Riteline Roofing Limited v New Forest Homes Limited [2016] NZHC 949 (11 May 2016)

Last Updated: 27 December 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2015-404-002288 [2016] NZHC 949

IN THE MATTER OF	the Companies Act 1993
BETWEEN	RITELINE ROOFING LIMITED Plaintiff
AND	NEW FOREST HOMES LIMITED Defendant

Hearing:	11 May 2016
Appearances:	N Tabb for the Plaintiff J Macdonald for the Defendant
Judgment:	11 May 2016

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

RITELINE ROOFING LIMITED v NEW FOREST HOMES LIMITED [2016] NZHC 949 [11 May 2016]

[1] The issues in this proceeding arise out of the parties’ dispute regarding the plaintiff’s claim of unpaid invoices in connection with building work carried out by the plaintiff for the defendant.

[2] When the plaintiff issued final invoices the defendant disputed any requirement to pay those, claiming the construction work had not been completed and, therefore, in terms of the parties’ contract, until work was completed final payments were not due.

[3] This proceeding began with the plaintiff’s service of a statutory demand. From the beginning the defendant made it clear there was an issue regarding the nature of the parties’ contract which required resolution.

[4] The plaintiff filed the present liquidation proceedings.

[5] Shortly after the defendant:

(a) lodged applications for stay and restraining of advertising; and

(b) lodged in an interest bearing account with its lawyer, a sum of money sufficient to pay the statutory demand.

[6] It was the defendant’s stay and restraint applications that had been scheduled for hearing in this Court initially on 9 February 2016. That hearing was adjourned at the defendant’s request. The defendant claimed the plaintiff had not complied with timetable obligations for the filing and service of submissions.

[7] At that time plaintiff’s counsel advised the only issue before the Court was the plaintiff’s claim for collection costs in an amount which had been included as part of the statutory demand sum.

[8] Before the matter was called before me this morning it was not clear for what purpose a hearing would be required. In discussion with counsel Mr MacDonald
advised that the contract works in question had recently been the subject of a private adjudication, the outcome of which the defendant now believes any liability for contractual debt is very much smaller than the amount claimed by the statutory demand. This position is not accepted by the plaintiff.

[9] At the core of the parties’ claims is the defendant’s refusal to pay the plaintiff’s final invoices. The defendant says the parties agreed those were not due until construction works were completed.

[10] It is clear from counsel’s submissions that issues arise regarding whether terms of the Construction Contracts Act 2002 may apply, for that Act takes control of a payee’s obligations if standard of work issues arise. The Act says regardless, the invoice must be paid, unless the payee issues a schedule identifying the value of those work elements for which payment is challenged.

[11] The defendant says that even if the final invoice was a valid Construction Contracts Act payments claim, it has provided an effective payment schedule response.

[12] The facts are that work was required to be completed after the issue of a final invoice – although the parties cannot agree about the extent of the work required.

[13] In the Court’s view:

(a) It became clear with the filing of the stay and restraint applications that the statutory demand and liquidation application process was inappropriate for resolution of the parties’ disputes.

(b) At an early stage the defendant lodged funds to pay the plaintiff’s claim, including for collection costs, into a solicitor’s trust account.

(c) The submissions of counsel have focused on issues about whether the plaintiff’s invoice was payable. Considerations of legal interpretation arise. It is likely, however, oral evidence will be required to assist with any determination of those issues.

Conclusions

[14] There is no reason why the Court should not dismiss both the plaintiff’s liquidation application and the defendant’s stay and restraint applications. There will be orders accordingly.

[15] Not until after the liquidation was filed would it have become apparent that the Companies Act processes would be inappropriate for use.

[16] Today’s hearing was scheduled to deal with the defendant’s applications which also no longer serve any purpose in this proceeding.

[17] In the circumstances, the Court directs that costs lie where they fall.

Associate Judge Christiansen