Napier City Council v CityScape New Zealand Limited [2013] NZHC 3166 (29 November 2013)

Last Updated: 16 December 2013

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2012-441-406 [2013] NZHC 3166

UNDER the Arbitration Act 1996

IN THE MATTER OF an application for leave to appeal to the Court of Appeal under clause 5(5) of the Second Schedule of the Act

BETWEEN NAPIER CITY COUNCIL Applicant

AND CITYSCAPE NEW ZEALAND LIMITED

Respondent

Hearing: 22 November 2013

Counsel: J O Upton QC for Plaintiff

J R Parker and L D Tidey for Defendant

Judgment: 29 November 2013

_{JUDGMENT OF GODDARD J}

This judgment was delivered by me on 29 November 2013 at 3.00 pm, pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Lawson Robinson, Napier for Plaintiff

Morrison Kent, Wellington for Defendant

NAPIER CITY COUNCIL v CITYSCAPE NEW ZEALAND LIMITED [2013] NZHC 3166 [29 November

2013]

[1] This matter concerns an application for leave to appeal to the Court of Appeal from a judgment of Dobson J given on 26 March 2013.¹ In his judgment, Dobson J determined two questions of law arising out of an arbitral award. The questions were stated for the Court in the following terms:

(a) whether the arbitrator misconstrued cl 20.1 of the lease as requiring reinstatement of the premises at the end of the term to their condition as they were prior to the fit-out being completed;

(b) whether the arbitrator misconstrued cl 20.1 of the lease by holding that [Cityscape] had incurred costs in reinstating the premises within six months of the end of the term of the lease by entering into a reinstatement contract on 28 September 2011 for the work to be done, even although the reinstatement work was not carried out within that six month period.

[2] The present application for leave to appeal to the Court of Appeal is only in respect of the second stated question of law.

[3] The leave application as brought is not, however, confined to Dobson J’s determination of the question as stated and argued before him. The Napier City Council now seeks to re-argue the question on an entirely new ground. The argument now advanced focuses solely on the applicability of the Construction Contracts Act 2002 (the Act) to cl 20.1 of the lease. This was not raised or argued before either the arbitrator or Dobson J.

[4] In support, Mr Upton QC referred to and relied upon two decisions concerning general appeals (as opposed to an appeal on a stated point of law) in which leave has been granted to adduce additional argument in the interests of justice. First, Mr Upton referred to and relied upon the decision of French J in Tait-Jamieson v Cardrona Ski Resort Ltd, in which leave was granted to the defendant to rely on estoppel or part-performance of a contract founded on an oral

agreement.² The second decision referred to and relied upon by Mr Upton was

_{Foodstuffs (Auckland) Ltd v Commerce Commission, in which the Privy Council}

¹ Pursuant to cl 5(5) of Schedule 2 to the Arbitration Act 1996, any party may appeal to the Court of Appeal from any determination of the High Court under that clause with the leave of the High Court.

² Tait-Jamieson v Cardrona Ski Resort Ltd [2012] 1 NZLR 105 (HC).

gave leave to argue a new point on the basis of a lack of material prejudice and because it was important for the case to be determined on the correct legal footing.³

[5] As I have noted, both of those decisions concerned the exercise of a general right of appeal and therefore are of little assistance in the present situation.

[6] The application as advanced must be declined on jurisdictional grounds as the scope of an appeal from Dobson J’s determination of the question of law posed in this case must necessarily be confined to that question of law, as he determined it, and as also initially determined by the arbitrator in the first instance.

[7] However, there are two further reasons as to why leave should be declined in any event. Both were raised by Mr Parker in his submissions.

[8] The first is that the Construction Contracts Act has no relevance to the situation of the parties to the subject arbitration; nor is it referenced in the lease document which was the subject of the arbitration and the appeal before Dobson J. Nor does the fact that the Act has a “no contracting out” provision in s 12 alter that situation or imbue the Act with relevance to the lease.

[9] The second matter is the purpose of the Arbitration Act 1996. Its clear contemplation is of only minimal intervention by the Court in the arbitral process. The Act’s purposes are as set out in s 5. In Gold and Resource Developments New Zealand Ltd v Doug Hood Ltd, Blanchard J observed of these purposes as follows:⁴

From this section, it is apparent that in passing the 1996 Act, Parliament intended to encourage the use of arbitration to resolve disputes between parties, and to limit the High Court's involvement in reviewing and setting aside arbitral decisions.

_{[10] His Honour further commented:}⁵

3. Foodstuffs (Auckland) Ltd v Commerce Commission [2002] UKPC 25, [2004] 1 NZLR 145 (PC).

⁴ _{Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318 (CA) at [14].}

⁵ At [52].

But our Parliament, like those in the United Kingdom and Australia, has chosen to favour finality, certainty and party autonomy over these considerations. It intended to encourage arbitration as a dispute resolution mechanism. By enacting a statute with the express purpose of redefining and clarifying the limits of judicial review of arbitral awards, Parliament has made clear its intention that parties should be made to accept the arbitral decision where they have chosen to submit their dispute to resolution in such manner. It plainly intended a strict limitation on the involvement of the Courts where this choice has been made.

Result

[11] For all of the above reasons, the application for leave to appeal to the Court of Appeal on the question of law determined by the arbitrator and by Dobson J is declined.

Costs

[12] The defendant is entitled to costs and memoranda may be submitted by counsel.

Goddard J