BuildLaw: In Brief 26.01.2010

Welcome to the first edition of BuildLaw:In Brief™ for 2010.

Included in this edition are commentaries and judgments of interest in relation to recent cases involving whether or not an adjudicator has the power to determine his or her own jurisdiction, the extent to which a district court may review an adjudicator’s determination in respect of an application by an owner for review under s52, set-off and abatement in the context of an application for summary judgment arising out of a civil works contract, and a summary judgment application by an owner where there was no valid payment schedule.

In the High Court in Auckland last week, the court was asked to grant an interim injunction in Origin Energy resources (Kupe) Ltd v Tenix Alliance New Zealand & Anor preventing Tenix and the Adjudicator from proceeding with an adjudication on the basis that the Adjudicator did not have jurisdiction to determine the dispute because the parties to the construction contract had agreed to refer disputes between them to arbitration and the arbitration is an international arbitration.  The Court declined to grant the application for an injunction and held that the appropriate procedure was for the appointed adjudicator to continue to determine the issue of jurisdiction as he thinks fit and for any party dissatisfied with that determination to then come back to the High Court on an application for judicial review when the Court will have the benefit of the Adjudicator’s determination and the reasons for it.

In the continuing saga involving HEB v Redhill (See earlier judgments: HEB v Redhill Nov 2008; Redhill v HEB & Ors Nov 2009), Redhill applied for a review of the Adjudicator's determination in respect of non-respondent owners. The Court declined to review the determination on the basis that its powers of review under sections 52-54 of the Act are not unlimited or general but are limited to considering disputes in relation to whether an owner who is not a respondent is an associate and thus jointly and severally liable to make a payment to the claimant and the approval for the issue of a charging order.

In Oropi v A & R Bethlehem Heights Ltd, the Court considered an appeal from an applicant for summary judgment arising out of a civil construction contract.  This case contains an interesting review of the law related to set-off and abatement.

In Ainsworth & Collinson Ltd v GJ & LD Edmunds the Court considered an application to set aside a statutory demand.  The facts of this case are unusual as it was the home owners who were seeking summary judgment against the builder.  The Court set aside the demand as the architect had failed to respond to a valid payment claim with a payment schedule so that the full amount of the claim was due in full.  This meant that the deductions purported to be made by the homeowner were of no consequence and there was simply no debt owing to them.

We hope you find these decisions interesting and useful in your practice or business. We are grateful for your support and a special thanks to those of you who have sent us copies of decisions as soon as they are delivered by the Courts – they are important and we are pleased to report them and distribute them for the benefit of all. So please simply email any judgments in cases that you are involved with to registrar@buildingdisputestribunal.co.nz

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under section 65 of the Construction Contracts Act 2002