Maclean v Stewart T/a Andrews Contracting CA288/96, 20 August 1997
- Court
- Court of Appeal
- Judgment
- 20 August 1997
Areas of law
Judgment analysis
AI-generated summary
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Facts
The parties entered into a building contract in January 1994. Disputes arose over the quality of workmanship, leading the appellants to withhold payments. The appellants took possession of the house in November 1994. After failed attempts at arbitration, the respondent builder applied for summary judgment in September 1995. The District Court granted the appellants' application for a stay for arbitration but allowed the respondents to proceed with summary judgment for any amount not in dispute. The District Court entered judgment for the respondents for $98,877.42. The appellants appealed to the High Court, where Salmon J reduced the judgment sum to $87,303.68. The appellants were granted leave to bring a second appeal to the Court of Appeal.
Held
- In a summary judgment application, the onus is on the plaintiff to satisfy the court that the defendant has no defence, and that onus does not shift. A court must not resolve competing claims on their merits or reject expert evidence out of hand, as its sole task is to determine whether a tenable defence has been raised.
- Where a defendant provides itemised expert evidence asserting that the cost of remedying alleged defects exceeds the sum claimed by the plaintiff, this constitutes a tenable defence that no money is owing, making the matter unsuitable for summary judgment.
Orders
The appeal is allowed. The costs orders made in the District Court and the High Court are vacated. Costs of $3,500 are awarded to the appellant in the Court of Appeal, plus disbursements and travelling expenses.
Key passages5
For summary judgment to be granted, the plaintiff must satisfy the Court that the defendant has no defence to the claim.
“Rule 136 of the High Court Rules is plain in its terms. The plaintiff must satisfy the Court the defendant has no defence to a claim. Only then can the Court give summary judgment against a defendant.”
In a summary judgment application, the court's sole task is to decide whether it is satisfied the defendant has no defence; it is inappropriate for the court to be drawn into the merits of the claim and seek to resolve competing issues between the parties.
“we are left with the impression that the learned Judge in the Court below was drawn into the merits of the claim and sought to resolve the competing issues between the parties when his sole task was to decide whether he was satisfied the appellants had no defence.”
A defendant cannot escape summary judgment by raising a false, hypothetical or frivolous defence.
“We acknowledge, of course, that a denial of liability in general terms is of itself unacceptable. The defendant cannot escape liability for summary judgment by raising a false, hypothetical or frivolous 'defence' and then contend that the Court cannot be satisfied that he or she has no defence.”
The onus in a summary judgment application is on the plaintiff to satisfy the court the defendant has no defence, and this onus does not shift to the defendant.
“There is no question but that on a summary judgment application the onus is on the plaintiff to satisfy the Court that the defendant has no defence. That onus does not shift.”
The doctrines of res judicata or issue estoppel prevent a party from re-litigating in arbitration issues that have been determined by a summary judgment.
“It was conceded by Mr Samuel, however, that this could not be the case. The doctrines of res judicata or issue estoppel would apply to preclude the appellants from pursuing any claim they do not owe the monies included in the summary judgment on the basis that the respondents' workmanship is faulty or in respect of the defects in the building.”
Cases mentioned in judgment
Legislation mentioned
- Arbitration Act 1908, s 5
- High Court Rules, Rule 136