General Equity Building Society v Squant Communications Private Limited

[2017] NZHC 1600

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-002292 [2017] NZHC 1600

BETWEEN

GENERAL EQUITY BUILDING

SOCIETY Plaintiff

AND

SQUANT COMMUNICATIONS PRIVATE LIMITED

First Defendant

SITI VISION DIGITAL MEDIA PRIVATE LIMITED

Second Defendant

VETCHA SATYA KISHORE Third Defendant

KANCHERLA SIVA RAMA KRISHNA Fourth Defendant

Hearing:	11 July 2017
Appearances:	E Grove for Plaintiff N Taefi for Defendants
Judgment:	11 July 2017

JUDGMENT OF VENNING J

This judgment was delivered by me on 11 July 2017 at 3.30 pm, pursuant to Rule 11.5 of the High

Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           KPLegal Ltd, Auckland

DG Law, Auckland

Copy to:            E J Grove, Auckland

N Taefi, Auckland

GENERAL EQUITY BUILDING SOCIETY v SQUANT COMMUNICATIONS PRIVATE LIMITED [2017] NZHC 1600 [11 July 2017]

[1]      The plaintiff seeks summary judgment against the defendants.   Ms Taefi opposed the entry of summary judgment today and submitted the defendants should be given further time to file further affidavits in opposition to the plaintiff’s application for summary judgment.   She produced a memorandum for the Court setting out bank statements which she submitted showed that the sum claimed by the plaintiff as owing by the defendants was not accurate and could not be relied on.

[2]      After hearing from counsel I declined Ms Taefi’s application for a further adjournment on behalf of the defendants.   There is a considerable history to this proceeding which confirms delay and default on the part of the defendants.

[3]      The proceedings were issued in September 2016 and the defendants served by the end of last  year.   The matter was then called a number of times in the summary judgment list.   On 14 March 2017 Edwards J recorded the tortured procedural background to the proceeding, noting non-compliance by the defendants

with timetabling orders made by the Court and made unless orders.1     The Judge

directed that:

(a)       The defendants are precluded from filing a notice of opposition, affidavits in opposition to the summary judgment application, an application to dismiss or stay the proceedings on jurisdictional grounds, and any affidavits in support of such an application, unless copies  of  all  such  documents  are  filed  and  served  by  5.00  pm, Friday, 17 March 2017, and the originals of the documents are filed as soon as reasonably practicable thereafter.

[4]      The  Judge  clearly contemplated  that  the  defendants  would  file  affidavits setting out their opposition to the summary judgment application in full.   The defendants  then  filed  affidavits  in  opposition  to  the  application  for  summary judgment and also in support of their application to dismiss.

[5]      Then on 27 March 2017 Edwards J made orders by consent directing inter alia that the plaintiff’s application for summary judgment and the defendants’ challenge to  jurisdiction  were to  be heard in  one fixture with the jurisdictional

objections (the dismissal application) to be dealt with prior to the summary judgment application.

[6]      The applications were before Associate Judge Doogue on 2 June 2017.  On

28 June 2017 Associate Judge Doogue dismissed the defendants’ challenge to jurisdiction.2    The Judge did not then go on and deal with the summary judgment application but rather directed the Registrar to list the matter in the next available summary judgment application list.

[7]      When  the  matter  was  called  this  morning  Mr  Grove  sought  summary judgment.  As noted Ms Taefi opposed that and sought further time to file further affidavit evidence on behalf of the defendants in opposition to the application for summary judgment.   Ms Taefi also filed a memorandum which set out bank statements, which she submitted showed that the plaintiff had not accounted for all of the sums paid to an entity known as Nexus Fincap.

[8]      I declined the application to further adjourn the matter as the defendant has had ample opportunity to set out its evidence in opposition to the plaintiff’s application for summary judgment.   The unless order of Edwards J was clear and unambiguous.  The defendant filed affidavit evidence in response to that unless order and in purported compliance with it.   Further the defendants consented to both applications – the defendants’ application to dismiss and the plaintiff’s application for summary judgment being heard together.  The plaintiff is entitled to pursue its application for summary judgment on the material currently before the Court.

[9]      On the basis of that material, there is no defence to the plaintiff’s application for  summary  judgment,  save  as  to  quantum.    The  plaintiff  provided  the  first defendant a letter of credit.   The letter of credit was guaranteed by the second to fourth defendants.   The letter of credit was created by a contract executed by the defendants.  The defendants’ obligations are clear.  They have not paid the sums due to the plaintiff.

[10]     In his affidavit in opposition to the application for summary judgment Mr Krishna, Managing Director of the second defendant, suggested that the first and second  defendants  renegotiated  the  payment  schedule  with  Nexus  Fincap,  with GEB’s consent and a new payment schedule was agreed.  But Mr Krishna gave no details of that variation.   His evidence is no more than vague assertion.   In his

judgment Associate Judge Doogue dealt with that matter in the following way:3

[19]     In response, the plaintiff submits that the arrangement which the defendants contend for is vague, unparticularised and undocumented.   Mr Grove submitted that:

31.     There is an allegation made at paragraphs 19 and 20 of Mr Krishna’s affidavit for the Defendants that, on some unspecified date, someone (who is not identified) representing Squant entered into an agreement (which would appear to be unrecorded) with someone  (who  is  also  not  identified)  representing the  Plaintiff, under which the Plaintiff agreed that Squant would have an extension of time (for an unspecified period of time) to make payment of the sums due in respect of the letter of credit.

32.     Mr Krishna’s allegation that any variation to the payment timetable was agreed is denied by the Plaintiff, and the first time the existence of such an alleged variation contract was raised by the Defendants was when Mr Krishna’s affidavit was served in these proceedings.  No documentary record of, or prior reference or allusion to, any such agreement has been produced.

33.     The alleged variation simply lacks credibility.  It also lacks sufficient particulars.

[20]     I  consider  that  those  criticisms  of  the  supposed  agreement  are justified.

[11]     I am satisfied there is no reasonably arguable defence to the plaintiff ’s claim

subject to the issue of quantum.

[12]     As to quantum the material annexed to the memorandum which Ms Taefi presented to the Court this morning confirms on her submission that in US dollars

$225,806 has been paid to the plaintiff.  Mr Grove acknowledges on behalf of the plaintiff that $213,500 has been paid.  I proposed to enter judgment taking account of the larger credit argued for by Ms Taefi.  In the context of the case as a whole the

difference is immaterial.

3      General Equity Building Society v Squant Communications Private Ltd & Ors, above n 2.

[13]     There will  be judgment  for the plaintiff jointly and  severally against  all defendants in the sum of $605,445.50 less $225,806, namely $379,639.50.   The defendants  are  also  jointly  and  severally  liable  to  pay  interest  on  that  sum  of

$379,639.50 at the rate of five per cent per annum from 21 May 2014 until date of judgment.

[14]     Ms Taefi submitted that no interest should be payable as the plaintiff had not incurred any interest liability to the supplier as yet.  However, as Mr Grove pointed out the supplier has reserved its position and may well charge interest.  In any event the interest is properly claimed at the statutory rate from the accrual of the cause of action.

Costs

[15]     The  contract  provides  for  legal  costs  on  an  indemnity  basis.    Ms  Taefi submitted the plaintiff should not be entitled to costs given its conduct of the proceedings, noting that the plaintiff had not acknowledged one of the payments made by the defendants and that the plaintiff had issued the proceedings without seeking payment earlier.  She suggested that if a request had been made earlier then the matter could have been resolved.  The defendants’ response to the proceedings is an answer to that submission.  It is apparent the defendants did not accept liability at all.  The plaintiff is entitled to costs.  There will be an order that the defendants are jointly  and  severally  liable  to  pay  the  plaintiff’s  reasonable  legal  costs  and

disbursements on an indemnity basis.

Venning J