MADILL & SMEED LIMITED AND ANOR V EBERT CONSTRUCTION LIMITED AND ORS HC AK CIV-2006-404-882

MADILL & SMEED LIMITED AND ANOR V EBERT CONSTRUCTION LIMITED AND ORS HC AK CIV-2006-404-882

The contractual preconditions in NZS3910 clause 13 (timely referral to the Engineer within one month of the Final Payment Certificate) had not been met so Ebert had no contractual right to compel arbitration; it was not appropriate to imply a term permitting late referral for latent defects because that would...

Source-derived case information.

Citation
openlaw-291e9acf_5763_41f6_9e92_3a2688741f78.pdf
Parties
First Plaintiff: Madill & Smeed Limited; Second Plaintiff: Halls Refrigerated Transport Limited; First Defendant: Ebert Construction Limited; Second Defendant: Stiles & Hooker Limited; Third Defendant: Cowperthwaite Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
9 August 2006
Procedural Posture
Construction Contract Dispute (arbitration and Stay Applications) / Interlocutory Applications (application for Stay and Application for Extension of Time to Commence Arbitration)
Outcome
Application for stay of proceedings dismissed; application for extension of time to commence arbitration proceedings dismissed; costs awarded to plaintiffs
Legal Topics
Arbitration Clause Compliance, Time Limits for Dispute Referral, Implied Contractual Terms, Stay of Proceedings, Extension of Time Under Arbitration Act Second Schedule (clause 7)
Contract Law Arbitration Law Construction Law Civil Procedure Arbitration Clause Compliance Time Limits for Dispute Referral Implied Contractual Terms Stay of Proceedings +1 more

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Parties

Madill & Smeed Limited

First Plaintiff

Halls Refrigerated Transport Limited

Second Plaintiff

Ebert Construction Limited

First Defendant

Stiles & Hooker Limited

Second Defendant

Cowperthwaite Limited

Third Defendant

Procedural Posture

Construction Contract Dispute (arbitration and Stay Applications) / Interlocutory Applications (application for Stay and Application for Extension of Time to Commence Arbitration)

Legal Issues

  1. 1 Whether Ebert complied with NZS3910 clause 13 preconditions (referral to Engineer within one month) and so has a contractual right to refer dispute to arbitration
  2. 2 Whether a term can be implied into clause 13 to allow referral for latent defects after the one month period
  3. 3 Whether the Court should extend time under clause 7 of the Second Schedule to the Arbitration Act 1996 on grounds of undue hardship

Ratio Decidendi

The contractual preconditions in NZS3910 clause 13 (timely referral to the Engineer within one month of the Final Payment Certificate) had not been met so Ebert had no contractual right to compel arbitration; it was not appropriate to imply a term permitting late referral for latent defects because that would improperly remake the parties' contract and is neither just nor obvious; Ebert failed to show undue hardship warranting an extension of time under clause 7 of the Second Schedule to the Arbitration Act 1996; accordingly both the application for a stay and the application for extension of time were dismissed.

Court Disposition

Application for stay of proceedings dismissed; application for extension of time to commence arbitration proceedings dismissed; costs awarded to plaintiffs

Orders

  • Dismissal of Ebert Construction Limited's application for a stay of the High Court proceedings to enable arbitration
  • Dismissal of Ebert Construction Limited's originating application for an order extending the time for commencement of arbitration proceedings under the Arbitration Act 1996 Second Schedule clause 7