MJN McNaughton Limited v Thode - [2012] NZHC 982

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2011-404-001590 [2012] NZHC 982

UNDER the District Courts Act 1947

BETWEEN MJN MCNAUGHTON LIMITED Appellant

ANDRICHARD JAMES THODE Respondent

Hearing: 10 May 2012 (On the Papers)

Counsel: S J Ropati for the Appellant
G P Blanchard for the Respondent

Judgment: 10 May 2012

JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 10 May 2012 at 3.00 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel: G P Blanchard P O Box 1235 Shortland Street Auckland 1140 for the
Respondent

Solicitor: S J Ropati P O Box 90232 Victoria Street West Auckland 1142 for the Appellant

Copy To: Macky Roberton Limited (M A Roberton) P O Box 37622 (DX CP31503) Parnell Auckland 1151

MJN MCNAUGHTON LTD v THODE HC ROT CIV-2011-404-001590 [10 May 2012]

Facts

[1] The appellant, MJN McNaughton Limited (McNaughton), is a manufacturer of timber joinery. The respondent, Richard James Thode, was a director of Nikau Living Ltd (Nikau), a building company currently in liquidation. In March 2008, McNaughton delivered timber joinery, which it had manufactured, to a building site of a residential building that was being constructed by Nikau. McNaughton was not paid for this joinery.

[2] As Nikau then went into liquidation, McNaughton brought proceedings in the District Court against Mr Thode claiming that it was entitled to recover the cost of joinery from him, as he was a guarantor under the terms of supply between McNaughton and Nikau. McNaughton was unsuccessful and appealed to this Court.

[3] In the District Court, Mr Thode had successfully denied that there was a contract between McNaughton and Nikau to supply the joinery that was delivered in March 2008.

[4] On 21 October 2011, I delivered an interim judgment in which I found at [26] that there was a contract to supply the joinery which McNaughton had delivered to Nikau’s building site. At [31] of the interim judgment, I found as follows:

The joinery was delivered some time in March 2008, but Nikau did not pay for the joinery. It was stored on site in a garage and none of it was used in the building project. The appellant discussed with Mr Lamb, who was buying the Victoria Avenue property, the possibility of him purchasing the joinery, but the price he was prepared to pay was not acceptable to the appellant. The sale of the property was to settle in May 2008, but shortly before the settlement date, the appellant removed the joinery from the site. It remains with the appellant.

[5] At [32]-[35] of the interim judgment, I identified what I described as outstanding issues that had not been addressed, either in the District Court or by the parties in the appeal to this Court. I saw those issues as pivotal to the outcome of the appeal. I provided the parties with the opportunity to address those issues. They were also given the opportunity of inviting me to…

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 MJN McNaughton Limited v Thode

Details

AGLC: MJN McNaughton Limited v Thode [2012] NZHC 982
Case: [2012] NZHC 982
Decision Date: 10 May 2012

CaseChat Overview and Summary

MJN McNaughton Limited, a timber joinery manufacturer, delivered joinery to a residential building site in March 2008 but was not paid. The building company, Nikau Living Ltd, went into liquidation, and McNaughton sought to recover the cost of the joinery from Richard James Thode, a former director of Nikau, who had guaranteed the payment of the joinery cost. The District Court found there was no contract for the joinery supply, but the High Court overturned this decision, finding a contract existed. The High Court was tasked with determining whether McNaughton could recover the cost of the joinery from Thode under the guarantee, and whether the Sale of Goods Act 1908 applied to the contract.

The court found that the contract was indeed governed by the Sale of Goods Act 1908, and that the joinery constituted "goods" under the Act. The court also concluded that the guarantee only covered liability for the contract price, not damages for non-acceptance. The key issue was determining the nature of the breach by Nikau and the liability arising therefrom. The court found that property in the joinery had passed under the default rules of the Sale of Goods Act, as the joinery was in a deliverable state, unconditionally appropriated to the contract, and there was no reservation of the right of disposal. The court held that McNaughton was entitled to sue for the contract price, as the buyer had wrongfully neglected or refused to pay for the goods according to the terms of the contract. The court further found that McNaughton's repossession of the joinery did not affect its right to sue for the contract price.

The court concluded that McNaughton was entitled to recover the contract price for the joinery of $30,177.01 from Thode. The court also found that McNaughton might be entitled to claim pre-judgment interest under the contractual terms, but the question of whether McNaughton was entitled to claim contractual interest post-judgment instead of interest under the Judicature Act 1908 remained to be determined. The parties were granted leave to file memoranda on the issues of payment of interest and costs if they could not resolve them.

Orders