Hi-Tech Commercial Interiors Limited v Commit Services Limited

[2016] NZHC 1619

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-000955 [2016] NZHC 1619

UNDER

Section 290 of the Companies Act 1993

IN THE MATTER OF

The setting aside of a statutory demand

BETWEEN

HI-TECH COMMERCIAL INTERIORS LIMITED

Applicant

AND

COMMIT SERVICES LIMITED Respondent

Hearing:	18 July 2016
Appearances:	B Norling for the Applicant S McAnally for the Respondent
Judgment:	18 July 2016

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

HI-TECH COMMERCIAL INTERIORS LIMITED v COMMIT SERVICES LIMITED [2016] NZHC 1619 [18

July 2016]

The setting aside application

[1]      On 26 April 2016 the respondent (Commit) served a statutory demand upon the applicant (Hi-Tech) seeking payment of $40,443.74.

[2]      By  its  setting  aside  application  Hi-Tech  claims  the  work  undertaken  by Commit at the Quba Apartments, Tapora Street, Auckland was not pursuant to any contract with Hi-Tech but with Hi-Tech Commercial Interiors (Auckland) Limited (Hi-Tech Auckland).   Hi-Tech says it was a Mr Taylor an employee of Hi-Tech Auckland who had liaised with Commit to provide those electrical services to Hi- Tech Auckland, and that Mr Taylor was not employed by Hi-Tech.

[3]      Hi-Tech says it had no interest with that development with which Hi-Tech was then engaged.   No payment claim was served on Hi-Tech as Commit claims. Hi-Tech says Commit relies on a single letter which mistakenly set out that it was the contracting entity.

[4]      By his affidavit in support Mr Martin Price deposes that he is a shareholder and director of Hi-Tech and holds the position of managing director of the wider Hi- Tech group of companies.

[5]      Mr  Price  deposed  that  on  13  November  2015  High  Street  Management Limited (In  liquidation and receivership), formerly known as Hi-Tech Auckland entered into a contract with the Russell Property Group to conduct an office fit out for Ngati Whatua located at the ground floor, Quba Apartments – which involved construction of new internal offices and meeting rooms.  At this time Mr Price says Hi-Tech Auckland entered into a contract with the Russell Property Group to conduct a fit out in regard to Red Bull Powder Company a similar project being undertaken also at the Quba Apartments.

[6]      Mr Price says a Mr Taylor an employee of Hi-Tech Auckland liaised with Commit to provide electrical services.  Mr Price has exhibited Hi-Tech Auckland’s order book receipts showing job numbers attached.  Mr Price says Mr Taylor had no employment with Hi-Tech and that Hi-Tech has no interest in the Red Bull Power

Company project and nor did it engage the services of Commit – nor indeed could it because the head contract at all times involved Hi-Tech Auckland.  Therefore there was no contractual relationship between Hi-Tech and Commit.   Rather that relationship existed between Hi-Tech Auckland and Commit.

[7]      In support of Hi-Tech’s case Mr Taylor on 3 May 2016 wrote:

Commit   Services   Limited   knew   they   were   employed   by   Hi-Tech Commercial Interiors (Auckland) Limited and not the Wellington branch of Hi-Tech – Hi-Tech Commercial Interiors Limited.

I   Bradley   Taylor   was   employed   by   Hi-Tech   Commercial   Interiors (Auckland) Limited and not the Wellington company as the Wellington company was never contracted by clients.   My purchase orders given to subcontractors and suppliers were also known by all to be from Hi-Tech Commercial Interiors (Auckland) Limited.

[8]      Hi-Tech also exhibits a copy of a letter from Commit’s Mr Swinfen dated 8

January 2016.  It was addressed to:

Brad Taylor

Hi-Tech Commercial

170 Queen Street

Auckland

[9]      By implication it is suggested Commit was aware it was dealing with Hi- Tech Auckland.

Opposition to the application

[10]     In its opposition to the setting aside Commit asserts there is no credible foundation for any assertion that it did not contract with Hi-Tech.  In its opposition in support, it relies upon the affidavits of Mr Gleye and Mr Swinfen.

[11]     Mr Gleye is a director of Commit.  He deposed that on 6 November 2015 Mr Parker of Hi-Tech invited Commit to supply a quote for its Ngati Whatua project. He said that request was made on behalf of “Hi-Tech Commercial”.  Subsequently a quote was submitted on 19 November to Hi-Tech Commercial Interiors, PO Box

10572, Wellington.   Later Commit was asked to supply a quote to relocate the

existing switch board in the premises and this they did on 25 November 2015.  Their quote for that was addressed to “Hi-Tech Commercial Interiors”.

[12]     Mr  Gleye  says  on  1  December  2015  Hi-Tech  accepted  its  quotes  and contracted to supply the agreed services.   A copy of Hi-Tech’s letter to Commit formed the basis of the contract.  The letter was signed under Hi-Tech’s name i.e. not Hi-Tech Auckland.

[13]     Mr Gleye also attaches a copy of an email from Mr Lyford of the Russell Property Group confirming that the entity paid for the fit outs of Ngati Whatua and Red Bull was Hi-Tech and not Hi-Tech Auckland.

[14]     Mr Gleye says it is not in dispute that Commit’s payment claims throughout were submitted to Hi-Tech.  Rather it appears Hi-Tech asserts that because payment was  accepted  from  Hi-Tech Auckland  then  it  was  with  that  company  they had contracted.

[15]     Mr Gleye notes that company registry records disclose that Hi-Tech Auckland (or High Street Management Limited as it was later known) shows Mr Price is the director of that company as well as of Hi-Tech.

[16]     Mr Swinfen was employed by Commit to project manage the work done as subcontractor  to  Hi-Tech  in  respect  of  the  Ngati  Whatua  and  Red  Bull  jobs. Regarding the letter of Mr Taylor which Mr Price considers proves Commit knew it was dealing with Hi-Tech Auckland rather than Hi-Tech Mr Swinfen says he knew of no such thing.

Considerations

[17]     By s 290 of the Act a Court may grant an application to set aside a statutory demand where there is a substantial dispute as to whether or not the debt is owing.  It is the Court’s task to determine if there is a dispute but not to determine what the outcome of that dispute may be.

[18]     Hi-Tech claims Commit knew or ought to have known it was contracting with Hi-Tech Auckland and not Hi-Tech.

[19]     Mr Norling submits there is evidence demonstrating Hi-Tech Auckland was the entity which contracted with the Russell Property Group in relation to the Ngati Whatua and Red Bull jobs and in particular:

(a)       Mr Price of High-Tech has deposed that this was the case;

(b)There is no reason why the Auckland jobs would have been carried out by an entity located in Wellington;

(c)      Hi-Tech Auckland and not Hi-Tech received all payments in respect of the Ngati Whatua and Red Bull jobs.

(d)Mr Taylor was not employed by Hi-Tech but Hi-Tech Auckland and therefore could not acted on behalf of Hi-Tech when liaising with Commit.

[20]     Mr Norling submits there were several documents which were exchanged between the parties which referred to the contract party as being Hi-Tech (and not Hi-Tech Auckland).  Hi-Tech’s Mr Price has deposed this was simply an oversight by individuals who prepared the documents.

[21]     Given, Mr Norling submits, there is conflicting evidence as to Commit’s knowledge he submits the dispute should be resolved at trial and after discovery has been provided and when an opportunity can be given to hearing witnesses.

Conclusions

[22]     The clear evidence is that Commit contracted with Hi-Tech and not with Hi- Tech Auckland about which Commit knew nothing at all relevant times.

[23]     The dispute is about Hi-Tech’s claims that Commit contracted with Hi-Tech

Auckland.  However the tender that formed the basis of the Ngati Whatua and Red

Bull contracts was with Hi-Tech.   On 6 November 2015 Mr Parker from Hi-Tech emailed Commit requesting a quote for subcontract work for the Ngati Whatua project. A similar process later followed in relation to the Red Bull project.

[24]     The  quotes  were  submitted  to  Hi-Tech  and  both  were  accepted  on  1

December 2015 by a letter that:

(a)       It was on the letterhead of “Hi-Tech Commercial Interiors Limited”;

(b)      Referred, at clause 3 to “Hi-Tech Commercial Interiors Limited’s”

health and safety policy;

(c)       Referred,  at  clause  5  to  “Hi-Tech  Commercial  Interiors”  safety

guidelines and its safety manual;

(d)      Was signed on behalf of “Hi-Tech Commercial Interiors Limited” by

its quantity surveyor.

[25]     Subsequently in January 2016 Commit was asked to provide quotations for the relocation of light fittings in the existing Ngati Whatua project and to replace the power points for Red Bull.  On this occasion the quotes were issued to Mr Taylor of “Hi-Tech Commercial” at “170 Queen Street”.   Mr Taylor had issued a “purchase order” for “Hi-Tech Commercial Interiors”.

[26]     It  is  clear  that  Commit’s  employees  dealt  with  Mr  Taylor  during  these projects and not with Mr Parker who had been involved with pre-contractual correspondence.

[27]     Neither that fact nor the fact that Mr Taylor communicated from an Auckland address ought to suggest that Commit was dealing with a company different to that which it earlier contracted with, or indeed was aware of the existence at all of Hi- Tech Auckland.

[28]    Commit issued its invoices to Hi-Tech.   Hi-Tech says its payments and remittance advises were issued by Hi-Tech Auckland.

[29]     Curiously Mr Taylor’s letter written on 3 May 2016 asserts that Commit knew they were engaged by Hi-Tech Auckland and that he was employed by Hi-Tech Auckland and not Hi-Tech.  More so because this letter was written after Hi-Tech Auckland had changed its name to “High Street Management Limited”, and it was written after (Hi-Tech Auckland) was placed into liquidation on 18 April 2016.

[30]     It would appear therefore that Mr Taylor’s letter is  written on Hi-Tech’s

letterhead, i.e. on behalf of a company that did not employ him.

[31]     In summary it was Hi-Tech through the agency of Mr Parker that accepted Commit’s contract quotes.   There is no suggestion Mr Parker did not have that authority.   Rather and indirectly it has been suggested the documents in question should have referred to Hi-Tech Auckland.

[32]     Mr Taylor has signed a letter claiming Commit knew it was not contracting with   Hi-Tech   –   but   does   not   point   to   any   evidence   of   acceptance   or acknowledgement on the part of Commit which confirms this.  Also it is curious this evidence has been provided by letter and not sworn affidavit as would have been expected.

Result

[33]    It is clear there is no genuine and substantial dispute.   The contractual documents are clear.  The contractual obligations were undertaken by and accepted for Hi-Tech and not Hi-Tech Auckland.

[34]     The application to set aside is dismissed.

[35]     Routinely   when   the   Court   reaches   this   conclusion   it   will   consider applications to extend the time for compliance with the statutory demand.  There is no set formal practice indicating how long, if at all, further time should be provided to allow the demand to be satisfied.

[36]     Mr Norling has suggested 15 working days is appropriate.   Mr McAnally submits three working days is sufficient.

[37]     Mr Norling says Hi-Tech is solvent.

[38]     The Court considers Hi-Tech’s claims of genuine and substantial dispute to

have fallen far short of the mark.

[39]     The time for compliance with the statutory demand is extended until 4:00pm,

22  July 2016.    By that  time  Hi-Tech  is  also  to  pay Commit’s  legal  costs  and

disbursements calculated on a 2B basis.

Associate Judge Christiansen