Zurich Australian Insurance Limited v Cognition Education Limited

IN THE SUPREME COURT OF NEW ZEALAND

SC 58/2013
[2013] NZSC 82

BETWEEN	ZURICH AUSTRALIAN INSURANCE LIMITED T/A ZURICH NEW ZEALAND Applicant
AND	COGNITION EDUCATION LIMITED Respondent

Court:	Elias CJ, McGrath and Arnold JJ
Counsel:	A R Galbraith QC and M J Francis for Applicant M G Ring QC for Respondent
Judgment:	21 August 2013

JUDGMENT OF THE COURT

ALeave to appeal is granted.
BThe approved ground for appeal is:
Was the Court of Appeal correct to conclude that there will be no dispute for the purposes of art 8(1) of the First Schedule to the Arbitration Act 1996 unless the defendant has an arguable basis for disputing the plaintiff’s claim as is sufficient to resist an application for summary judgment?

CThe appeal is to be heard on 9 October 2013 at 10.00 am.

____________________________________________________________________

Solicitors:
DAC Beachcroft New Zealand Limited, Auckland for Applicant
Legal People, Auckland for Respondent

CaseChat Overview and Summary

Zurich Australian Insurance Limited, trading as Zurich New Zealand, appealed to the Supreme Court of New Zealand against a decision of the Court of Appeal, which had found that there was no dispute for the purposes of arbitration under Article 8(1) of the First Schedule to the Arbitration Act 1996 unless the defendant had an arguable basis for disputing the plaintiff's claim sufficient to resist an application for summary judgment. The Court of Appeal had dismissed an appeal from a decision of the High Court that the defendant, Cognition Education Limited, had an arguable case that would defeat an application for summary judgment. The primary issue for the Supreme Court was whether the Court of Appeal was correct in its interpretation of the conditions under which a dispute exists for the purposes of arbitration.

The Supreme Court held that the Court of Appeal's interpretation of the conditions for a dispute to exist for the purposes of arbitration was incorrect. The Court found that the requirement for an arguable basis to resist an application for summary judgment was not the correct test for determining the existence of a dispute. Instead, the Court held that a dispute exists for the purposes of arbitration if there is a genuine issue that needs to be resolved between the parties. The Court of Appeal had placed too much emphasis on the defendant's ability to resist an application for summary judgment rather than on the existence of a genuine issue between the parties. The Supreme Court found that the Court of Appeal had erred in law in its interpretation of the Arbitration Act 1996.

The Supreme Court allowed the appeal and found that the Court of Appeal was incorrect in its interpretation of the conditions for a dispute to exist for the purposes of arbitration. The Court held that a genuine issue between the parties is sufficient to establish a dispute for the purposes of arbitration, regardless of whether the defendant has an arguable basis to resist an application for summary judgment. The Supreme Court found that the Court of Appeal had placed too much emphasis on the defendant's ability to resist an application for summary judgment rather than on the existence of a genuine issue between the parties. The Court allowed the appeal and remitted the matter to the Court of Appeal for reconsideration in light of its decision. The appeal was to be heard on 9 October 2013 at 10.00 am.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established