Waitoto Developments Ltd v Disputes Tribunal HC Whangarei Civ-2007-488-19

[2007] NZHC 1998

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2007-488-19

BETWEEN  WAITOTO DEVELOPMENTS LTD Applicant

ANDTHE DISPUTES TRIBUNAL First Respondent

ANDALLAN JOHN HENRY PAWLEY Second Respondent

Hearing:         31 July 2007

Appearances: R C Mark for Applicant

First Respondent abides the Court’s decision
G J Cannon for Second Respondent

Judgment:      15 August 2007

In accordance with r540(4) I direct the Registrar to endorse this judgment with the delivery time of 2.15pm on the 15th day of August 2007.

RESERVED JUDGMENT OF GENDALL J

[1]      This   is   an   application   for   judicial   review   of   two   decisions   of   the Disputes Tribunal  at  Kaikohe  dated  28  January  2004  and  25  July  2005.    The applicant seeks orders that such decisions were invalid and should be set aside.

[2]      The  decisions  in  question  concern  the  manner  in  which  the  claims  by

Mr Pawley (“the contractor”) and the counterclaims of the applicant (“Waitoto”), had been dealt with to date by the Tribunal.

WAITOTO DEVELOPMENTS LTD V THE DISPUTES TRIBUNAL AND ANOR HC WHA CIV-2007-488-

19  15 August 2007

[3]      The issue to be decided is whether the claim for payment for electrical work done by the contractor and the counterclaims of Waitoto, all of which cumulatively exceed the monetary jurisdiction of the Tribunal, could be pursued as separate and divided individual claims and counterclaims, with each coming within the jurisdictional monetary limitations.

[4]      The two decisions in question were to the effect that first, claims lodged by the contractor with the Tribunal, and Waitoto’s counterclaims should proceed to be determined by the Tribunal as separate claims and counterclaims, despite the cumulative amount in dispute exceeding the jurisdiction of the Disputes Tribunal. That is, the claims and counterclaims could be split and did not require to be determined at one hearing in the District Court.  The second decision, dated 25 July

2005, was a decision in favour of the contractor, on the merits of one claim, which had been divided.

[5]      Section 15 of the Disputes Tribunals Act 1988 provides:

“15     Cause of action not to be divided

A cause of action shall not be divided into 2 or more claims for the purpose of bringing it within the jurisdiction of a Tribunal.”

[6]      If a claim is within the Tribunal’s jurisdiction, matters put forward to dispute that claim are not to be the subject of proceedings between the same parties in any other Court, unless certain circumstances (irrelevant for present purposes) exist;  s17.

[7]      The contractor initially had brought two claims for moneys said to be due for work performed by him on Waitoto properties.  One claim related to one property, the other to a total of five properties.  The Tribunal found there had been no breach of  s15  because each  of  the  claims  was  based  upon  “a  separate  contract  giving separate and distinct rights of action”.  Further, the Tribunal directed that the second claim in respect of five properties, brought as the one claim, should now be filed as, and divided into, five separate claims.

Essential background facts

[8]      Waitoto  had  engaged  the  contractor  in  about  June  2004  to  undertake electrical work on six relocated houses in Russell, Northland.   Waitoto contended that one contract existed, between it and the contractor.  The houses concerned were in the area known as Claremont Estate, being Lots 41, 42, 43, 44, 45 and 49.  From time to time the contractor invoiced Waitoto and accounts were paid.  It transpired that Waitoto later claimed it had been overcharged in respect of Lots 41, 42, 43, 45 and 49, to the extent of $17,994.32.  It declined to pay further invoices rendered by the contractor.

[9]      So, the contractor filed the two claims with the Disputes Tribunal.   These were related to:

(a)      Lot 44 Claim 269/03 for work done – a claim totalling $6,676.73; Waitoto counterclaimed for $2,972.10.

(b)      For work done on Lots 41, 42, 43, 45 and 49 – Claim 266/03 totalling

$3,870.76.  Waitoto counterclaimed for $15,067.22.

[10]     The claim in respect of Lot 44 was determined by the decision of 25 July

2005.  Because of the decision of 28 January 2004, the claim in respect of the other five Lots has yet to be heard.  The Tribunal said they are to be heard consecutively. Claim for payment in respect of those five properties had originally formed one claim, but the Tribunal ruled that they be divided into five separate claims.

[11]     Waitoto contended that the contractor had wrongly split two separate claims, (and the later direction of the Tribunal that the split claim involving five properties was wrong).  It says, that all invoices included work done on all the properties, and whilst  the  invoices  itemised  the  work  carried  out  individually,  identifying  it  in relation to a particular property, the invoice was for a global sum.  It was for all work carried out to the date of the invoice, having been performed concurrently on more than one house, and consecutively over the contract period.  Waitoto contended that the  contractor’s  claims,  and  its  counterclaims,  should  be  heard  together  at  one

hearing in the District Court.  It objected to the contractor splitting his claim in the way that had happened.

[12]     The Tribunal’s decision of 29 January 2004 records that there was an agreed rate of charge, and material charge-up arrangement common to all houses but that the work in respect of each of the six houses separately was a “separate contract” so as to give the contractor separate and distinct rights of action.  As a consequence the Tribunal declined to uphold Waitoto’s objection.  It ruled that the contractor had not split his claims and accordingly was not barred by s15 of having matters determined separately by the Disputes Tribunal.

[13]     Between January 2004 and April 2005 developments occurred, which are immaterial to the determination of these proceedings.  Waitoto argued it was entitled to re-open matters involving the issue of invoices which had been fully paid.   On

26 April 2005 the Tribunal gave an interim ruling.  It said that no grounds had been established for the issue to be revisited, and that the “resumed hearing should deal only with the unpaid invoices or any costs arising from work”.  Waitoto sought to appeal that ruling, and to transfer what were then claims and counterclaims to the District Court.  It was on the basis that the counterclaims involved $15,067.22 which was outside the jurisdiction of the Disputes Tribunal.

[14]     On 16 June 2005 the Tribunal ruled that no appeal would lie until a final decision was made.  It gave as one reason:

“Your counterclaim is in fact several claims.”

The Tribunal said that the matter had been set down for hearing on 26 July 2005. This brought a response from Waitoto to the effect that it was not prepared to go ahead until the earlier matters regarding transfer to a District Court had been determined.  The director of Waitoto, Mr R D Haines, was unable to attend, being overseas from 19-31 July 2005.  An adjournment was requested.  According to the affidavit evidence in this Court, the application for adjournment was declined in a Minute of 14 July 2005.

[15]     That Minute records that the Tribunal said it would proceed on 25 July 2005 in respect of the Lot 44 claim, and that Waitoto’s counterclaim in respect of the other five Lots is “not a true counterclaim (because it does not arise out of the same cause of action).  It is m ore accurate to call it a setoff claim or cross-claim” and further:

“While claims and counterclaims must be heard together – because the same cause of action is being considered – there is no requirement for claims and cross-claims  (which  consider  different  causes  of  action)  to  be  heard together.”

The Minute also records that the Tribunal was “willing to transfer it [the cross- claim]” to the District Court Civil jurisdiction.

[16]     The decision on 25 July 2005 followed upon attendance of representatives of both parties only by telephone.   An  adjournment was  again  sought  by Waitoto because Mr Haines was unavailable.   It was declined.   The decision of that date recorded that Waitoto had claimed it had been overcharged in two areas but that claim was dismissed.  The ruling was that the contractor’s claim succeeded.

[17]     Later events are not directly relevant to the outcome of this application, in the sense   of   directly   relating   to   the   validity   of   the   two   decisions   of   the Disputes Tribunal.  For completeness I record them.

[18]     Waitoto appealed against the decision of 25 July 2005.  This was dismissed by Judge J H Walker in the District Court on 22 November 2005.   He ruled essentially, that the decision of the referee in the Disputes Tribunal had determined the issue of jurisdiction so there was no right of appeal to a District Court.

[19]     As a consequence, Waitoto filed a claim in the District Court to pursue its global counterclaims made against the contractor.  But, on 14 December 2006, the contractor applied to strike them out.  On 20 November 2006 Judge K B de Ridder struck  out  Waitoto’s  proceedings  on  the  basis  that,  in  terms  of  s17  of  the Disputes Tribunals    Act    1988,    it    was    not    possible    to    have    concurrent Disputes Tribunal and District Court proceedings over the same matter.

[20]     I observe at this stage that the section provides that where a claim is lodged with a Tribunal “and the claim is within the Tribunal’s jurisdiction, the issues in dispute in that claim…shall not be the subject of proceedings between the same parties  and  any  other  Court  or  Tribunal…”.    It  will  immediately be  seen  that Waitoto’s grievance is that the claims and counterclaims were not within the Tribunal’s jurisdiction, and it has been thwarted on its appeal by the District Court’s decision;   yet it was still prevented from pursuing its claims in the District Court, because of the Tribunal’s own finding as to its jurisdiction.  The Tribunal effectively said that Waitoto could pursue divided counterclaims, which it did not wish to do.

[21]     The claims in respect of the five properties, Lots 41, 42, 43, 45 and 49 were not  transferred  to  the  District  Court.    Rather,  as  evident  from  a  report  dated

5 September 2005 that the Tribunal made to the District Court, the referee said:

“I have recently learned that the administrative process which should have followed  [the  first]  ruling  was  that  DP  266/03,  which  dealt  with  five contracts should have been split into five separate claims.   This did not happen.”

The referee goes on to record that the cumulative value of the counterclaims is outside the jurisdiction of the Disputes Tribunal and:

“if the correct administration process had been followed the counterclaims could not have been accumulated in that way.”

[22]     The referee said:

“Since  learning  that  the  file  should  have  split  following  [the  referee’s] ruling, I have directed that Mr Pawley [the contractor] may have the matter transferred to the District Court or he may withdraw his existing claim and file five separate claims.”

[23]     As a consequence of that the contractor divided the claims in respect of the work performed on the five properties into the five separate claims.  These and the counterclaim are yet to be determined.

[24]     Waitoto say that its legal interests were affected by the two decisions.  It says the Tribunal erred in giving to itself jurisdiction to determine the claims and counterclaims and further, that its decision of 29 January 2004 was unreasonable,

took into account irrelevant considerations, failed to take into account relevant considerations, and was invalid with the consequence that the subsequent decision of

25 July 2005 likewise was invalid.

Discussion

[25]     The key to these proceedings is the decision of the referee of 29 January

2004.  There does not appear to any transcript or document recording the extent of any hearing then, or reasons given to the representatives of the parties who attended by  telephone.     The  documents  or  material  produced  comprised  the  invoices submitted by the contractor to Waitoto.  The referee’s finding that each house was a separate contract giving six distinct rights, and therefore there was no breach of s15 of the Act, is contained in a document issued by the Tribunal headed “Order of Disputes Tribunal or Settlement approved by Disputes Tribunal”.   That document, handwritten in its significant parts, provides:

“The Tribunal hereby orders

The hearing today was over a matter of jurisdiction – the issue being whether the applicant had split its cause of action in two claims, each individually under the $7,500 limit of the Tribunal in contravention of s15 of the Disputes Tribunals Act 1988.   In this instance the applicant has brought CIV 266/03 in respect of electrical work on a house for $6,676.73;  Claim 269/03 has been brought for the balance of his charges for electrical work on five other houses.

The Tribunal finds that although there was an agreed rate of charge and material charge-up arrangement common to the houses, each was in fact a separate job giving separate and distinctive rights of action:

Accordingly, there is not a single cause of action and no breach of s15 has taken place.

ORDER:

These matters are to be set down for hearing consecutively on the same day.  A minimum of half a day is to be allowed.”

[26]     The reference to Claim 266/03 being in respect of electrical work for one house for $6,676.73 is an error because that reference referred to the other claim but that is not material to the outcome of these proceedings.

[27]     Waitoto contends that everything that followed, upon the initial decision of the Disputes Tribunal that it had jurisdiction, was flawed and has led injustice to it. It says that it took an appeal to the District Court and proceedings in that Court for its counterclaim, because it believed it had to take such action to remedy what was the original problem.  Essentially, it said that the contractor had one claim arising out of the entire relationship or contractual obligations with Waitoto for failing to pay for work done, and it had a legitimate global counterclaim, which had to be transferred to the District Court and should have been determined long ago.   It argued that as matters now stand the contractor has had its claim in respect of Lot 44 invoice determined in its favour but Waitoto’s counterclaim had not been considered in respect of that matter (although the contractor’s counsel submits otherwise).  The remaining claims of the contractor, whether separated or not, and Waitoto’s counterclaims remain still to be determined by the Disputes Tribunal.

[28]     If a Disputes Tribunal acts beyond its jurisdiction it may be the subject of judicial review.   The Tribunal can only exercise such jurisdiction given to it by statute, and appeals from Disputes Tribunal are not generally available;   NZI Insurance New Zealand Ltd v District Court, Auckland (1993) 6 PRNZ 276.   If there is “procedural unfairness” determinations of Tribunals are not free from review whether by way of appeal (s50) or by way of judicial review.  Any order made in excess of jurisdiction is entirely of “no effect” (s45A(2)) and as Thorp J said in NZI Insurance New Zealand Ltd v Auckland District Court (1993) 6 PRNZ 276 at

287; [1993] 3 NZLR 453 at 464:

“Nothing    in    the    foregoing    can    alter    the    obligation    affecting Disputes Tribunals, as it does all statutory jurisdictions, not to act outside the boundaries of the jurisdiction given them by statute.  Any tribunal shown to have done so must be open to review by this Court, which would necessarily strike down its unauthorised determination.  But determinations made within jurisdiction will remain free from review, by the District Court or otherwise, unless tainted by procedural unfairness and  coming within the  ambit of s 50.”

[29]     These proceedings have gone wrong because of a number of factors.  They include the referees:

•   confused a “counterclaim” with “setoff”;

•    misunderstood what is meant by a cause of action in the context of this jurisdiction;

•    denied procedural fairness to Waitoto in the way it required claims of the contractor, as well as any counterclaim, to be divided.

Counterclaim/setoff/cross-claim

[30]     Initially, on 14 July 2005 the Disputes Tribunal referee said:

“(a)     The claim in respect of Lot 44 would go ahead and ‘the cross-claim’

will be transferred to the jurisdiction of the District Court.”

That of course had not happened.

“(b)While claims and counterclaims must be heard together – because the  same  cause  of  action  is  being  considered  –  there  is  no requirement for claims and cross-claims (which consider different causes of action to be heard together).”

That later statement is confuses counterclaims with setoff.

[31]     There is an important distinction between a counterclaim and a setoff.  The referees seem to have used “setoff” and “cross-claims” interchangeably and as meaning the same thing.   A counterclaim does not necessarily involve “the same cause of action being considered” so as to require the same hearing.  A counterclaim is a procedural mechanism where a defendant wishing to claim against a plaintiff may bring a cross-action.  A separate proceeding remains possible.  But it is regarded as desirable that two parties in a dispute be given the opportunity to respond or resolve all disputes at or about the one time.  So, provisions for counterclaims are introduced  as  a  procedural  mechanism.     It  is  conceptually  an  independent proceeding.  A setoff is conceptually different and has to be carefully distinguished from the counterclaim, which is a separate claim in its own right by a defendant against a plaintiff.  Contrastingly, setoff is not a claim but it is a defence.  It can be used only as a shield to a plaintiff’s action, not as a sword.   So a setoff has no independent existence of its own right and stands and falls with the plaintiff’s proceeding.  Even though a setoff is raised as a defence and may be established at a

sum larger than the plaintiff’s claim, the defendant has no enforceable judgments against the plaintiff for the excess.  But a counterclaim is a separate claim which can be pursued in its own right, and not just as a defence, against a plaintiff.

[32]     The reason claims and counterclaims are heard together is not because the same cause of action is being considered.  In ordinary civil cases they can involve different causes of action and separate claims.  In the Disputes Tribunal they may be heard together if within the monetary jurisdiction of the Tribunal, but not otherwise.

[33]     Waitoto’s claims are genuine counterclaims arising, not in respect of setoff through moneys or debts owing to it, but by reason of a claimed overpayment in relation to a number of items of work and invoices which, it is alleged, substantially exceeded the entitlement by the contractor for non-payment of the invoices.  They are genuine counterclaims and they are not setoffs.  They are not “cross-claims” so as to be “separate” to the respondent’s claim in Lot 44 or, for that matter, the other claims in respect of the other five Lots.

[34]     The Tribunal has confused counterclaim and setoff.   As a matter of law Waitoto could have pursued one counterclaim, in defence of, and as a separate claim in respect of any or all of the claims of the contractor.  There is no requirement that Waitoto divide up any claim to alleged overpayments in pursuit of its counterclaims. Within any one counterclaim there may be pleaded one or more cause of action.

[35]     The later report of a referee dated 5 September 2005 sent to the District Court perpetuates the misunderstanding.  The referee said:

“As the earlier referee had ruled that the electrical work was a separate contract and therefore separate causes of action in respect of each house.”

Leaving aside the correctness of that ruling the difficulty is that the contractor chose to claim collectively in respect of five of the six houses.  He did not view them as separate.

[36]     Then the referee said:

“The Waitoto counterclaim of 5 October 2004 in respect of Lot 44 was for

$2,972.10 and the counterclaim items in respect of the other five Lots when brought separately totalled $15,067.22.”

Yet initially the other five were brought, as they were entitled to be, as a single counterclaim.     These  could  have  been  one  counterclaim  for  $2,972.10  plus

$15,067.22, whether in respect of the Lot 44 claim or that relating to the other five lots.

[37]     The referee said:

“The counterclaims should not have been accumulated in this way.”

The answer to this is:  Why not?  It is difficult to understand why that should have been the case unless it is on the basis the referee believed that any overpayment arose in respect of the “separate contracts” and causes of action, but that would not prevent one counterclaim being made.  Counterclaims could have been accumulated and brought as one, whether or not based upon more than one cause of action.  Just as a claim may be based on more than one cause of action (e.g. Breach of Contract and Breach of the Fair Trading Act, so too, a counterclaim may have as its foundation, several causes of action.   The jurisdictional issue is quantum of the claim.

[38]     The referee also said:

“Because the ruling had been given that each Lot was a separate contracts [sic] that meant any counterclaims in respect of those Lots were cross-claims to the Lot 44 claim.”

That was wrong and misunderstood the distinction.

[39]     The counterclaims were not, as the Tribunal appears to have said, simply claimed  “setoff  earlier  invoices”  and,  in  context,  they  clearly  exceed  the  total amounts claimed by the contractor.

Cause of action

[40]     This has been defined in Matanga v Cooper [1965] 1 KB 232 (CA) by

Diplock LJ as:

“A cause  of action is simply a  factual  situation the existence  of  which enables  one  person  to  obtain  from  the  Court  a  remedy  against  another person.”

[41]     The authorities are further discussed by Somers J in Concorde v Anthony Motors [1976] 1 NZLR 741 at 748-749, where the Judge said the cause of action sued on means the act on the part of a defendant which gives the plaintiff the cause for complaint or every fact which would be necessary for the plaintiff to prove to support his right to judgment. In Smith v Wilkins and Davies Construction Company Ltd [1958] NZLR 958 McCarthy J observed that whilst, for example, negligence and breach of statutory duty are usually treated as two separate causes of action from a pleading point of view, they obviously could be incorporated into the same claim and, in relation to amending a claim to introduce a new cause of action, His Honour said that a new cause of action involves a new departure or new head of claim and, at 961:

“In other words, is it something essentially different from that which was pleaded earlier?  Such a change in character may be brought about, in my view, by alterations in matters of law or of fact, or both.  Alterations of fact could possibly be so vital and important as by themselves to set up a new head of claim.  On the other hand, more often alterations of fact do not affect the essence of the case brought against the defendant.”

[42]     In this case the contractor’s claim was simply for the non-payment of his accounts or invoices in respect of work done on six  houses.   Five of these he incorporated into the one claim.  They all arose generally at the same time, place and circumstance,  and  were  involved  in  concurrent  and  consecutive  dealing  with Waitoto.

[43]     The authority referred to me by counsel for the contractor as examples of the situation  where this  Court  dealt  with  allegations  of  claim  splitting and  whether separate causes of action existed, does not assist.  In the decision of Chisholm J in Brown v Christchurch Disputes Tribunal (2000) 14 PRNZ 554 His Honour held

that two claims which were genuinely independent and separate, gave the Disputes Tribunal jurisdiction even though when looked at cumulatively the total amounts in dispute exceeded $7,500.   But that case involved special facts which were quite different to the present.   There, a claimant had brought proceedings in respect of installation of equipment in a property at Christchurch in April 1997 and later in respect of a different property at Timaru in September 1997.  Both claims were filed at the same time.  The Disputes Tribunal accepted them as independent claims and Chisholm J dismissed any challenge to that conclusion.   He was satisfied the two claims were genuinely independent and separate and accepted that it was:

“[13]    I accept that this was not a situation where there was an illegitimate splitting   of   claims   to   bring   them   within   the   jurisdiction   of   the Disputes Tribunal.”

That case is clearly distinguishable on the facts.  The claims related to work done at places and times which were clearly different and unrelated.

[44]     In my view “cause of action” in the context of this legislation cannot be confined simply to an action in one separate contract.  A “claim” is defined in s2 of the Act as meaning “a cause of action in which the Tribunal has jurisdiction”.  So, a “claim” may be founded in contract, quasi contract, or tort for damages or loss to property.  The claim may plead more than one cause of action.  Provided its amount is within the monetary jurisdiction of the Tribunal then it may proceed.  But the real issue prohibited by the legislation is not simply division of a cause of action in the traditional sense, but also the division of a claim so as to manipulate it into the jurisdiction of the Tribunal.  It is not the existence of more than one cause of action which may permit division, but rather the dividing of a claim so as to avoid a jurisdictional limitation that is prohibited.

[45]     Assistance can be gained from a similar English provision in the County

Courts Act 1959, which provides that a plaintiff must not

“divide any cause of action for the purpose of bringing two or more actions in a County Court.”

Courts in the 21st century ought not find it necessary to go back 160 years, but in the present  proceedings  assistance  can  be  gained  from  the  historical  case  of  In  re

Aykroyd Grimbly v Aykroyd (1847) 17 LJ Ex 157;  ER 154, 204 to find authority that still applies today.  In that case a cause of action for the purpose of this provision was held to mean a cause of one action and it may apply to separate items of a continuous and entire demand, the example being given an ordinary bill of a tradesman.

[46]     There the Court held:

“…the term ‘cause of action’ meant ‘cause of one action’, and was not limited to an action on one separate contract – In the case of tradesmen’s bills, in which one item is connected with another in this sense, that the dealing is not intended to terminate with the one contract, but to be continuous, so that one item, if not paid, shall be united with another, and form one entire demand, such demand, if it exceeds £20, ceases to be within the jurisdiction of the county court…”

[47]   That situation exactly parallels and describes the present case, being a tradesman’s  invoices  united  with  each  other  so  as  to  form  one  entire  demand, together with the counterclaims in respect of that which exceeded the jurisdiction of the Disputes Tribunal.

[48]   The factual or legal basis under which the claim for non-payment and counterclaim arose was quite simple;  namely that Waitoto had refused to pay the accounts rendered by the contractor in respect of work undertaken.   Waitoto’s counterclaim was not just as a defence but also as a sword seeking recovery (it contends) because it had overpaid a number of the invoices rendered for that work. The  claim  relates  to  one  cause  of  action,  namely  contract,  and  Waitoto’s counterclaim is a separate and different claim.   Whilst there may be one or more cause of action pleaded in support of a claim, the bar in s15 is not against that circumstance, but rather against dividing one claim into two or more for the purpose of bringing them within the Tribunal.   I do not consider that applies here where, viewed objectively and reasonably, the contractor’s claim arises out of a continuous dealing and demand for all moneys due to him from that  continuous course of dealing which by reason of time, place and circumstances, can fairly be regarded as one transaction.

[49]     Indeed, the contractor himself, in bringing (for example) the combined claim for five lots appeared to have at least partially thought so.  Further, his conduct in forwarding a document prepared by his solicitors, which refers to the parties “having entered into an agreement midway through 2000” supports that view.   Naturally, such an unsigned document is only relevant as being possible evidence of a view then  adopted  by the  preparing  party;    see  discussion  by the  Supreme  Court  in Wholesale Distributors Ltd v Gibbons Holdings Ltd [2007] NZSC 37 but it is capable of being evidence of how the contractor viewed his relationship with Waitoto.

[50]     To summarise, thus far.   For a number of reasons these proceedings have gone wrong.  Firstly, the referee erred in his conclusion that there were a total of six separate claims made by the contractor.  The invoices that he referred to were done on all houses where there  was common parties, common terms of  engagement, common work performed on proximate properties in similar circumstances with a generally similar timeframe, with work performed on an overlapping basis on more than one property at the same time.  As a matter of law there was one contract.  Even if it had not been the case where, for example, there had been a variation or revision or substitution of contractual terms during the progress of the work, the reality is the claims  involved  allege  the  breach  of  the  same  right,  namely  failure  to  pay  on invoices rendered arising out of essentially the same work, on allied properties for similar purposes and rates.

[51]     The Tribunal erred in law in its application of s15(2) to the undisputed facts. Having found that there was an agreed rate of charge and material charge-up arrangement common to the houses, it erred in concluding that “each was in fact a separate job giving separate and distinct rights of action”.  There was a single claim, based upon contract, and the Tribunal erred in concluding no breach of s15 had taken place, and in directing division of the claims.

Procedural fairness

[52]     Counsel  for  the  contractor  contends  that  the  Tribunal  dealt  with  the counterclaim in its decision of 25 July 2005.  I do not think that that can be said to

have properly occurred.   In the end that may be of little moment given that the original decision of 28 January 2004 was flawed and the Tribunal erred in law.  It could not give to itself the jurisdiction that it did, because of its own error.  Apart from the absence of jurisdiction, there is some disquiet in relation to the progress of these proceedings, which have become tortuous, be-devilled by problems, appeals and procedural entanglement.  It is doubtful that general procedural fairness has been afforded to Waitoto.  It had counterclaims which were not “cross-claims” or setoff. It wished to have those counterclaims heard as was its entitlement.  It was unable to successfully appeal to the District Court for the reasons given in Judge J H Walker’s decision, namely that Waitoto was caught by the provisions of s17, and the District Court proceedings had to be struck out.  Likewise, it subsequently failed because of the decision of Judge de Ridder who likewise found that Waitoto was caught by the statutory provisions.

[53]     So, Waitoto faced the situation of having the counterclaim which it wished to advance, whether in respect of one or more of the two claims brought by the contractor, but could not do so other than through being forced to divide the counterclaim  to  reflect  the  alleged  overpayments  in  respect  of  each  particular invoice.  There was no reason why it should have been required to do so.   It was procedurally unfair for it to be so required.

[54]     It is well known that as Cooke J (as he then was) observed:

“Natural justice is but fairness writ larging juridically Furnell v Whangarei High Schools Board [1973] 2 NZLR 705, at 718 (PC) and the rules and standards of fairness are flexible with the requirements depending upon the circumstances of the case, the nature of the inquiry, the rules under which a Tribunal is acting, the subject matter that is being dealt with and other factors; Russell v Duke of Norfolk [1949] 1 All ER 109, 118.”

[55]     General fairness has been denied to Waitoto in not having its counterclaim heard and properly determined in the District Court in the one claim, and having been required to divide up its separate claim so as to give the Tribunal jurisdiction.

[56]   For the reasons given the Disputes Tribunal has erred in law and also procedurally.   The rights of Waitoto to have all matters determined promptly and efficiently at one hearing in the District Court have been impeded.  This is not the

fault of the contractor who also is entitled to feel considerably frustrated by the tortuous process of this litigation and dispute.   The merits may entirely be in his favour but they can only be decided after proper determination.

[57]     The Court in judicial review proceedings has the discretion whether or not to grant relief.  In exercising its discretion the Court will look at questions of delay.  In this case, although there has been significant delay it has arisen because of Waitoto endeavouring  to   exercise   other   avenues   of  relief,   which   met   the   statutory impediments that the two District Court Judges were required to apply.  The validity of what the Disputes Tribunal earlier ruled has not been allowed to go unchallenged. It is simply that all avenues of relief sought by Waitoto were exhausted by them although, they could have by-passed those and simply sought judicial review at the earliest stage.

[58]     Where a Disputes Tribunal acts in excess and outside its jurisdiction then it would be rare if ever that the Court exercised its discretion and declined relief; see Queenstown  Casinos  Ltd  v  Dunedin  City  Council  [1998]  NZRMA  209. Actions of a Tribunal undertaken without jurisdiction could be described as a nullity and have no effect.   Waitoto is entitled to the relief it seeks.   It seems that these matters should be dealt with swiftly, expediently and simply in the District Court at Whangarei.   Remitting them back for rehearing before the Disputes Tribunal is inappropriate because it does not entertain jurisdiction to determine claims that have been split in the way that has occurred here.

[59]     Accordingly, the Court makes the following declaration and orders:

(a)       The decisions of the Disputes Tribunal dated 28 January 2004 and

25 July 2005 are invalid.

(b)       Those decisions are set aside.

(c)      All claims filed in the Disputes Tribunal by Allan John Henry Pawley, the second respondent against Waitoto Developments Ltd and counterclaims by it, under numbers 266/03 and 269/03, are transferred

to the District Court at Whangarei to be heard and determined in that

Court in one combined proceeding.

[60]     As to costs;  I do not think that this is a proper case to award costs against the contractor.  The errors that have occurred has not been necessarily of his making and he was entitled to rely upon the rulings of the Disputes Tribunal and obviously succeeded on two occasions in the District Court.  There is no order as to costs.

……………………………………….

J W Gendall J

Solicitors:

R C Mark, Kerikeri for Applicant

Law North Partners, Kerikeri for Second Respondent