoing financing of the project and that it did not accept the Developer’s breach of contract had been resolved or that Mr Dawson’s purported lifting of the suspension of works was justified.
[39] Further, Concept Builders argues Mr Dawson’s emails need to be interpreted against his role as engineer to the contract and his responsibility to act as an advisor and representative of the Developer in dealings under the contract, essentially as the “Principal’s agent” who administers the contract on behalf of the Developer to ensure the proper and timely completion of works. Concept Builders submits that he has an interest in conveying to those involved in the future financing of the project that “all is well” and downplaying any dispute between the contracting parties. It was submitted Mr Dawson would be motivated to avoid suggesting in his correspondence there were difficulties with progressing the building contract.
[40] Concept Builders also highlighted that the Council is a party who had no direct involvement in the matter at the time and is entirely dependent on reconstructing events from the documents. Its argument, it is submitted, hinges on isolated references that amount to supposition in the absence of any direct evidence of the type that has been provided by Mr Lawn in his statement to the Tribunal and ignores the context of the situation, as previously outlined.
[41] The Council’s approach to the use of Concept Builders’ lawyer’s letter of 2 February is subject to similar criticism. It submits the Council, in relying on one passage of the letter, ignores the balance of the correspondence relating to the Developer remaining in breach of the contract and the invalidity of the purported lifting of the suspension of works. In relation to the passage relied upon, Concept Builders submits the Council’s reliance on that part of the letter is misconceived. It argues the reference to Concept Builders having “over the last three weeks had men back on site undertaking certain work” is a reference to there having been men back on site at some stage over the last three weeks and not, as the Council argues, that men had been on site for a period of three weeks. This, it submits, is a reference to the delivery of materials over the preceding three weeks as a “gesture of goodwill” in anticipation of satisfactory financial arrangements.
[42] Concept Builders argued that when regard is had to the outstanding contractual dispute and the strong reservations expressed on its behalf relating to the lifting of the suspension of the works, it would have made no sense for it to have returned to the site to resume building work in January 2009. Because of the commercial situation, it
submits it would not have carried out any further building work, particularly given it was still owed money for work carried out before the September 2008 suspension of works. Its sole involvement with the site was to deliver materials as a sign of good faith in order to ensure that, should the contractual matters be satisfactorily resolved, it could resume building work. Concept Builders emphasises that none of the documents relied upon by the Council say anything about the building work alleged to have been carried out and there can be no suggestion that undertaking the delivery of materials was in any way causative of loss to the Body Corporate that could support an argument that such an activity brought it within the limitation period.
Decision
[43] The Tribunal concluded none of the documentation suggested Concept Builders carried out any building work on the apartments after 5 September 2008. I accept that for Concept Builders’ removal application to succeed it needed to meet such a threshold. However, I do not consider such a conclusion was available to the Tribunal. It needs to be reiterated the onus lay on Concept Builders to establish that the available evidence indisputably admitted no other conclusion but that its only involvement with the apartments during the month of January 2009 was to deliver some building materials that had been stored offsite. To that end, Concept Builders primarily, if not solely, relied upon Mr Lawn’s statement to that effect.
[44] In response, the Council identified documentary evidence from Mr Dawson that Concept Builders had two carpenters on site and Concept Builders’ own lawyers that “certain work” had been undertaken “over the last three weeks”. Of themselves, those documents prove little. However, they do raise issues regarding whether Concept Builders’ involvement with the site during January 2009 was simply limited to delivering materials to that location on 15 January and whether, given the presence of carpenters and the length of time it is said it was engaged in carrying out “certain work” as a gesture of goodwill, it did not engage in further building work during that month.
[45] Concept Builders made extensive submissions as to why the questions raised by these documents could be dispelled largely by reference to the context of the
situation at the time. That argument extended to a need to be cognisant of Mr Dawson’s motivations as the Developer’s representative in relaying, at best, a vague summary of the situation, and his interest in conveying to other parties that “all is well” with the project, downplaying any dispute between the contracting parties. Concept Builders denied such a submission was placing Mr Dawson’s credibility in issue, but if a gloss is required to be placed on documents sourced from him or other documents interpreted in a certain way to counter the Council’s view of their meaning, that tends to suggest there are disputable items of evidence that weigh against the case being dealt with in a summary way.
[46] Concept Builders disputed the Council’s submission it was reasonable to expect further evidence to become available that may be relevant to Concept Builders’ involvement in building work in January 2009 and the opportunity afforded for evidence to be tested by cross-examination. The Council’s submission to this effect was advanced on the basis it would be premature at this preliminary stage to remove Concept Builders from the adjudication proceedings. As previously observed, the Council was not directly involved with the building site between September 2008 and June 2009 as there were no building inspections carried out over that period. In the absence of any direct involvement, Concept Builders submitted the Council is dependent upon documentation held by the parties involved.
[47] It submits that, in accordance with directions made by the Tribunal, all relevant documents held by the parties have been made available to it and that, in any event, the Council was provided, for the purpose of the removal application, with the opportunity of producing any further documents it wished the Tribunal to consider. Concept Builders argues that it is unrealistic to suggest there will be further documentation that will come to light and notes that cross-examination of witnesses in adjudication proceedings is at the Tribunal’s discretion.
[48] However, the Council argued there is an obvious need for there to be further evidence in order to resolve, for example, such matters as the conflict between the accounts provided by Mr Lawn and Concept Builders’ own lawyers as to how long the building company was on site during January 2009, whether the three week period suggested in its solicitor’s letter could be accounted for simply by the delivery of
materials to the site and why those present were described as carpenters. Moreover, it was emphasised that further enquiry needs to be made of Mr Dawson regarding his understanding that Concept Builders had returned to the site in January for the purpose of recommencing work and that it appeared to have come as a surprise to him that the contractor had quit the site at the end of the month. In the absence of Mr Dawson having been taxed about these issues, I accept there presently appears to be a gap in the narrative, or at least a disconnect, as to what was occurring on the construction site during this period.
[49] Both sides sought to rely upon changing figures in various payment claims and schedules issued over this period. I accept Concept Builders’ submission that care is required before reading any particular significance into these figures, changes to which may have been the product of reassessment of the work completed rather than an indication of work undertaken over the course of a particular period. In the absence of evidence from those involved in their preparation or expert evidence regarding what inferences can safely be drawn from them, they are for present purposes best put to one side. However, the questions raised relating to their interpretation remain.
[50] I do not overlook Concept Builders’ submission that, even if taken at face value, the documents available to the Council do not show that when Concept Builders returned to the site after 6 January 2009 it actually carried out any building work. However, it is not necessary for the Council to prove in its opposition to the removal application that Concept Builders did carry out building work, only that there is evidence that reasonably puts in contention its assertion that it did not. It is not for the Tribunal on the hearing of the application to determine that question of fact, which, in my view, it has erroneously proceeded to determine.
[51] A secondary argument advanced by Concept Builders is that any claim by the Council can only be limited to its acts or omissions that occurred on or after 7 September 2008 and that it has a complete limitation defence in respect of any of its actions that took place before that date. It submitted the extent of its potential liability must be limited to loss or damage caused as a result of work allegedly carried out by two carpenters over a three-week period in January 2009. I accept the Council may face significant difficulties in establishing any work that may have been undertaken
during that time was causative of any loss. However, the Tribunal’s decision to remove Concept Builders from the adjudication proceedings was based on a finding that it could not be suggested it carried out any building work on the apartments after 5 September 2008. Whether the Council can prove any such work bears on the allegations of fault made by the Body Corporate is a different issue that will ultimately turn on whether it can prove its claim, as opposed to whether it is time barred.
[52] Finally, Concept Builders placed some reliance on other documents produced later in 2009 that it argued supported its position it did not carry out any building work after 5 September 2008. These include a letter from Mr Dawson on 12 May 2009 relating to payment claims and schedules which refers to materials stored offsite that were finally delivered on 15 January 2009, and correspondence of 3 June 2009 from the Developer’s receivers to the new contractor engaged on the project that refers to the works having been “stalled” since late 2008. Reference was also made to a letter from Mr Dawson of 3 December 2009 that included a summary of invoices setting out costs incurred to complete the works deducted from the agreed amount that would otherwise have been payable to Concept Builders. The point is made that Concept Builders does not appear in the list of contractors used to complete the project after the suspension of the contract works on 5 September 2008.
[53] Having reviewed these documents, I do not consider, in the context of the removal application, they materially advance the issue of whether Concept Builders was engaged in building works in January 2009 as part of the original building contract. Importantly, they do not put to rest the issue raised by the other material upon which the Council relies. Instead, they simply add to the controversy, albeit in a way that may support Concept Builders’ side of that argument.
Conclusion
[54] I accept the merits of Concept Builders removal application based upon the application of the 10-year limitation period are finely balanced. The Council’s claim against it based, as it must be, on Concept Builders’ involvement in carrying out work on the site in January 2009 is weak. However, the focus at this time must be on whether the Council’s claim is untenable because it is time barred which, in turn, rests
on the proposition that it is not open to genuine and reasonable dispute that Concept Builders did not engage in any building work after 5 September 2008.
[55] I consider at this stage the Council is reasonably entitled to rely upon the documentary evidence to challenge Concept Builders’ contention that its only involvement after the date the limitation period expired was to deliver materials to the site. Having regard to the competing information and arguments available to the parties, I consider the Tribunal erred by attempting to resolve, in the context of a removal application, this disputable factual issue, the outcome of which will have a decisive impact on the fate of the Council’s claim. Having determined that in the circumstances that issue was not suitable for summary determination, I conclude the appeal should be allowed.
Result
[56] The appeal is allowed. The Tribunal’s order removing Concept Builders as a party to the adjudication proceeding is quashed and it is reinstated as a party to that proceeding.
Costs
[57] The Council, as the successful party, is entitled to scale costs on a 2B basis and reasonable disbursements. If costs cannot be agreed, the parties are to exchange and file memoranda (not more than three pages) within 15 working days of the date of this judgment.
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