Search Consulting Limited v Complete Construction Limited - [2016] NZHC 668

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-2954 [2016] NZHC 668

BETWEEN
SEARCH CONSULTING LIMITED

Applicant

AND

COMPLETE CONSTRUCTION LIMITED

Respondent

Hearing: 11 April 2016

Appearances:

Ms N Tabb for Applicant
Mr L Huang for Respondent

Judgment:

14 April 2016

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
14.04.16 at 4.30 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

SEARCH CONSULTING LIMITED v COMPLETE CONSTRUCTION LIMITED [2016] NZHC 668 [14 April
2016]

[1] The parties entered a contract in or about April 2014 pursuant to which the applicant agreed to provide structural design services in regard to two properties which the respondent intended to construct at 44 and 46 Remuremu Street, Long Bay, Auckland. The respondent required those services as part of the construction work that was going to be carried on at those locations. In both of the separate written agreements that were entered into, the respondent agreed to meet the following fee obligations:

Fees and timing of payments

Design phase work to be invoiced using the attached Schedule of Prices, with an estimated fee of $4,656 plus GST. Any additional works to be invoiced on a time/cost basis, of $160 per hour, with mileage charged at
$1.20 per kilometre, and disbursements also charged as applicable for expenses such as plan printing, copying and telephone calls. Goods and
services tax (GST) will be added to the above charges.

[2] The above clause is excerpted from the agreement in respect of 46

Remuremu Street. There was an identical provision in the agreement for 44

Remuremu Street except that the estimated fee in that case was $2,656 plus GST. The two amounts stated in the contracts come to a total of $7312 plus GST.

[3] On 20 March 2014, prior to the execution of the contracts, the applicant emailed the respondent in the following terms:

Our work will be invoiced on a schedule of prices (excluding GST) to cover the design phase. The schedule is attached, and provides an indicative fee up to the Building Consent Application Stage from the drawing provided. The building elements I have allowed to design in the schedule have shown on the marked up plans.

[4] Reference was then made to the fact that the invoiced amount “will vary from the estimate with the number of building elements requiring design changes during the design process”.

[5] The applicant sent to the respondent a further email on 3 April 2014 in which it stated:

Our fees during the construction phase cannot be estimated yet as they will depend on a number of factors such as the Council Building Consent

Conditions, any design variations necessary and the number of sites visits necessary (this in itself depends on more factors such as the contractors methodology and staging of works, site conditions and weather conditions). For very rough budgeting purposes, from previous experience on similar projects our fees during this phase have been at least as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 668
Decision Date: 14 April 2016

CaseChat Overview and Summary

Search Consulting Limited filed an originating application seeking to set aside a statutory demand issued by Complete Construction Limited. The applicants sought to recover the unpaid professional fees that they claimed were owed by Complete Construction Limited for the provision of structural design services. The applicants argued that the statutory demand should be set aside because there was a substantial dispute as to whether Complete Construction Limited owed the full amount that was claimed. The dispute was as to whether the applicants were entitled to charge additional amounts over and above the sums that were explicitly stated in the contracts. The court found that there was a substantial dispute and that the applicants had a real basis for their claim. The court ordered that the statutory demand be set aside and that the parties pay their own costs of the proceedings on a 2B basis.

The court found that the applicants had not given a firm quote for their services and had made it clear to the respondents prior to entering into the contracts that their charges might not be limited to the amounts stated in the contracts. The court found that the applicants had a real basis for their claim and that there was a substantial dispute as to whether the applicants were entitled to charge additional amounts over and above the sums that were explicitly stated in the contracts. The court found that the applicants were not artificial or contrived claims for the purpose of defeating the claim which the respondents had brought to enforce the costs order made in their favour. The court found that the applicants were arguably entitled to set off the amount of their claim against that of the respondents. The court found that it was not necessary for the applicants to have taken proceedings in the Disputes Tribunal or the District Court in order for their claim to be bona fide.

Orders