Walbrook Holdings Limited v Donohue

[2019] NZHC 391

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

I TE KŌTI MATUA O AOTEAROA TE TIHI-O-MARU ROHE

CIV-2018-476-000038

[2019] NZHC 391

BETWEEN

WALBROOK HOLDINGS LIMITED

Appellant

AND

BRIAN JOSEPH DONOHUE and TRACY ELLEN DONOHUE

Respondents

Hearing:

8 March 2019

Appearances:

D W Sim for Appellant

D Brown and K C Beazley for Respondents

Judgment:

8 March 2019

ORAL JUDGMENT OF OSBORNE J

Introduction: the subject-matter of the appeal

[1]                  This is an appeal from a judgment of Judge Maze in the District Court by which her Honour dismissed the appellant’s application for summary judgment.

[2]The claim for summary judgment essentially had two elements:

(a)First, it was a claim for the cost of repairs which the appellant said had arisen through breach of the respondents’ covenant of good repair contained in a deed of lease.

(b)The second element related to a costs award made by an arbitrator appointed by the parties in terms of a provision of the lease which

WALBROOK HOLDINGS LIMITED v DONOHUE and [2019] NZHC 391 [8 March 2019]

required arbitration if there arose any issue as to whether there had been a breach of the good repair covenant in the lease.

[3]                  This morning I initially heard submissions as to the first part of the appellant’s claim (above at [2](a)). But, as submissions developed, Mr Sim withdrew the appeal in relation to that appeal of the District Court judgment. That left the issue of the costs awarded by the arbitrator.

The costs award

[4]                  What happened on the arbitration was this. The parties referred the issue of alleged bad repair to Mr C C Barraclough as their arbitrator. Mr Barraclough proceeded with the arbitration. In the course of the arbitration, the respondents withdrew from engaging in the process, having initially filed a statement of defence and an affidavit. They did not participate at all in the final stages of the process. The arbitrator carried out his responsibilities in terms of the arbitration and delivered an award on 12 May 2017.

[5]                  The arbitrator then proceeded to deal with costs. He issued a final award on 28 November 2017. He awarded costs in favour of the appellant in the sum of

$25,019.55. That was his award. It has not been the subject of any application for setting aside in this Court.

[6]                  The arbitration award was not expressly dealt with in the District Court judgment. The appellant nevertheless failed to obtain judgment for the awarded costs.

[7]                  Mr Brown, who did not have conduct of the proceeding for the respondents in either the arbitration or the Court below, has presented brief submissions as to reasons the Court might not consider it appropriate to grant summary judgment in relation to the arbitration costs. Mr Brown’s submissions primarily reflected the submissions which the respondents have successfully advanced both below and in the lead-up to the appellant’s withdrawal of the first aspect of its claim. The submissions relate to issues of equity and estoppel which are open to the respondents. The good repair issue arose after an assignment by the respondents of their leasehold interest. The assignment was to a company which has an identical directorship to the appellant

company. The deed the parties entered into contained acknowledgements from both the appellant (as lessor) and the assignee as to a belief that the premises were in good condition at the date of assignment.

Discussion

[8]                  While the matters raised by Mr Brown are relevant to the substantive issues which have led to the withdrawal of the first part of this appeal, they cannot affect the Courts’ upholding of the award in an arbitration which was duly conducted. The arbitrator’s award is final. There is no basis upon which this Court or the District Court could conclude other than that the award is, beyond argument, payable.

Outcome

[9]The remaining part of this appeal must therefore be allowed.

Orders

[10]I order:

(a)The judgment of the District Court dated 23 July 2018 is set aside to the extent that summary judgment was not entered for the amount of

$25,019.55.     Judgment is entered for the appellant against the respondents in the sum of $25,019.55.

(b)The respondents are to pay interest on the sum of $25,019.55 calculated from the date of the award, 28 November 2017, to the date of judgment, in a sum to be determined by agreement between the parties or, failing that, submissions (three-page limit) to be filed by the appellant and the respondents respectively within five working days and ten working days, with the Court to then fix the interest on the papers.

(c)The costs of the appeal are reserved. Failing agreement on costs, costs memoranda to be submitted on the time-frame set out at [10](b). In the event no memoranda are filed within 10 working days, the Court’s order is that there will be no order as to the costs of the appeal.

(d)The proceeding is remitted to the District Court for determination of the remaining substantive claim and the costs of the summary judgment application.

Osborne J

Solicitors:

Downie Stewart Solicitors, Dunedin Alexander Law, Oamaru