(a) the owner must pay the Registered Master Builder all sums due and owing under the Contract, plus any damages, costs, expenses or loss of profit of the Registered Master Builder arising out of the termination of the Contract; and
(b) the Registered Master Builder shall have no further obligations to the Owner under the Contract.
Following the adjudicator’s decision, CLH sought to enforce the adjudicator’s determination by summary judgment in the District Court pursuant to s59 of the Act. Section 59(2)(a) of the Act provides that a party who is owed an amount determined by an adjudication under s48(1)(a) may recover the sum as a due debt in any Court. Mr Clark opposed summary judgment.
CLH’s application for summary judgment was granted.1 The District Court held the adjudicator had made a finding of repudiation and cancellation of the contract, and that pursuant to clause 49 CLH was entitled to certain sums and damages in such an event.2 As a result, the Court found the adjudicator was acting under s48(1)(a) of the Act, and that Mr Clark’s continued dispute of the factual issues did not affect CLH’s entitlement to enforcement of the adjudicator’s determination under s59.
Mr Clark appealed on three grounds. First, that the adjudicator’s determination was made under s48(1)(b) which could not be enforced under s59 by way of summary judgment. Mr Clark argued an adjudicator only has power to determine liability for payment under the contract, and that any such claim for sums due and owing under the contract was to be contrasted with a claim for damages, costs, expenses or loss of profit arising out of the termination of the contract. Mr Clark claimed the latter was not a right to payment under the contract, but was rather, liability imposed by common law to pay damages, and thus did not fall within an adjudicator’s powers of determination. Mr Clark further submitted that the same distinction is reflected in the Act in relation to determinations made pursuant to s48(1)(a) and s48(1)(b).3
Second, that the factual disputes between the parties required a defended hearing, and finally, that if neither of those grounds were successful, that the Court should not enter summary judgment against him in exercise of its residual discretion.
Decision
The High Court upheld the District Court’s decision and the adjudicator’s determination, and dismissed Mr Clark’s appeal against summary judgment. In making his decision, Mander J considered the importance of remembering the purpose of the Act, to provide a speedy mechanism for the resolution of construction contract disputes to enable contractors to obtain payment and ensure cash flow before the final resolution of issues.4
Author: Sarah Redding
Recent University of Otago Law School graduate, Sarah is currently working as a clerk at the New Zealand Dispute Resolution Centre.