Mariteq Fabricators Ltd v Quigley's Technical Services Ltd - [2012] NZHC 2516

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2012-470-533 [2012] NZHC 2516

BETWEEN MARITEQ FABRICATORS LTD Plaintiff

ANDQUIGLEY'S TECHNICAL SERVICES LTD
Defendant

Hearing: 27 September 2012

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

Judgment: 27 September 2012

(ORAL) JUDGMENT OF HEATH J

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 [27 September 2012]

Introduction

[1] Mariteq Fabricators Ltd (Mariteq) seeks an interim injunction designed to compel Quigley Technical Services Ltd (Quigley’s) to perform a condition of Deed of Settlement (the Deed) dated 5 December 2011. It also seeks to restrain Quigley’s from asking the Registrar of this Court to set down for hearing two related proceedings brought by Quigley’s: one is an application to put Mariteq into liquidation (the liquidation proceeding) while the other seeks a declaration that a compromise with creditors, into which Mariteq entered under Part XIV of the Companies Act 1993, is not binding on it (the compromise proceeding).

[2] The application came on for hearing before me today. From the papers filed, the central issue appeared to be whether cl 11 of the Deed operated to require Quigley’s to agree to a substitute investigating accountant to determine whether Quigley’s would receive a greater payment under the compromise than it would if Mariteq were placed in liquidation. That issue arose because the agreed investigating accountants “McDonald Vague (Auckland Office)” had resigned, following assertions of pre-determination on their part. To counter that, Quigley’s contended that McDonald Vague’s resignation had the effect of frustrating the contract, primarily based on that conclusion having previously been reached in cases
involving the appointment of a specific arbitrator.[1]

[1] Counsel referred to Bremer Vulkan Schiffbau und Machinenfabrik [1981] 1 All ER 289 (HL).

[3] Other issues were raised. For present purposes, it is unnecessary to rehearse them.

Developments during the hearing

[4] During the course of the hearing, Mr MacGillivray, for Quigley’s, indicated that his client no longer opposed an order restraining it from applying to have the liquidation and compromise proceedings set down for hearing. He was prepared to
deal with the issue on a final basis, by reference to its “frustration” argument.

[5] In answer to a question from me, Mr MacGillivray confirmed that, if I were to hold that the agreement had not been frustrated, Quigley’s would join with Mariteq in appointing a replacement investigating accountant to perform obligations conferred by the Deed of Settlement.

[6] Discussions then took place over procedural issues. Mr Allan, for Mariteq, was keen to preserve his ability to deal with the application on an interim basis. He submitted that a restraining order should be made as sought until such time as the substantive issue was resolved. Subsequently, he made a helpful suggestion that the substantive issue could be determined on an application for summary judgment. Mr MacGillivray concurred with that suggestion.

[7] I expressed some concern about making an…

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 2516
Decision Date: 27 September 2012

CaseChat Overview and Summary

Mariteq Fabricators Ltd brought an application against Quigley's Technical Services Ltd, seeking an interim injunction to enforce a term of a Deed of Settlement. Mariteq sought an order to compel Quigley's to agree to a substitute investigating accountant to determine whether Quigley's would receive a greater payment under a compromise with creditors than if Mariteq were placed into liquidation. Mariteq also sought to restrain Quigley's from asking the Registrar of the Court to set down for hearing two related proceedings: an application to put Mariteq into liquidation and a proceeding seeking a declaration that a compromise with creditors, into which Mariteq entered, was not binding on it. The case was heard in the High Court of New Zealand, Tauranga Registry.

The central issue was whether clause 11 of the Deed required Quigley's to agree to a substitute investigating accountant. Quigley's argued that the contract was frustrated because the agreed investigating accountants had resigned following assertions of pre-determination on their part. Quigley's contended that the resignation had the effect of frustrating the contract, primarily based on the conclusion reached in cases involving the appointment of a specific arbitrator.

The court considered the arguments from both parties and determined that the substantive issue should be determined on an application for summary judgment. The court found that it was not appropriate to make an order restraining a request to set the proceedings down, particularly in the context of a liquidation proceeding which is collective in nature. Instead, the court ordered that the liquidation and compromise proceedings be called at the same time as the proposed summary judgment application, but for mention only.

The court made several orders, including that Mariteq shall file and serve an interlocutory application for summary judgment in this proceeding on or before 3 October 2012, to enable the "frustration" issue to be determined. That application is set down for hearing (on a provisional basis) at 10am on 26 October 2012, in Auckland. The present application for an interim injunction is adjourned to the date on which the application for summary judgment will be heard. The liquidation proceeding, and the compromise proceeding, are adjourned for mention before the court, at the time the summary judgment application is heard. The court reserved all questions of costs in relation to the present application and the proceeding generally.

Orders