ICL CONSTRUCTION (2016) LIMITED v IAN ROEBUCK CRANE HIRE LIMITED [2023] NZCA 364

ICL CONSTRUCTION (2016) LIMITED v IAN ROEBUCK CRANE HIRE LIMITED [2023] NZCA 364 [14August 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA66/2023[2023] NZCA 364BETWEEN ICL CONSTRUCTION (2016) LIMITEDApplicantAND IAN ROEBUCK CRANE HIRE LIMITEDRespondentCourt: Courtney and Mallon JJCounsel: G R Grant and T J Rainey for ApplicantI D Matheson for RespondentJudgment:(On the papers)14 August 2023 at 11 amJUDGMENT OF THE COURTA The application for leave to appeal is declined.B The applicant must pay costs to the respondent for a standard applicationon a band A basis with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Mallon J)Background[1] The applicant (ICL) is a construction company. The respondent (Roebuck) isa crane hiring company. ICL and Roebuck entered into an agreement in 2017 underwhich Roebuck provided its services for a construction project ICL was undertaking.At some point ICL stopped paying regular invoices for the use of Roebuck's cranesand a dispute arose over what had been agreed about the price ICL would pay.[2] Roebuck issued proceedings seeking judgment for $64,098 plus interest andcosts. Roebuck's position was that the agreement was that ICL would have a 100 tcrane on site, be charged only for the hours it was used and at the rate applicable forthe size of the crane needed for the job, and with a ten per cent discount. ICLcontended there was a maximum price or estimate for the job of $215,000 and nohourly rates were discussed or agreed. Roebuck's proceeding claimed the differencebetween the total invoiced to ICL and the claimed maximum price of $215,000.[3] By the agreement of the parties, the claim proceeded to a liability only hearingin the District Court before Judge Greig. This had followed discussions between themculminating in correspondence shortly before the hearing. In that correspondence,ICL's counsel advised Roebuck's counsel that, once the liability issue was resolved,the actual quantum would become "virtually academic" and to ask the Court todetermine quantum "would be hugely uneconomic".[4] The Judge found in favour of Roebuck on liability.1 ICL subsequently briefedwitnesses on quantum to seek to challenge quantum at a further hearing on an invoiceby invoice basis of which there were a large number. The Judge struck out the briefsas they contested quantum on a basis that had not been pleaded and that was contraryto the basis on which ICL had contested liability.2[5] The Judge also considered it would be prejudicial to Roebuck to allow ICL toproceed with this challenge to quantum.3 That was because Roebuck would havedifficulties in locating the crane operator and asking him to recall details of each andevery time the crane was used over four years ago.4 Further, if quantum was to havebeen challenged, it would have been far more economic to have one hearing onliability and quantum or Roebuck might have opted for arbitration.5 Roebuck had1 Ian Roebuck Crane Hire Ltd v ICL Construction (2016) Ltd [2021] NZDC 16806 [District Courtliability decision].2 Ian Roebuck Crane Hire Ltd v ICL Construction (2016) Ltd [2022] NZDC 1576 [District Courtevidence decision].3 At [42].4 At [43].5 At [42] and [44].already incurred costs of $30,000 in the litigation and those costs could double if itwas required to respond to this challenge.6[6] The Judge also ordered an interim payment of $60,000 to Roebuck, plus costson a 2B basis and interest.7 This was close to the amount ($65,860.53) the partiesdiscussed before the liability hearing as the difference between the amount ICL hadpaid (on its claim as to what they had agreed) and the amount Roebuck had invoiced(less a credit for some damage to concrete caused by Roebuck). The $60,000 awardedwas intended by the Judge to represent a reasonable proportion of the damagesRoebuck was likely to recover.8[7] Roebuck elected not to proceed with progressing the quantum hearing, issueda statutory demand for the $60,000 award and subsequently filed liquidationproceedings against ICL. ICL appealed the Judge's decision striking out the briefs ofevidence and ordering the $60,000 interim payment. It also applied for a stay ofexecution of judgment which was refused by the High Court.9[8] On appeal to the High Court, Churchman J dismissed the appeal, finding thatstriking out the evidence was correct,10 that barring ICL from raising the unpleadedquantum defence was permissible and appropriate,11 and that awarding the interimpayment, interest, and costs was appropriate.12 ICL then applied to the High Court forleave to appeal against Churchman J's decision. That application was declined.13Application for leave to appeal[9] Leave to appeal is now sought from this Court.14 To be granted leave, theappeal must raise some question of law or fact capable of bona fide and serious6 At [45].7 At [53]-[56].8 At [54].9 ICL Construction (2016) Ltd v Ian Roebuck Crane Hire Ltd [2022] NZHC 1047 [High Court staydecision].10 ICL Construction (2016) Ltd v Ian Roebuck Crane Hire Ltd [2022] NZHC2899 [High Court appealdecision] at [39]–[43].11 At [44]–[48].12 At [49]–[59].13 ICL Construction (2016) Ltd v Ian Roebuck Crane Hire Ltd [2022] NZHC 3440 [High Court leavedecision].14 Senior Courts Act 2016, s 60(2)(b).argument in a case involving some interest, public or private, of sufficient importanceto outweigh the cost and delay of the further appeal.15[10] The key argument for ICL is that the District Court was wrong to strike out itsbriefs of evidence when its statement of defence had denied quantum, it had not agreedto limit its defence to the quantum, Roebuck had the burden of proof on quantum andrule 1.8 of the District Court Rules 2014 (the Rules) did not provide a basis to strikeout the briefs. We are satisfied this does not meet the test for leave.[11] We consider the question of whether it was not open to Judge Greig to strikeout the briefs is a question that is not capable of bona fide and serious argument.Rule 1.8(2) applies if there is a failure to comply with the Rules. It permits the Courtto set aside any step taken in the proceeding and to make any order dealing with theproceeding generally as it thinks just. The failure relied on was that of failing to pleadparticulars of a defence as required by r 5.50. The Judge's approach under r 1.8(2)met the objective of r 1.3 to secure the just, speedy, and inexpensive determination ofthe proceeding.[12] To elaborate, a simple denial of the pleaded quantum did not give Roebuck fairnotice that, if ICL was unsuccessful in its claim that no rates were discussed and therewas an agreed maximum price for the work, it intended to contend in the alternativethat there were a range errors in the invoices, including for example that the wrongcrane tonnage rates had been used. This was particularly so when, in correspondencebetween counsel shortly before the liability hearing, these matters were not raised andinstead it was signalled that any quantum issues would be minor and likely to beresolved informally. It was only after judgment was given on the liability hearing thatICL changed its position as to the basis on which it intended to contest quantum.[13] The notice of appeal also raised whether it was open to the Judge to make theaward of $60,000. However, the submissions clarify that it accepts the order the Judgemade was consequential on striking out the briefs of evidence, and the order is notchallenged except to the extent that it would be set aside if ICL succeeds on an appealconcerning the r 1.8 issue.15 Waller v Hider [1998] 1 NZLR 412 (CA) at 413.[14] This means that there is no question of law or fact capable of bona fide andserious argument. Even if there were, there is no public interest and the limited privateinterest in granting leave, given the small sum at issue and that this would be a secondappeal, is not of sufficient importance to outweigh the cost and delay of a furtherappeal.Result[15] The application for leave to appeal is declined.[16] The applicant must pay costs to the respondent for a standard application on aband A basis with usual disbursements.Solicitors:Grant & Co, Auckland for ApplicantConnect Legal Taranaki, New Plymouth for Respondent