Mariteq Fabricators Ltd v Quigley's Technical Services Ltd - [2012] NZHC 2996

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2012-470-533 [2012] NZHC 2996

BETWEEN MARITEQ FABRICATORS LTD Plaintiff

ANDQUIGLEY'S TECHNICAL SERVICES LTD
Defendant

Hearing: 26 October 2012

Counsel: T J G Allan for Plaintiff
J A MacGillivray for Defendant

Judgment: 12 November 2012

JUDGMENT (NO. 2) OF HEATH J

This judgment was delivered by me on 12 November 2012 at 4.15pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar

Solicitors:
Grove Darlow, PO Box 2882, Auckland
Tompkins Wake, PO Box 258, Hamilton

MARITEQ FABRICATORS LTD V QUIGLEY'S TECHNICAL SERVICES LTD HC TAU CIV 2012-470-533 [12 November 2012]

The application

[1] Mariteq Fabricators Ltd (Mariteq) applies for summary judgment. It seeks specific performance of an obligation that Mariteq alleges Quigley’s Technical Services Ltd (Quigley’s) agreed to perform when it executed a Deed of Settlement of related proceedings,1 on 5 December 2011.

[2] Initially, Mariteq sought an interim injunction to compel Quigley’s to perform

the relevant condition of the Deed. During the course of a hearing on 27 September

2012, it was recognised that the order sought (a mandatory interim injunction) might be inappropriate. Mr MacGillivray, for Quigley’s, indicated during that hearing that his client was prepared to deal with the issue on a final basis, by reference to an argument that the Deed had been frustrated. For that reason, I made orders enabling an application for summary judgment to be made so that the issue could be
determined.2

Background

[3] On 18 December 2006, Quigley’s issued proceedings against Mariteq in the District Court at Taupo, claiming a balance allegedly due in respect of construction work it had undertaken. On 16 March 2010, judgment was entered in its favour, in the sum of $32,973.75. Mariteq did not pay the judgment debt and later failed to comply with a statutory demand made against it. In May 2010, Quigley’s commenced liquidation proceedings against Mariteq.

[4] While the liquidation proceeding was pending, Mariteq proposed a compromise to its creditors.3 A meeting of creditors was held on 11 November 2010. Over Quigley’s objection, the requisite majority of creditors approved the
compromise.

1      See paras [3]–[5] below.
2      Mariteq Fabricators Ltd v Quigley’s Technical Services Ltd [2012] NZHC 2516 at paras [8] and
[9].
3      Companies Act 1993, Part 15.

[5] Quigley’s challenged the compromise, alleging that it was unfairly prejudicial and contained material irregularities. Quigley’s issued a second set of proceedings, in which it sought a declaration that it was not bound by the compromise.4
Following filing of that proceeding, Mariteq obtained advice from an Auckland based insolvency practitioner, Mr Chatfield, on whether creditors were likely to receive more under the compromise than they would on liquidation. Mr Chatfield reported in favour of the compromise.

[6] On 12 September 2011, a judicial settlement conference was held in this Court. While it was unsuccessful, the parties subsequently agreed on a process to resolve both sets of proceedings. The terms were recorded in the Deed of 5
December 2011.5 It involved establishment of…

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 2996
Decision Date: 12 November 2012

CaseChat Overview and Summary

In the High Court of New Zealand, Mariteq Fabricators Ltd applied for summary judgment against Quigley's Technical Services Ltd, seeking specific performance of a term of a Deed of Settlement. The background to the dispute was that Quigley's had successfully sued Mariteq in the District Court. Mariteq then proposed a compromise of its debts, which Quigley's challenged. The dispute was settled by a Deed of Settlement, which provided for an independent investigation by an investigative accountant, appointed by Quigley's, to determine whether Quigley's would receive a greater dividend in liquidation or under the compromise. The investigative accountants appointed by Quigley's resigned, and Mariteq sought to have Quigley's compel the appointment of a replacement. Quigley's refused to do so, claiming the Deed had been frustrated. The court considered whether the Deed had been frustrated and whether Quigley's should be compelled to appoint a replacement investigative accountant. The court found that the contract had not been frustrated and that Quigley's should be compelled to appoint a replacement investigative accountant. The court ordered Quigley's to appoint a replacement investigative accountant from a list set out in a letter from Mariteq's solicitors, and awarded costs to Mariteq.

Orders