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High Court considers repudiation claim for contract incorrectly describing building company as ‘master builder’

2 Jun 2023

| Author: Heidi Bendikson

Application for summary judgment and continuation of freezing orders – applicable principles – repudiation – r 32.7(3) of the High Court Rules 2016

conflicts of evidence

Ecosmart Homes Northwest Limited v Jenhash Contracting and Consultants Limited [2023] NZHC 1183

Ecosmart Homes Northwest Limited had been carrying out a residential development in Helensville. It had engaged Jenhash Contracting and Consultants Limited to construct 26 homes for development.

Ecosmart sent notices of cancellation to Jenhash, saying the 26 house-build contracts were cancelled on grounds of repudiation by Jenhash. Ecosmart claimed Jenhash had breached an essential term of their contract by not being a registered master builder, contrary to a notation on the front page of the contracts. Ecosmart also claimed Jenhash repudiated the contracts by saying it would not be turning up to the site.

The purported cancellation came about after concerns were raised by Ecosmart’s principal about another project in which he and Jenhash were involved.

Ecosmart now seeks summary judgment for the return of its deposits and damages from Jenhash. It also seeks an extension of a freezing order in respect of Jenhash’s assets.

Applicable principles – threshold for summary judgment – whether factual dispute as to repudiation – High Court found there was a factual dispute as to whether Ecosmart knew Jenhash was not a registered master builder – arguable that statement on front page of contracts (the only reference to master build registration) did not constitute a contractual term – High Court found freezing order should continue – High Court noted that, while Ecosmart had not proved case to summary judgment standard, it has an arguable case – High Court determined any damages likely to amount to $320,000 and set freezing order at $400,000.

Held: Application for summary judgment dismissed. Application for continuation of freezing order granted.

Eco-Smart Homes v Jenhash

 

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