Shundi Customs Limited v Green - [2024] NZHC 3345

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2147 [2024] NZHC 3345

UNDER the Judicial Review Procedure Act 2016

IN THE MATTER

of an interlocutory application for interim orders

BETWEEN

SHUNDI CUSTOMS LIMITED

Applicant

AND

ROBERT JOHN GREEN

First Respondent

CHINA CONSTRUCTION NEW ZEALAND LIMITED

Second Respondent

Continued …

Hearing: 24 October 2024

Appearances:

S M Hunter KC, B J Ward and S C Trevella for Applicant in CIV-2024-404-2147

G Christie and D S Newport for Respondent in CIV-2024-404-2147 and CIV-2024-404-2237

S M Hunter KC, B J Ward and S C Trevella for Applicant in CIV-2024-404-2237

Judgment:

11 November 2024

JUDGMENT OF BLANCHARD J

This judgment was delivered by me on Monday, 11 November 2024 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

SHUNDI CUSTOMS LIMITED v GREEN [2024] NZHC 3345 [11 November 2024]

Continued …

CIV-2024-404-2237

BETWEEN
SHUNDI CUSTOMS LIMITED

Applicant

AND

CHINA CONSTRUCTION NEW ZEALAND LIMITED

Second Respondent

[1] Shundi Customs Ltd (Shundi) applies under s 15 of the Judicial Review Procedure Act 2016 (JRPA) for interim orders pending judicial review of a determination by John Green dated 2 August 2024 and also under s 290 of the Companies Act 1993 to set aside a statutory demand issued by China Construction New Zealand Ltd (CCNZ) on 23 August 2024. The determination was made by Mr Green as an adjudicator under the Construction Contracts Act 2002 (CCA). It was made in respect of a construction contract between Shundi and CCNZ related to construction of the Seascape development in Auckland central. In the determination, the adjudicator ordered Shundi to pay CCNZ approximately $33 million. CCNZ issued the statutory demand in order to recover this sum.

The Seascape project

[2] The Seascape project is being undertaken in a city block located on Customs Street East between Gore Street and Fort Street, Auckland. The project includes the construction of a 187-metre-high residential building, which when completed will be New Zealand’s tallest residential building. The main tower will offer 221 apartments. The project also includes the development of two associated buildings in the same city block. Once completed, the overall project will include dining, retail and a hotel.

The parties

[3] Shundi is the owner and developer of Seascape. It was incorporated in 2014 and is part of Shundi Group, a multi-national organisation headquartered in China.

[4] CCNZ is the contractor for the development. It was incorporated in 2015 and is a wholly-owned subsidiary of China Construction Eighth Engineering Division Corp Ltd (CCEED), which is registered in Shanghai. CCNZ and CCEED are part of a group headed by China State Construction Engineering Corp Ltd (CSCEC).

The contract

[5] On 5 September 2017, Shundi and CCNZ entered into the construction contract for the project. The contract incorporates NZS3916:2013 general conditions of contract, modified by special conditions set out in schedules.

[6] NZS3916:2013 contains design and build conditions, but the design component was removed prior to execution.…

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: [2024] NZHC 3345
Decision Date: 11 November 2024

CaseChat Overview and Summary

Shundi Customs Limited sought interim orders pending judicial review of an adjudication determination and to set aside a statutory demand. The application was brought against China Construction New Zealand Limited, which had issued the statutory demand to recover an amount ordered by the adjudicator. The determination was made in respect of a construction contract for the Seascape development in Auckland and ordered Shundi to pay China Construction New Zealand approximately $33 million. The High Court was required to decide whether to grant interim relief pending the outcome of Shundi’s application for judicial review and whether to set aside the statutory demand.

The court held that there was a serious question to be tried on Shundi’s arguments in relation to the interpretation of cl 5(k) of the contract. However, the court held that there was a low prospect of success on Shundi’s arguments relating to the 3-step agreement and the adjudicator’s rejection of the evidence on delay. The court was also satisfied that there was a high risk of non-repayment because the parent company guarantee had not yet been registered with the State Administration of Foreign Exchange in China. On the other hand, the court held that China Construction New Zealand would suffer little or no prejudice if interim relief was only for a short period until the parent company guarantee was registered.

Accordingly, the court made an order prohibiting China Construction New Zealand from taking any further action consequent on the determination or bringing or continuing any proceedings in connection with the determination pending registration of the parent company guarantee with the State Administration of Foreign Exchange. Otherwise, the application was dismissed.

Orders