BBC Technologies Limited v Sociedad Agricola Topagri Ltda
[2013] NZHC 1375
•11 June 2013
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2012-419-001306 [2013] NZHC 1375
BETWEEN BBC TECHNOLOGIES LIMITED Plaintiff
ANDSOCIEDAD AGRICOLA TOPAGRI LTDA
Defendant
Hearing: 2 May 2013
Appearances: M Pascariu for Plaintiff
S J Corlett for Defendant
Judgment: 11 June 2013
JUDGMENT OF ASSOCIATE JUDGE OSBORNE [as to plaintiff's summary judgment application]
Introduction
[1] The plaintiff (“BBC”) is a New Zealand manufacturer and supplier of
equipment used in fruit production and processing.
[2] The defendant (“Topagri”) is a distributor of such products in Chile.
[3] Between 2006 and 2008, BBC and Topagri had an agreement whereby Topagri distributed BBC’s products in Chile on an agency basis (called by the parties the Distributor’s agreement).
[4] BBC continued to supply goods to Topagri after the agency agreement came to an end from January 2008.
BBC TECHNOLOGIES LIMITED v SOCIEDAD AGRICOLA TOPAGRI LTDA [2013] NZHC 1375 [11 June
2013]
[5] In this proceeding, BBC seeks judgment against Topagri in the sum of US$882,300 for what, BBC says, is the balance owing in relation to supply contracts between November 2009 and December 2010.
[6] Before me is BBC’s application for summary judgment in the sum of
$344,145.86.
[7] In his affidavit in support of the summary judgment application, Geoffrey Furniss, a director of BBC, explained why BBC was seeking judgment only for that portion of the claimed debt. He deposed:
BBC is seeking judgment only for that part of its claim, being US$344,145.86, which is acknowledged as due and owing by Topagri according to its own calculation.
[8] Topagri opposed the application for summary judgment and has also filed, as it is entitled to, a statement of defence and counterclaim. It asserts that the “acknowledgement” of debt on which BBC relies was based upon incomplete and outdated information which did not include some transactions, payments and expenses. Topagri says it has an equitable set-off for lost revenue as a result of BBC’s contractual breaches in a sum which exceeds BBC’s summary judgment claim. Topagri’s sole director and owner, Franck Baumelou provided Topagri’s evidence in opposition. He explains why he now challenges the previously acknowledged debt. He asserts a counterclaim of $766,301 calculated by reference to gross revenue which Topagri allegedly lost.
[9] In March 2013, Mr Furniss filed a reply affidavit responding to Mr Baumelou’s evidence and asserting again that he believed that Topagri has no arguable defence to a claim for $344,145.86.
[10] BBC’s position in relation to the claim had changed by the time Mr Pascariu, for BBC, filed his submissions in April. Mr Pascariu provided a recalculated table of calculations, which would reduce the (summary judgment) total to $240,629. So far as the application claimed summary judgment above that sum, it was abandoned to that extent. Implicitly, the plaintiff acknowledges that Topagri in fact has an
arguable defence for approximately $104,000 of what Mr Furniss had one month earlier confirmed was debt that was recoverable beyond argument.
[11] By this summary judgment application, the Court is required to determine whether the defendant has no tenable argument in relation to an accounting exercise which ultimately depends on the correct accounting for numerous transactions over a three-year period beginning in January 2008.
Expression of currency
[12] The BBC claim is expressed in United States currency, as were the dealings between the parties. In this judgment, all references to dollar amounts are to United States currency unless they are stated to be New Zealand currency.
Plaintiff ’s summary judgment application – the principles
[13] The starting point for a plaintiff’s summary judgment application is r 12.2(1) High Court Rules, which requires that the plaintiff satisfy the Court that the defendant has no defence to any cause of action in the statement of claim or to a particular cause of action.
[14] I summarise the general principles which I adopt in relation to this application:
(a) Commonsense, flexibility and a sense of justice are required.1
(b)The onus is on the plaintiff seeking summary judgment to show that there is no arguable defence. The Court must be left without any real doubt or uncertainty on the matter.
(c) The Court will not hesitate to decide questions of law where appropriate.
1 Haines v Carter [2001] 2 NZLR 167 (CA) at [97].
(d)The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.
(e) In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.
(f) In assessing a defence, the Court will look for appropriate particulars and a reasonable level of detailed substantiation.
(g)In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.
(h)Where a last-minute, unsubstantiated defence is raised and an adjournment would be required, a robust approach may be required for the protection of the integrity of the summary judgment process.
(i)Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment, but does so in the context of the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.
The factual issues in this case
[15] Applying the principles in relation to summary judgment applications to this case, the Court is not entitled to proceed on the basis that an acknowledgement of debt previously made by Topagri is the conclusive evidence required for summary judgment. Mr Baumelou has deposed why his previous reconciliation was inaccurate and the Court is required to consider all the evidence, not only the earlier acknowledgement.
[16] The issues which I must determine are these:
(a) Has BBC satisfied the Court that Topagri has no reasonable argument as a minimum of $240,629 being a balance owing by Topagri under a running account?
(b)If the plaintiff has established that Topagri has no arguable defence to all or some of the $240,629, then has Topagri nevertheless an arguable set-off as to some or all of that amount?
The contractual relationship
[17] For the period between January 2006 and January 2008, BBC and Topagri were parties to a written contract which they called the “distributor’s agreement”. The contract was terminated in January 2008.
[18] After that time, the parties continued to deal with one another on a contractual basis. The parties agree that from 11 January 2008 there were successive supply contracts which were partly oral and partly written. BBC supplied and Topagri purchased equipment. Some items of equipment were purchased by Topagri without any implication of rental. Other equipment purchased by Topagri was purchased in order to be rented to third parties. Such equipment was to be sold to Topagri at 80 per cent of BBC’s Recommended Retail Price, with Topagri having the right to require BBC to purchase the equipment back after a period (usually the end of the fruit season) at the recommended retail price less 80 per cent of the funds which Topagri had derived from renting out the equipment.
[19] Each transaction was initially effected by:
(a) Topagri submitted a written Purchaser Order to BBC identifying the equipment requested and recording the price as understood by Topagri (always to be in US$) and any net price that Topagri anticipated (having regard to equipment rental).
(b)BBC would issue a Customs Invoice identifying by description and serial number the item to be sold pursuant to an order and identifying the price in US currency.
(c) Towards, or at the end of, the fruit season there would be an accounting between the parties in relation to the rental arrangement referred to at [18] above. Then the final payment would be made in respect of the order by Topagri.
Disputed arrangements
[20] Some aspects of the arrangements between the parties are disputed.
Customer discounts
[21] First, Topagri through Mr Baumelou asserts that, in relation to two named Topagri clients (San Jose Farms and Hortifruit Virquenco), BBC agreed to additional discounts flowing on from a 10 per cent discount received in earlier seasons. Mr Baumelou also asserts that BBC agreed to meet the customs charges in relation to goods shipped to Chile through a named company (Mondiale).
[22] The documentary evidence from earlier seasons does indicate that discounts were previously given, for instance in relation to San Jose. It is not possible to resolve in the context of a summary judgment application whether the parties had agreed (whether expressly or implicitly) that such discounts should continue or not. Mr Pascariu for the plaintiff, in oral submissions, accepted that for summary judgment purposes the discounts claimed by Topagri had to be treated as arguable. The sum involved is $80,534.56. (Mr Pascariu, in the table provided in his written submissions, (Table 2 below at [72]) allowed a total of only $36,179 (comprising
$2,813, $1,446 and $31,920) but the arguability of all discounts means that the full figure of $80,534.56 must be allowed in this context).
Customs charges
[23] Secondly, in relation to customs charges for freight involving Mondiale, Mr
Baumelou exhibited email correspondence by BBC’s Ms Taylor in December 2010
indicating an understanding that BBC expected to pay for all freight charges
(excluding duties and taxes). Contrary to what Mr Baumelou’s affidavit implies, the
2010 correspondence does not evidence any understanding or agreement that BBC
would meet Topagri’s customs charges, “duties, and taxes” being expressly excluded.
[24] However, Mr Baumelou also referred to a later (2013) email from BBC’s Ms Taylor, in which she referred to import-related costs of “US$38k” which BBC accepted Topagri had met over the previous three seasons. Counsel have since quantified, for the purposes of this hearing, a precise sum by way of freight-related costs of $38,308.07. Mr Pascariu has accepted that for the purposes of the summary judgment hearing, it is at least arguable, that the $38,308.07 should be deducted.
Reimbursement of Topagri’s expenses
[25] Thirdly, Topagri asserts that there was a contractual arrangement requiring BBC to reimburse to Topagri any additional costs incurred by Topagri in purchasing BBC’s equipment such as freight costs. Without explaining the contractual basis upon which such expenses should be credited to Topagri, Mr Baumelou deposes that a sum of $88,393.08 was incurred by Topagri for expenses during the 2010 and 2011 period and that BBC has failed to take that sum into account.
[26] In his reply affidavit, Mr Furniss deposes that BBC never agreed to meeting the expenses referred to by Mr Baumelou.
[27] A factual dispute as to the oral terms of an agreement would normally be unresolvable in a summary judgment context. However, in this case, Topagri has not laid any proper evidential foundation as to its entitlement to reimbursement or credit for expenses. Mr Baumelou does not identify any of the circumstances which would be needed for such an agreement such as identification of the people who reached the agreement, the approximate timing of any such agreement, and its terms. Topagri’s suggestion of an entitlement to reimbursement of expenses is, in this case, a mere assertion and it is to be disregarded on that basis.
[28] There must be serious doubt as to the credibility of a suggestion that BBC
was agreeing to meet such expenses as Topagri’s “technicians in Canada”. The
parties had left behind a relationship through an distribution or agency agreement back in January 2008. From that time, they were simply doing business with one another. BBC was no longer the principal or manufacturer. Nor was Topagri simply the distributor or agent.
Timing of required payment
[29] Fourthly, the precise time by which payment was to be made is not altogether clear on the evidence. The precise time requirement is, however, not an issue in the proceeding as a reasonable time for payment (if there is payment to be made) has long passed. For the purposes of the summary judgment application, Mr Pascariu, for BBC, recorded that BBC was content to sell the equipment on credit on the agreement that payment was to be made by the end of the fruit season for which the equipment was supplied.
Specific costs
[30] Fifthly, there were some specific costs and errors which Mr Baumelou asserts had been incurred or arisen in relation to the importation of goods which were to be met by BBC. They are identified in a table provided by Mr Furniss in his evidence and largely adopted by Mr Pascariu as part of his written submissions. (Table 2 below at [72]). I use Mr Furniss’s exact figures –
- Letter of credit application fees + interest $16,712.65
- July 2011 export and BBC $682.16
- Other machine related costs $1,599.98
- 2010 costs not advised $4,827.87
- 2008-2010 costs with changed values $328.77
- BioFruit customs invoice error $38,308.07
TOTAL $62,459.50
[31] Mr Furniss, in his affidavit, and Mr Pascariu, in submissions, accepted (through his Table 2 concession) that the BBC summary judgment claim had to take these figures into account as arguable.
Spare parts
[32] Sixthly, Mr Baumelou included at the end of his amended spreadsheet (lines
575-601) a sum of $34,228.85 for “spare parts”.
[33] Although he specifically addresses in his narrative evidence various expenses and charges he has introduced to the amended spreadsheet, he does not give any explanation for the “spare parts” adjustment. Equally, Mr Corlett did not address it in his submissions.
[34] Mr Pascariu accordingly in his Table 2 (below at [72) treated the “spare parts” figure of $34,228.85 as to be included in the minimum sum beyond dispute. I accept that approach as correct. Topagri has, at most, made a bare assertion of set- off in this regard.
Supply “on request”
[35] The seventh issue as to contractual terms arises from Topagri’s assertion that BBC was required to supply equipment to Topagri upon request by Topagri. Mr Baumelou, in his evidence, makes only the barest suggestion of such an agreement. Late in his affidavit he deals with the allegation of an obligation to supply equipment upon order in conjunction with an allegation about non-competition (which I will come to shortly). Mr Baumelou deposes:
… in clear breach of the agreement that BBC would not deal with Topagri’s clients and without Topagri’s agreement or consent and BBC would supply equipment upon order (see paragraph 19 above), BBC dealt direct with Topagri’s clients and supplied them with this equipment [which Topagri had ordered to supply to the clients].
[36] In the earlier paragraph to which Mr Baumelou refers in the quote above, there is no reference to any contractual undertaking by BBC to supply equipment upon order. Rather, that paragraph is concerned with allegations that there was a
non-competition agreement and the alleged agreement which I have referred to as to reimbursement of expenses.
[37] The allegation of an undertaking to supply equipment upon order is again a bare assertion and is to be disregarded in the context of this summary judgment application. There is the suspicion from the way in which Mr Baumelou has referred to “supply equipment upon order” late in his affidavit, that he may have inferred such a proposition from what he asserts to be a non-competition agreement. That will ultimately be a matter for determination at trial. Commercially, it appears to be an unlikely term when the parties had moved away from a distribution agreement and were simply trading on order by order. As well as failing to provide any detail as to the way in which the alleged agreement came into existence, Mr Baumelou does not explain commercially why BBC would tie itself into such an open-ended, yet committed relationship. If there had been a properly arguable case as to a duty to continue supplying goods as ordered, such would be relevant only to Topagri’s asserted set-off or counterclaim. It could not alter the correct calculation of any balance owing by Topagri to BBC for the goods actually provided.
Non-competition
[38] The eighth disputed term involves Topagri’s assertion that as part of the trading relationship, it was agreed between Topagri and BBC that BBC would only deal with Topagri direct and would not solicit and/or procure any of Topagri’s clients. In his affidavit, Mr Baumelou does not identify the people involved in such agreement or its date.
[39] In his affidavit in reply, Mr Furniss deposes that he categorically denies the additional terms of contract asserted by Mr Baumelou.
[40] Given the bare assertions that Mr Baumelou makes in relation to some of the alleged terms, I accept that there was little more, if anything, which Mr Furniss could do by way of reply affidavit. Topagri has not given Mr Furniss any proper detail of an alleged contract to reply to.
[41] BBC’s reply on these issues therefore comes through Mr Pascariu’s submissions. The unsatisfactory nature of Topagri’s evidence in support of an alleged non-competition undertaking by BBC is reinforced, as Mr Pascariu submitted, by reference to the written distributor’s agreement which the parties had in place between 2005 and 2008 when Topagri was BBC’s distributor. Mr Furniss exhibited the distributor’s agreement which is a comprehensive commercial agreement. In that agreement, the parties specifically dealt with non-competition by clause 16. That provided:
16. Non Competing
The Distributor agrees not to compete in any territories with any competing product(s) for the duration of three months beyond the completion of this Agreement.
[42] The distributor’s agreement contained no clause by which BBC undertook not to compete, either during the term of any relationship or for any period thereafter.
[43] Given the express way in which the parties were to deal with customers during the subsistence of the distributor’s agreement, Topagri’s proposition that BBC accepted in some undefined way a commitment not to compete or to deal with customers after the distributor’s agreement expired, appears weak. As with the suggested term relating to acceptance of orders, a term as to non-competition would have relevance only to the Topagri set-off or counterclaim. It could not affect (other than by way of set-off) the correct calculation of the balance for goods supplied.
The calculation of the balance of the account
Introduction
[44] The central issue is the correct balance of the account between BBC and
Topagri.
[45] Some background is relevant although it cannot, in the context of a summary judgment application, be determinative of matters relating to the precise calculation of the account.
[46] It is common ground that the trading relationship between the parties from January 2008 involved an element of credit in that most payments were to be made towards or at the end of the fruit season. Mr Furniss explains that payment was made by Topagri (in relation to rented equipment) as and when Topagri itself was paid by its client as the end purchaser.
[47] Mr Furniss deposes (and Mr Baumelou does not dispute his account in this regard) that Topagri did not pay a substantial part of the purchase price for equipment delivered in 2010 so that by the first half of 2011 there was a substantial debt balance. BBC made a series of demands for payment of what it claimed to be the outstanding balance. BBC began to insist on letters of credit for machines delivered.
[48] In June 2011, Mr Baumelou of Topagri supplied to BBC a five-page A3 spreadsheet which included a breakdown of the equipment supplied by BBC (“the June 2011 spreadsheets”). The spreadsheet set out Mr Baumelou’s own calculation of the debt which Topagri owed to BBC. He showed the balance of the debt as
$325,303.23.
[49] Mr Furniss noted within the June 2011 spreadsheet two sets of costs which
Topagri was setting off against its debt, namely: (a) $38,308.07 customs charges;2 and
(b) $80,534.56 by way of discounts given by Topagri to its customers.3
[50] It was Mr Furniss’s evidence that BBC had not agreed to reimbursement of such expenses. Upon the basis of reintroducing the customs costs and discount figures to the balance, Mr Furniss recalculated Topagri’s acknowledged balance to
$444,145.86.
2 Above at [23]-[24].
3 Above at [21]-[22].
[51] For the purpose of the summary judgment proceeding, Mr Furniss and BBC then deducted from that sum a total of $100,000 which Topagri had made by two payments in September and October 2011.
[52] Allowance for those repayments brought BBC to the figure of $344,145.86 which it claims under its summary judgment application as the sum indisputably owing.
The relationship ends
[53] In 2011, Topagri and BBC had been discussing the possibility of a formal joint venture agreement to replace both their earlier distribution agreement and their current relationship.
[54] Between July and October 2011, Topagri placed further purchase orders with BBC. During that period, BBC was demanding payment of the full balance on previous years’ business together with full payment of current orders. BBC threatened to charge interest at 20 per cent per annum on outstanding accounts. In August 2011, BBC advised Topagri that it was no longer moving towards a formal joint venture arrangement.
[55] In October 2011, when delivery of some ordered shipments was imminent, BBC wrote to Topagri insisting upon a payment programme which would have seen
$323,160 repaid by March 2012.
[56] On 24 October 2011, a lawyer acting for Topagri wrote to BBC in response to the demand for payment. The lawyer referred to “disputes… regarding the distribution agreement” of 2005. The lawyer then stated:
After a thorough review of the Distribution Agreement, correspondence and emails exchanged between the parties, we consider that BBC position is arbitrary. Indeed, we deem that BBC has acted disloyally and has no right to claim any payment to Topagri. Thereby, the inappropriate conducts of BBC and the damages caused to Topagri are much greater than the payment requested by BBC.
In order to provide a proper service for the client and to avoid litigation between BBC and Topagri, we hereby propose to execute a release agreement between BBC and Topagri.
[57] In response to that position, BBC on 27 October 2011 terminated all credit to Topagri and demanded full payment of all outstanding debt immediately. BBC did not deliver the ordered equipment. It instead dealt directly with the intended customers to effect the sale of that equipment.
[58] BBC subsequently proposed to Topagri that there be a mediation (in Chile), but Topagri did not agree to that request.
[59] In September 2012, BBC commenced this proceeding.
The “acknowledged balance” revised
[60] At the point the proceeding was issued, BBC sought summary judgment for
$344,145.86 upon the basis that that sum represented what Topagri had acknowledged to be owing as at June 2011 but with:
(a) deduction of $100,000 for Topagri’s subsequent repayments; and
(b) with the customs charges and customer discounts added back in.
The make-up of BBC’s claim
[61] The total sum BBC claims by its statement of claim is $882,300 which it arrives at by reference to 11 particular transactions. BBC’s case is that all other transactions have been accounted for.
[62] I reproduce the table from Mr Furniss’s affidavit showing the 11 transactions
and the relevant totals:
TABLE 14
Order – Order number
Shipment
Date
Product supplied
Purchase Price (USD)
Amount outstandi ng (USD)
A – 2009090028 13
November
2009
1 Soft Sorta 63,200 48,700
B – 2010060049 15
September
1 Fill by
Weight
86,400 66,400
C – 2010080062
/ VVidal_VARIOS
2010
2 Soft Sorta 130,400 130,400
D – 2010070055 29
September
2010
1 Fill by
Weight
94,400 74,400
E –2010080059 /
2010090068
15 October
2010
3 Fill by
Weight
259,200 239,200
F - 2010090068 1 Eliminator
9.5mm
9,600 9,600
G – 2010080064
/ 2010080063
28 October
2010
2 Fill by
Weight
172,800 172,800
H – 2010090065 5 November
2010
1 Fill by
Weight
86,400 86,400
I – (no buying order)
9 December
2010
2 Soft Sorta 130,400 63,000
J – (no buying order)
22
December
2010
1 Fill by
Weight
86,400 86,400
K - AgrPatron Airfreight
Surcharge
5,000 5,000
Subtotal 1,124,200 982,300
Payment by Topagri -100,000
Total 882,300
4 Verbatim reproduction of plaintiff ’s table.
[63] After, within the table, allowing for amounts paid by Topagri against specific invoices, Mr Furniss arrived at an initial amount outstanding of $982,300. He then allowed for the two payments totalling $100,000 to which I have referred, producing the $882,300 identified in the statement of claim.
Topagri’s opposition and defence
[64] In its statement of defence and counterclaim, Topagri asserts that it has made payment to the plaintiff of all sums it was liable for.
[65] By way of set-off and/or counterclaim, Topagri asserts:
(a) A breach and an obligation upon BBC to continue to supply product upon request;
(b) A breach of an obligation upon BBC not to solicit and/or procure any
of Topagri’s clients or business for its own financial benefit;
(c) A failure by BBC to bring into account additional costs such as freight costs and customers’ discounts incurred by Topagri and a failure to provide additional discounts for some product.
(d) Topagri asserts that:
As a result of the plaintiff’s breaches of the Supply Contract, the defendant has suffered financial loss in relation to the lost revenue regarding the Orders, the sum of which is to be quantified at trial.
[66] In his affidavit in opposition, Mr Baumelou asserts that Topagri lost gross revenue of $766,301 as a result of BBC’s actions in dealing with the relevant customers after the termination of the BBC/Topagri relationship.
[67] Topagri did not provide any detailed evidence for the Court in relation to its alleged damages, either by reference to a loss of profit calculation or otherwise. In his submissions for Topagri, Mr Corlett asked the Court to assume that each transaction would have had a 25 per cent margin for Topagri, which he suggested “drives the loss figure down to $190,000” (from the gross revenue figure referred to
by Mr Baumelou of $766,301). Mr Corlett submitted that if the Court upheld Topagri’s counterclaim or set-off, and did not approach damages on the basis of standard margins, it might equally arrive at a damages assessment by examining financial evidence as to what Topagri’s profit performance and recovery would have been. Mr Corlett submitted that, in addition to the loss of profit so calculated, Topagri would be entitled to some (unquantified) consequential damages.
[68] In his evidence in opposition, Mr Baumelou covered the various aspects of the BBC claim:
(a) He gave the history of the trading relationship between the parties, including after the distributor’s agreement was terminated (the basic details of which accorded with Mr Furniss’s account);
(b)He challenged the BBC assertion that Topagri’s June 2011 calculation of the outstanding balance of debt should be treated as an acknowledgement, because he had completed a new set of spreadsheets bringing into account additional transactions, payments and expenses (referred to in the notice of opposition as having “occurred post June 2011”);
(c) He referred to each of the 11 transactions on which the BBC claim is based. He made specific points in relation to some items (to which I will return) but generally concluded by stating in relation to each item:
I confirm that the sum of US$X was paid by Topagri to BBC
confirmation of which is set out in exhibits D and E herein.
Exhibits D and E were bank transfer records in relation to payments totalling $889,000 made by Topagri to BBC. Mr Corlett confirmed in his submissions that Mr Baumelou’s statement in relation to each transaction that exhibits D and E “confirmed” the payment of the transaction in question was not to be taken as suggesting that the payments referred to in the exhibits could be specifically related to
the transactions in question. Rather, the thrust of what Mr Baumelou was saying was that because Topagri had made the total amount of payments it had, it had thereby paid all the sums for which it was liable;
(d)Mr Baumelou deposed that additional discounts had been agreed for certain Topagri clients (he identified San Jose Farms and Hortifruit Virquenco) and asserted that those had not been allowed for in his initial June 2011 spreadsheets;
(e) Mr Baumelou deposed also that BBC had used a New Zealand company, Mondiale, to ship equipment to Chile and that there had been an agreement between BBC and Topagri that Topagri would not be liable for any custom charges direct. He referred to a sum of
$38,000 and identified in correspondence from BBC’s Ms Taylor – the precise calculation of $38,308 has since been adopted by both parties;
(f) Mr Baumelou asserted that in dealing with Topagri customers after the finish of the BBC/relationship, BBC had acted disloyally. Mr Baumelou asserted in this regard that Topagri had lost the gross revenue on those sales of $766,301.
The BBC response to Topagri’s details of opposition
[69] In Mr Furniss’s reply, he responded to each assertion of Mr Baumelou that was not accepted. Mr Furniss provided also a schedule in which he accounted for BBC’s appropriation of all the money received from Topagri pursuant to the bank transfers which Mr Baumelou had identified as the money paid by Topagri. The full
$889,000 is accounted for.
[70] Mr Furniss also identifies, and tabulates, within the amended spreadsheets provided by Mr Baumelou a number of charges which Topagri apparently now claims as an agent for BBC. These had not been included in the June 2011
spreadsheet. Mr Furniss correctly observes that there is no supporting documentation in relation to the alleged costs. They total $107,387.87.
Recalculation by counsel for BBC
[71] Upon the basis of the evidence filed for this application, the respective positions of the parties as to the amount of BBC’s claim that was beyond argument were:
BBC – $344,145.86
Topagri – nil
[72] For the purpose of the hearing, Mr Pascariu included in his submissions a reduced claim for summary judgment purposes in the sum of $240,629. He provided the following table to explain the recalculated sum:
TABLE 25
Summary Judgment sought 344,145 (US$)
Topagri allegations:
Additional costs
Interest & letter of credit 16,713
Freight related costs 38,308
July 2011 SS export to BBC Tech, crate & export costs 682
Other machine related costs 1,600
2010 costs never advised 4,828
2008-2010 costs previously advised, however Topagri changed the value
Adjusted machine price
329
BioFruit customs invoice error 39,106
Additional liability
Topagri recognises liability for spare parts supplied -34,229
Alleged discounts provided to customers that BBC Tech liable for:
VBM Huertos Collipulli - 2007/08 season machines delivered - discount claimed by Topagri
Austral Berries - 2007/08 season machines delivered - discount claimed by Topagri
Gaston Meynet - 2009/10 season machines delivered - discount claimed by Topagri
2,813
1,446
31,920
Total 240,629
[73] Mr Pascariu explained that the credits allowed for in Table 2 were, for summary judgment purposes, a recognition simply that Topagri were claiming those additional items. His submission was that when those additional sums are treated as arguable, there remains an entitlement to summary judgment in the sum of $240,629.
[74] Because of the concessions made through Mr Pascariu’s Table 2, it is unnecessary for the Court to explore the arguability or otherwise of the various sums taken into account by Mr Furniss in Table 2, as incorporated by Mr Baumelou in his amended spreadsheets for the proceeding.
[75] Topagri, in addition, has a claim to set-off or to damages by way of counterclaim, each for breach of an alleged duty to continue to supply product, or for breach of a duty of non-competition. I have found that the argument as to underlying duties as alleged by Topagri is weak.6 To the extent that there remains in a set-off or counterclaim context, an argument that such duties existed and may have been breached, I am not satisfied that Topagri has provided any evidential foundation on
which the Court could conclude that Topagri suffered either damages or a loss or profit from such breaches. Topagri has not produced any evidence of relevant profit margins to establish damages, nor has it offered any analysis of profitability on such transactions on which to base an account of profits.
[76] I therefore deal only with the disputes that remain.
Item A (and Item I)
[77] The evidence filed clearly establishes that the purchase price for this equipment (a Soft Sorta) in the 2009 season was $63,200 and that the sale back to BBC was at $14,500, leaving the amount initially outstanding at $48,700. The
$14,500 credit figure was confirmed in writing by Mr Baumelou to Ms Karen Taylor of BBC on 27 July 2011. In his evidence, Mr Baumelou refers to what is plainly an ambiguous email from Ms Taylor two days earlier (25 July 2011) in which there is reference to the $14,500 figure for this item, followed by a statement that “Topagri debt will only be the cost of the rental”. It is clear beyond argument, particularly when Mr Baumelou’s own email of two days later is read, that the agreed $14,500 is to be credited against the purchase price and is not to become the replacement purchase price.
[78] The same analysis applies to Item I later in the table (save that the two Soft
Sortas purchased in December 2010 were involved at $65,200 each).
Item B (and Items E, F, G, H, J and K)
[79] Mr Baumelou does not dispute Mr Furniss’s evidence as to the details of this transaction. Rather, he tackles Item B through the standard comment which I have recorded:
I confirm that the sum of US$86,400 was paid by Topagri to BBC
confirmation of which is set out in exhibits D and E herein.
[80] In other words, Mr Baumelou (unlike Mr Furniss) has not related bank transfers made by Topagri to BBC to the settlement of particular accounts. Mr Corlett, for Topagri, did not point to any flaw in the evidence provided by Mr Furniss as to his reconciliation of bank transfers received with accounts credited.7
[81] Mr Baumelou’s implicit assertion that on the basis of his reworked spreadsheets (with all the additional items he has included in those), there has somehow an overall cancelling out of all debt cannot amount of itself to an arguable defence. BBC has, through Mr Furniss, accounted for all its treatment of all the
sums received by way of bank transfer. It has demonstrated that the balance claimed in relation to Item B has not been specifically met.
[82] Mr Corlett accepted that the argument for Topagri in relation to Items E, F, G, H, J, and K is exactly the same as for Item B. All are matters in which Mr Baumelou is essentially asserting that the general reconciliation through his spreadsheets points to the debts as a whole having been cleared. Topagri points to no specific evidence that any of the individual debts has been cleared.
Item C
[83] Item C relates to two items of equipment (both Soft Sortas) purchased in the
2010 season. They were invoiced by BBC at the same price ($65,200 per item;
$130,400 altogether) as the two Soft Sortas purchased in the same season in September 2010. Topagri, in its buying order for the Item C equipment, calculated a discount at 28 per cent instead of the standard 20 per cent. BBC took that to be an error and accordingly invoiced the items upon the basis of the agreed 20 per cent (hence the invoice total of $130,400 – identical to the Item I invoice).
[84] Mr Baumelou, without explanation of any discussion as to an amendment of the standard 20 per cent discount, simply deposes in his affidavit that the sum which he has allowed in his amended spreadsheets is:
The sum is the same as that stated in Topagri’s buying order.
[85] Mr Baumelou provides no basis upon which the Court can properly conclude that Topagri’s unilateral approach to discounting should apply. It was made clear that BBC did not accept a 28 per cent discount when it issued an invoice based on the agreed 20 per cent discount. If Topagri did not want to take the goods on that basis, it was for Topagri to either reject the items of equipment at that point or to, at least, raise the matter for re-negotiation at that point. It did neither. It simply took the two items of equipment with the serial numbers identified by BBC in its invoice. Topagri has no arguable basis upon which to assert that BBC must be taken to have sold the goods at the lower price adopted by Mr Baumelou in his revised spreadsheets.
Item D
[86] Item D relates to one Fill by Weight machine. The evidence establishes that the standard discounted price for that item of equipment, as between BBC and Topagri, was $US86,400 (as indicated by other items in Table 1). Additionally the buying order shows that Topagri ordered a Software Fresh Tracker ($US8,000). Mr Furniss’s initial affidavit identified the additional $8,000 item as in relation to air freight. Mr Baumelou in his opposition affidavit pointed out that the order was for one Software Fresh Tracker at $8,000. Mr Furniss accepted that correction in his reply evidence. What the $8,000 was for obviously does not affect the account itself.
[87] Mr Baumelou relies upon the documents produced by BBC in relation to this transaction and, in particular, BBC’s customs invoice. For some reason, BBC’s customs invoice was expressed in New Zealand dollars. That is, of course, contrary to the contractually agreed position between the parties that transactions would be in US currency. Furthermore, the customs invoice stated “$48,150.00”. It appears that BBC cannot explain that an error is involved. Topagri’s own Buying Order identified the net price as $86,400. Mr Baumelou refers to no correspondence or discussion to suggest any negotiated change from the cost of an item which the parties usually exchange at $86,400 for a New Zealand currency figure of $48,150. In his affidavit in opposition, Mr Baumelou does not seek to explain why he took the NZ$48,150 figure on the invoice as the seriously intended cost. Rather, what he did in his affidavit was to simply state that that sum equates to approximately “$35,293.45”. It is that figure which he then took and put in his revised spreadsheets. It is beyond doubt that someone compiling the customs invoice for BBC made an error. The price for that particular Fill By Weight was undoubtedly meant to be for $86,400 as it was for all Fill By Weights through that period.
Assessment of the evidence
[88] BBC’s evidence (through Mr Furniss) is that Topagri has failed to pay the balance ($882,300) owing on 11 transactions as identified in Table 1.8 While Mr Baumelou raised issues as to the pricing of some of these transactions, I have found
that none of his individual criticisms of Table 1 is arguable. BBC’s accounts in that regard are correctly stated in Table 1. As a further criticism of the BBC accounts, Mr Baumelou next stated in an identical way in relation to all 11 transactions that the sum relating to each transaction had been paid by Topagri.9 He relied on documents evidencing the transfer of a total of $899,000 to BBC. I have found, on the basis of Mr Furniss’s reconciliation, that all the sums transferred by Topagri were appropriated to settle transactions other than the 11 transactions in Table 1.10
Contrary to Mr Baumelou’s assertion in relation to the bank transfers, it is not
arguable that those transfers met the cost of the 11 transactions, or any part of it.
[89] In the absence of any other disputes these conclusions which I have reached would leave Topagri owing BBC the sum of $882,300.
[90] BBC however concedes, for the purposes of this summary judgment, that there are a number of areas of dispute which render the sums involved not amenable to summary judgment. The contention of Topagri which either BBC concedes to be arguable, or which I have found to be arguable, must be fully accounted for in determining whether there remains, of the $882,300 claim, a sum which BBC has shown indisputably to be owing.
[91] Topagri’s defence in opposition involves the suggestion that the Court should move beyond the 11 transactions and balances for which BBC seeks judgment. Topagri invites an examination of what it asserts were earlier and/or subsequent transactions between the parties which are not fully accounted for.
[92] I accept Mr Pascariu’s submission that, for the purpose of establishing whether there is a part of BBC’s claim which is indisputable, Mr Baumelou’s June
2011 spreadsheet reconciliation is a starting point. The appropriateness of that arises precisely because, for summary judgment purposes, BBC has elected (subject to adjustments which I discussed at [48]-[51] above), to use Topagri’s own figures as
the starting point for an analysis of further adjustments which Mr Baumelou asserts
9 Above at [68](c).
are required. (Mr Baumelou asserts they are required because they were not taken into account in his June 2011 analysis).
[93] It is Mr Baumelou’s further adjustments which I have considered from [20]- [34] above.
[94] The following table incorporates the findings I have made:
TABLE 3
June 2011 Spreadsheet reconciliation (US) $325,303.23 less arguably:
Customer discounts11 $80,534.56
Customs charges12 $38,308.07
Specific costs13 $62,459.50
Sub-total $181,302.13
Minimum sum owing (beyond dispute) $144,001.10
[95] Accordingly, the minimum sum which Topagri beyond argument owes to BBC in relation to its purchases is $144,001.10, subject to any arguable set-off and counterclaim. As I have found that Topagri has not produced a proper foundation for an argument that a breach of contractual obligations gave rise either to damages or a loss of profits,14 there is no set-off or counterclaim to be taken into account.
Order
[96] I order:
(a) The plaintiff has judgment against the defendant for $144,001.10;
11 Above [21]-[22].
12 Above [23]-[24].
13 Above [30]-[31].
14 Above [35]-[43], [65]-[67], [75].
(b)The defendant is to pay to the plaintiff costs of the summary judgment application on a 2B basis together with disbursements to be fixed by the Registrar;
(c) The proceeding is otherwise adjourned to be case-managed in accordance with directions contained in a Minute issued contemporaneously with this judgment.
Associate Judge Osborne
Solicitors:
Minter Ellison Rudd Watts, Auckland for Plaintiff
Brookfields, Auckland for Defendant
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