MRCagney Pty Limited v GSRD Developments Limited

[2012] NZHC 1333

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-6885 [2012] NZHC 1333

BETWEEN  MRCAGNEY PTY LIMITED Plaintiff

ANDGSRD DEVELOPMENTS LIMITED Defendant

Hearing:         11 June 2012

Appearances: D J Heaney SC and S H Macky for Plaintiff

A W Gillion, director of Defendant

Judgment:      13 June 2012

JUDGMENT OF KEANE J

This judgment was delivered by  on  13 June 2012 at 12pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Heaney & Co, Auckland for Plaintiff

MRCAGNEY PTY LIMITED V GSRD DEVELOPMENTS LIMITED HC AK CIV 2010-404-6885 [13 June

2012]

[1]      In September 2009 MRCagney Pty Limited, transportation and planning consultants, lodged with the Franklin District Council, on behalf of GSRD Developments Limited, a development company, an application and supporting documents for resource consent for a supermarket and mixed use development on land on Great South Road.

[2]      In tandem, MRCagney also assisted GSRD at a 12 day hearing, between 24

August   -   23   September   2009,   before   independent   commissioners   hearing submissions on the Council's Plan Change 24. GSRD's strategy at the hearing was to ensure that the ultimate shape of the scheme change was conducive to its proposed development and MRCagney witnesses gave evidence at the hearing.

[3]      In their recommendations to the Council, which the Council adopted on 25

February 2010, and notified publicly on 16 March 2010, the independent commissioners did not support in a significant way the alterations to the plan change that  GSRD  required.  What  effect  that  had  on  GSRD's  application  for  resource consent is not stated on the face of the pleadings but apparently it did not proceed.

[4]      Between May - November 2009 MRCagney invoiced GSRD nine times. In total these invoices came to $373,538.82. On 21 August 2009, before the hearing, GSRD met the first two of those invoices, $37,402.59. In October 2010 MRCagney brought this proceeding for the balance.

[5]      GSRD, in its statement of defence, put in issue the value of MRCagney's work and contended that the sum invoiced exceeded an agreed ceiling. It also counterclaimed, contending that MRCagney had been negligent and that this was why  the  commissioners'  recommendations  had  proved  unfavourable.  It  claimed

$2.3M damages.

[6]      In October 2011 the proceeding was set down for a settlement conference on

20 February 2012 and then, if need be, for a five day fixture commencing on 11 June

2012. In the event the fixture proved to be called for and was confirmed. Further

timetabling orders were made. On 7 June 2011, as the proposed trial Judge, I convened a telephone conference. MRCagney had complied with the timetable but GSRD was in default.

[7]      Mr A W Gillion, a director of GSRD, explained that it no longer had the ability to fund the case or be represented. Its prime assets, two properties, were both the subject of mortgagee sales. One had already been sold at an undervalue. He was unable to say what the likely fate of the other was.

[8]     After discussing the possibilities with Mr Gillion and Mr Heaney SC, MRCagney's senior counsel, I accepted that one way forward would be for MRCagney's debt claim to proceed uncontested, if that were truly the case, and to adjourn GSRD's counterclaim for hearing on a later date. I accepted also that GSRD,

with MRCagney's consent, might be represented in the first phase by Mr Gillion.[1]

[1] Re G J Mannix Ltd [1984] 1 NZLR 309.

[9]      During this conference Mr Heaney SC made it clear that if judgment were entered on the debt, MRCagney would seek to enforce it and GSRD would in all likelihood face liquidation. Mr Gillion then asked for the conference to be adjourned until the following morning so that he could reconsider GSRD's position on the debt question. I agreed.

[10]     On  8  June  2012,  during  the  resumed  telephone  conference,  Mr  Gillion accepted that MRCagney had carried out work within the scope agreed, that GSRD had no grounds for questioning the invoices rendered, and that the debt might be proved formally by evidence from Mr N R Mumby, the MRCagney manager, who had coordinated the project. He reserved the right to pursue GSRD's counterclaim in negligence.

[11]     On 11 June 2012 Mr Mumby confirmed his brief of evidence on oath and produced the invoices and related documents. He confirmed that MRCagney claimed not just the outstanding invoiced sum but interest at its overdraft rate plus two per

cent on any invoice unpaid after 20 days, in this relying on its standard terms of

engagement. Finally, he included MRCagney's legal costs and disbursements. The total, with GST, came to $485,180.03.

[12]     Mr Gillion questioned whether GSRD had agreed to MRCagney's standard terms. Those produced, he pointed out, had been signed by MRCagney but not by GSRD. He then accepted, however, that GSRD might well have received those terms and accepted them, if not on this project then earlier. Instead, he contended, MRCagney had not always charged interest for late payment. It must be deemed to have varied its terms in that respect or waived the right. He did not wish to question Mr Mumby.

[13]     As I then said, I accepted that Mr Mumby's evidence sufficed to establish that MRCagney was entitled to judgment in the sum claimed, including interest under its standard terms of engagement. I gave MRCagney judgment for $485,180.03. I adjourned GSRD's counterclaim on terms proposed by MRCagney, and consented to by Mr Gillion. They are these:

(a)       GSRD's briefs of evidence are to be served as soon as possible but in any event by 31 August 2012.

(b)       MRCagney's reply briefs of evidence are to be served 21 days later.

(c)       The Court is to allocate the first available hearing date for three days after 12 October 2012.

(d)GSRD (if legally represented) is to prepare the bundle of documents seven days before trial.

[14]     There  is  to  be  a  telephone  conference  with  an  Associate  Judge  on  14

September 2012, or on the nearest practicable date, to confirm the fixture and to resolve any outstanding pre-trial issues.

P.J. Keane J