B and T Blind Specialists Rotorua Limited v Pepper

[2013] NZHC 2431

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2011-463-580 [2013] NZHC 2431

BETWEEN

B AND T BLIND SPECIALISTS ROTORUA LIMITED

Plaintiff

AND

CYRIL ROSS PEPPER

Defendant

Hearing:

30, 31 October and 1 and 26 November 2013

Further submissions: 1 February 2013 - 28 August 2013 inclusive

Appearances:

P Mills for Plaintiff Defendant in Person

Judgment:

17 September 2013

JUDGMENT (NO. 3) OF TOOGOOD J [QUANTUM AND COSTS]

This judgment was delivered by me on 17 September 2013 at 4:30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

B AND T BLIND SPECIALISTS ROTORUA LIMITED v PEPPER [2013] NZHC 2431 [17 September 2013]

Introduction

[1] The defendant in this proceeding guaranteed the performance by  the purchaser of a business of obligations arising under the sale and purchase agreement. Those obligations included arrangements to repay vendor finance of $1.4 million. The purchaser of the business defaulted on the repayments and is now in liquidation. In this proceeding the plaintiff pursues the defendant as guarantor.

[2] Although the defendant has now sought to raise issues as to quantum, he has never denied the debt or the default and has accepted that he entered into the personal guarantee. The defendant pleaded, however, that he was induced to execute the guarantee by misrepresentation, breaches of contract and deceit on the part of the plaintiff.

[3] The hearing proceeded, therefore, on the basis that the defendant  would present his case first. The defendant, who was by then not represented by counsel, gave evidence and, subject to the possibility that he might be granted leave to call expert evidence in rebuttal of the plaintiff’s evidence, closed his case.

[4] For the plaintiff, Ms Mills began her opening by seeking to have certain pleadings in the statement of claim struck out on the basis that there was no proof of the allegations. Some parts of the pleadings were struck out. The defendant then declared that he had misunderstood the nature of Ms Mills’s earlier submissions about deficiencies in the proof of his allegations and submitted that, notwithstanding the ruling I had given, proof of the allegations in part of his pleading was provided by copies of invoices adduced in evidence. It then became clear that the defendant also wished to re-open his case to call further evidence in response to the deficiencies identified by counsel for the plaintiff.

[5] The hearing was adjourned part-heard and set down for a hearing of argument about whether the defendant should be permitted to rely upon documents contained in the agreed bundle but not referred to by him in evidence and to give further evidence.

[6] In an interlocutory judgment dated 18 December 2012,1 I held that  the defendant had been given adequate assistance to understand that he carried the onus of proving his case and that he could not expect to be in a position to prove his claims by relying solely upon receiving favourable answers from the plaintiff’s witnesses in cross-examination. I determined that to allow the defendant a further opportunity to give evidence and rectify omissions identified by the plaintiff’s counsel would be to the unfair detriment of the plaintiff by unjustifiably assisting the defendant with the better prosecution of his case. I ruled, however, that it was open to the defendant to point to evidence contained in the agreed bundle of documents, principally in the form of invoices, notwithstanding that they had not been referred

to and, therefore, had not been received into evidence.2

[7] After receiving further submissions from the  parties,  in  which  Ms Mills applied for judgment on behalf of the plaintiff I issued a second interlocutory judgment on 5 July 2013.3 I held that the evidence adduced by the defendant fell well short of proving any basis for disallowing the plaintiff’s claim under the guarantee.   I also determined that there was insufficient evidence to support the

counterclaim for damages which might otherwise have been set off against the sums owed to the plaintiff by the defendant. I then made directions for determining the amount for which judgment for the plaintiff should be entered.

Submissions

[8] I have now received further submissions from Ms Mills and Mr Pepper as follows:

(a)plaintiff’s memorandum as to quantum and costs (31 July 2013);

(b)defendant’s  memorandum  replying  on  both  quantum  and  costs (23 August 2013);

(c)plaintiff’s memorandum in reply (26 August 2013); and

1       B and T Blind Specialists Rotorua Ltd v Pepper [2012] NZHC 3480.

2       See High Court Rules, r 9.14(4) and (5).

3       B and T Blind Specialists Rotorua Ltd v Pepper [2013] NZHC 1713.

(d)defendant’s      memorandum     in     response      to     plaintiff’s     reply (28 August 2013).

[9]    As requested by me in a Minute dated 17 July 2013, the plaintiff has provided by memorandum a revised calculation of the sums owed by the defendant under the personal guarantee as at 31 July 2013. Judgment in the sum of $1,295,000, plus interest of $472,289.37 is sought, those sums being the amounts said by the plaintiff to be owed as at 31 July 2013.   The interest calculation was made at a rate of

10.5 percent per annum, being the penalty interest rate which the defendant admitted was applicable in terms of the guarantee.

[10] Also in terms of the contractual provisions in the guarantee, the plaintiff claims costs on a solicitor/client basis. The costs claimed amount to $164,508.42 and disbursements of $5,523.03, both sums being inclusive of GST.

[11]   As to quantum, Mr Pepper asserted that he was unable to verify the accuracy of the plaintiff’s claim and that he was endeavouring to obtain further records. He challenged the calculation of costs and disbursements, including the basis upon which GST had been calculated.

[12] In her reply, Ms Mills observed that at a telephone conference on 11 July 2013 the defendant had accepted the plaintiff’s calculation of the quantum owing under the personal guarantee as at the hearing date after taking into account payments made by him or on his behalf. The defendant had also accepted that those calculations needed revision to bring them up to date but Ms Mills complained that the defendant’s memorandum included matters venturing into “new unpleaded territory.”

[13] Nevertheless, Ms Mills addressed the issues raised in the defendant’s memorandum and in particular addressed the basis upon which the interest calculation had been made.

[14] Ms Mills also objected to the defendant’s allegations as to the way in which costs had been calculated, protesting that the defendant’s submissions were based on

allegations of what might be said to be, at least, an unprofessional approach by both counsel and her instructing solicitors.

[15] Mr Pepper responded to the plaintiff’s reply memorandum, maintaining that further work was needed. He recommended that he should be permitted to meet the plaintiff’s accountant, Mr Wild, to review the payment dates and calculations and make any adjustments.

Decision

[16] I am not prepared to permit the defendant to re-open the case in the manner now sought. In his pleadings, the defendant accepted liability for the debt and did not dispute the terms of the guarantee and sums pleaded. All that was required, following the second interlocutory judgment in which I dismissed the affirmative defences and held the defendant to be liable to the plaintiff under the guarantee, was for the amounts owing to be updated from those which the defendant accepted had been accurately identified at the time of the hearing. The amount of interest incurred since the hearing needed to be calculated in accordance with the provisions of the guarantee. I am satisfied that Ms Mills has properly represented the position in her memoranda.

[17] As to costs, I am satisfied that the plaintiff’s costs, while substantial, are not unreasonable, bearing in mind the considerable difficulty faced by Ms Mills as counsel opposing a self-represented litigant. This case has taken much more of the Court’s and the parties’ time than would have been the case had Mr Pepper not prolonged it by seeking to call additional evidence at a time when Ms Mills pointed out the deficiencies in the proof of his allegations.

[18] The amount owing as at 31 July 2013 as unpaid principal and interest under the deed of guarantee is $1,767,289.37. I enter judgment for the plaintiff in that sum. The plaintiff is entitled to interest on the unpaid portion of the judgment which is to be calculated at a rate of 10.5 percent per annum on the outstanding balance until the judgment is satisfied.

[19]     The plaintiff is entitled to costs on a solicitor/client basis in terms of the contractual arrangements between the parties.  The defendant is to pay the plaintiff

$164,508.42 in costs and a sum of $5,523.03 for disbursements.

.........................................

Toogood J