Donaldson v Frankton Aluminium (1982) Limited - [2013] NZHC 534

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV2012-419-001478 [2013] NZHC 534

BETWEEN ROBERT HILARY DONALDSON Appellant

ANDFRANKTON ALUMINIUM (1982) LIMITED
Respondent

Hearing: 18 March 2013

Appearances: A Shaw for Applicant
C Fletcher and D Delic for Respondent

Judgment: 19 March 2013

JUDGMENT OF GILBERT J

This judgment was delivered by me on 19 March 2013 at 2.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………….

Counsel: C Fletcher and D Delic, Hamilton: charles@fletcherlaw.co.nz
A Shaw, Wellington: antony.shaw@xtra.co.nz

Copy to: R H Donaldson, Cambridge: motorsports@maxnet.co.nz

DONALDSON V FRANKTON ALUMINIUM (1982) LIMITED HC HAM CIV 2012-419-001478 [19 March
2013]

Introduction

[1] Mr Donaldson appeals against a judgment of Judge Spiller in the Hamilton District Court declining to set aside a default judgment entered against him in favour of Frankton Aluminium (1982) Limited. The judge found that the judgment had been regularly obtained and that Mr Donaldson had not provided any evidence to show that he had a seriously arguable defence. Mr Donaldson argues that the judge was wrong to find that the judgment had been regularly obtained.

Background

[2] Frankton supplied windows to Mr Donaldson in September and October 2010. It claims that the goods were sold on the basis of its standard terms of sale which provide that title does not pass until the goods are paid for in full and that Frankton may repossess and dispose of the goods if payment is not made by due date.

[3] Mr Donaldson did not pay for the windows and they were returned to Frankton in December 2010. There is a dispute about the basis upon which Frankton accepted the return of the windows and also whether Frankton’s standard terms and conditions formed part of the contract for supply.

[4] On 15 March 2012, Frankton served Mr Donaldson with a notice of claim pursuant to r 2.10 of the District Courts Rules 2009. Frankton claimed $30,920.82, being the total of the two invoices, $2,200 for “storage costs + ongoing costs”, interest of $4,305.70 calculated in accordance with the standard terms at the rate of
13 per cent per annum being 5 per cent above Frankton’s bank overdraft interest rate, and costs of $1,793.11. The basis of the claim for storage was not explained in the claim and the standard terms and conditions do not refer to any entitlement to claim storage costs. Mr Fletcher advised from the bar that the storage costs were claimed pursuant to a separate contract allegedly made with Mr Donaldson at the time the goods were returned.

[5] The notice of claim, which was in form 2 as set out in schedule 1 of the District Courts Rules, advised Mr Donaldson that if he wished to defend the claim he needed to “fill in form 3 – Response by defendant” within 30 working days after he received the notice of claim. Form 3 advises defendants to serve the completed form on the plaintiff “by taking or sending” it to the plaintiff’s…

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.

Continue reading Donaldson v Frankton Aluminium (1982) Limited

Details

AGLC: Donaldson v Frankton Aluminium (1982) Limited [2013] NZHC 534
Case: [2013] NZHC 534
Decision Date: 19 March 2013

CaseChat Overview and Summary

The case of Donaldson v Frankton Aluminium (1982) Limited involved a dispute between the appellant, Robert Hilary Donaldson, and the respondent, Frankton Aluminium (1982) Limited, over an alleged debt for the supply of windows. Frankton Aluminium had supplied windows to Mr. Donaldson in 2010, but after they were returned, Frankton Aluminium issued a claim in the Hamilton District Court seeking payment of the outstanding amount, which included interest and storage costs. Mr. Donaldson submitted a response to the claim after the required period, but the District Court had already entered a default judgment in favour of Frankton Aluminium. Mr. Donaldson appealed against this decision.

The central legal issue in this case was whether the District Court judge was correct in finding that the default judgment had been regularly obtained, and whether there was a miscarriage of justice in allowing the judgment to stand. The Court considered whether the District Court had the authority to grant a default judgment after Mr. Donaldson had served a response to the claim. Additionally, the Court examined whether Mr. Donaldson had a seriously arguable defence that would warrant setting aside the default judgment.

The Court held that the default judgment was irregularly obtained because Frankton Aluminium had applied for judgment despite having received Mr. Donaldson's response in the prescribed form. The Court found that Rule 2.39 of the District Courts Rules allows a plaintiff to apply for judgment by default if the defendant does not serve a response within the allotted time. However, the Court held that a plaintiff cannot apply for judgment after the defendant has served a compliant response. The Court concluded that Frankton Aluminium was not entitled to seek judgment by default after receiving Mr. Donaldson's response. As a result, the Court found that the default judgment was irregularly obtained. Furthermore, the Court held that allowing the irregularly obtained judgment to stand could result in a miscarriage of justice, as it would deny Mr. Donaldson his right to defend the claim. Consequently, the Court set aside the default judgment.

In conclusion, the Court found that the default judgment was irregularly obtained and allowed the appeal. The default judgment was set aside.

Orders