Bell v BDO Spicers Manawatu Ltd - [2012] NZHC 1598

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-166 [2012] NZHC 1598

BETWEEN ROBERT ARTHUR BELL Appellant

ANDBDO SPICERS MANAWATU LIMITED Respondent

Hearing: 18 May 2012

Counsel: W Bevan for Appellant
A Darroch for Respondent

Judgment: 11 July 2012

In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 10:30am on the 11 July 2012.

JUDGMENT OF WILLIAMS J

Solicitors:
Kapimana Legal Services Ltd, Porirua
Duncan Cotterill, Wellington

ROBERT ARTHUR BELL V BDO SPICERS MANAWATU LIMITED HC WN CIV-2012-485-166 [11 July
2012]

Introduction

[1] On 9 December 2011, Judge Tuohy in the District Court allowed a claim for recovery of debt by BDO Spicers Manawatu Ltd (BDO) against Mr Bell. The Judge found Mr Bell was liable to pay the sums owing, plus interest at 2 per cent per month and solicitor-client costs, both of these pursuant to BDO’s contract for services with Mr Bell.

[2] Mr Bell now appeals against the result, quantum and the costs awarded.

Facts

[3] The background to Mr Bell engaging BDO was a relationship property dispute between Mr Bell and his former partner, Ms Williams. While they were together, the couple had lived at Marainanga, a farming station in the Wairarapa. After their separation, the parties agreed that Mr Bell could continue to live on the station until it was sold. In the meantime, Ms Williams brought a claim under the Property (Relationships) Act 1976 in respect of the property. Her claim also involved a company, Ruahine Club Ltd.

[4] As it happened, the station was not sold until 1 February 2008. By then, Ms Williams’ claim had still not been resolved. This is when BDO came in. Mr Bell engaged BDO to provide expert accounting evidence for an upcoming hearing in the Family Court in relation to these relationship property issues.

[5] Mr Bell’s first contact with BDO was on 19 June 2008. He met with Mr Hopping, an Associate with the firm. They discussed the terms on which Mr Bell would engage BDO.

[6] The next day, Mr Hopping sent a letter of engagement to Mr Bell on behalf of BDO. The letter had been informed by their discussions the previous day and set out precisely what Mr Bell had asked the firm to do. It provided:

This letter is to confirm our understanding of the terms and objectives of our special accounting services engagement and the nature and limitations of the services that we will provide.

You have requested that we:

Compile detailed accounting records relating to the operations of
Marainanga Station, Akitio over the period 11 April 2006 to
1 February 2008. This will include preparing a detailed stock reconciliation.

Present the information in a form that is suitable for becoming evidence in your anticipated matrimonial litigation.

[7] The letter also included an appendix of terms and conditions. I set out clauses 1 and 16 in full. They were relevant to the scope of Mr Bell’s agreement with BDO and are…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NZHC 1598
Decision Date: 11 July 2012

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Bell v BDO Spicers Manawatu Ltd involves a dispute between Mr Bell and BDO Spicers Manawatu Ltd, concerning the recovery of debt by BDO against Mr Bell. Mr Bell appeals against the result, quantum, and the costs awarded by Judge Tuohy in the District Court. The District Court had allowed a claim for recovery of debt by BDO against Mr Bell, who was found liable to pay the sums owing, plus interest at 2 per cent per month and solicitor-client costs, both pursuant to BDO’s contract for services with Mr Bell. The central legal issue in this case is whether Mr Bell is liable to pay the sums owing, plus interest and costs, as determined by the District Court. The Court had to decide whether the work described in the unpaid invoices fell within the terms of the letter of engagement between the parties. The Court found that the work done on the rebuttal affidavit was justifiable under the letter of engagement, and Mr Bell is liable to pay this sum. However, the work done on the draft financial statements could not be justified under the letter of engagement. The Court found that the parties had entered into a valid, enforceable oral agreement after the consent order for BDO to perform additional work. Therefore, Mr Bell is liable to pay all amounts owing under Invoices 12721 and 13001. The Court also determined that the interest clause imposing interest of 2 per cent per month, compounding, was excessive and penal in nature, and a fair rate of interest is 15 per cent per annum. The appeal is allowed in the minor respect of the interest rate, but is otherwise dismissed.

Orders