Multistop Limited v Innovate Civil and Construction Limited
[2023] NZHC 748
•5 April 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1549
[2023] NZHC 748
IN THE MATTER of an application for summary judgment BETWEEN
MULTISTOP LIMITED
Plaintiff
AND
INNOVATE CIVIL AND CONSTRUCTION LIMITED
Defendant
Hearing: 27 March 2023 Appearances:
A R Williams for Plaintiff
C F L Godinet for Defendant
Judgment:
5 April 2023
JUDGMENT OF ASSOCIATE JUDGE LESTER
This Judgment was delivered by me on 5 April 2023 pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date: ……………………………
MULTISTOP LIMITED v INNOVATE CIVIL AND CONSTRUCTION LIMITED [2023] NZHC 748
[5 April 2023]
[1] Multistop Limited (Multistop) provides plastering and stopping services in the construction sector. The director is Mr Leandro Da Silva and Mr Paul Maumau is an employee of Multistop.
[2] In 2020 and into 2021, Multistop worked on two major jobs; the first in Mangere for which it issued three invoices between 9 August 2020 and 30 November 2020. The second job was at Te Atatu and that job commenced in September 2020 with Multistop finishing on that site in May 2021 after a number of its invoices were not paid.
[3] In respect of both projects, Multistop says its contract was with Innovate Civil and Construction Limited (ICC).
[4] On the Mangere job, Multistop says it is owed $224,655.49 plus GST and on the Te Atatu job it says it is owed $217,608.78 plus GST.
[5] At the relevant times, the directors of ICC were a Mr Jason Campbell and a Mr Barry Hayes. During both projects, Mr Da Silva dealt with both Messrs Campbell and Hayes.
[6] Multistop seeks summary judgment against ICC in respect of its unpaid invoices. The complicating factor in the context of a summary judgment application is that there is no written contract for either job. The sole defence raised by Mr Campbell, the only deponent for ICC, is that Multistop did not contract with ICC on either of the two jobs, subject to the unpaid invoices. Mr Campbell says Multistop’s contracts were with another company, B&R Property Maintenance Ltd (B&R), of which Mr Hayes is the sole shareholder and director. The noteworthy feature of that claim is that it was raised for the first time by Mr Campbell in this proceeding.
Summary judgment principles
[7] It is well known that the summary judgment process is usually not suitable for the determination of issues of fact, however, if a plaintiff can show that a defendant’s allegations are utterly baseless, it may still succeed.1
[8] The onus lies on Multistop throughout to establish that ICC does not have a defence to this claim.
[9] Plainly contrived factual conflicts will not stand in the way of summary judgment.2 The well-known passage from Attorney-General v Rakiura Holdings Ltd, provides guidance as to when an apparent or supposed conflict of evidence will not stand in the way of judgment.3
In a matter such as this it would not be normal for a judge to attempt to resolve any conflicts in evidence contained in affidavits or to assess the credibility or plausibility of averments in them. On the other hand, in the words of Lord Diplock in Eng Mee Yong v Letchumanan [1980] AC 331 at 341 E, the Judge is not bound: “to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement on an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself it may be.
[10]Justice Wylie in SH Lock (NZ) Ltd v Oremland observed:4
Clearly the onus of showing there is no defence lies with the plaintiff, but the discharge of that onus is not in my view, to be frustrated by a defendant raising hypothetical possibilities in vague terms unsupported by any positive assertions or corroborative documentation.
[11] Obviously, every case turns on its own circumstances. The Court is entitled to take a robust approach to summary judgment applications but if there are unequivocal statements which amount to an arguable defence, summary judgment will not be granted.
1 See the authorities referred to in Robert Osborne (ed) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.03].
2 At [HR12.2.08].
3 Attorney-General v Rakiura Holdings Ltd (1986) 1 PRNZ 12 at 14.
4 SH Lock (NZ) Ltd v Oremland HC Auckland CP 641/86, 19 August 1986.
Was Mr Campbell acting as an agent for B&R?
[12] Multistop says all the circumstances here point to Mr Campbell having contracted on behalf of ICC. There is no dispute that Mr Campbell met with Mr Da Silva to discuss the Mangere contract which was the first in time. The following evidence is the first time Mr Campbell has asserted that the Mangere contract was not with ICC. Mr Campbell’s evidence is that in around June 2020 he met with Mr Da Silva for the purposes of introducing him to the Mangere project. Mr Campbell says in his affidavit sworn 8 November 2022:
7.Leo and I spoke about the opportunities available at the site and the scope of works required. [T]he meeting was not about agreeing terms of contract because these matters were to be discussed, negotiated with the main contractor, namely B&R, through Mr Hayes. I introduced Leo to Mr Hayes.
8.The main contractor for the Mangere project is B&R [P]roperty Maintenance Ltd, (“B&R”) run by Barry Hayes. ICC does not have a contract with Multistop. It introduced Multistop to B&R. B&R made all the payments to Multistop.
[13]Mr Campbell goes on to say that he recommended Multistop to B&R.
[14] Mr Campbell’s evidence is noteworthy for what it does not say. The project involved the construction of 22 terrace houses. This was a large project and as the amounts in issue show, involved considerable sums. Mr Campbell does not say:
(a)That he told Mr Campbell at any time that the Mangere project was being undertaken by B&R. The evidence of Mr Da Silva is that the Mangere job had ICC hoardings/signage on it and that Mr Campbell wore his ICC “high vis” on site.
(b)That he was acting as an agent, let alone acting as an agent for B&R. Mr Campbell does not assert he was acting as an agent but as “a go-between”. Saying that ICC “introduced Multistop to B&R” is far removed from saying that ICC communicated that it was acting as an agent for “B&R” or that Multistop’s contract would be with B&R. In fact what Mr Campbell says at the end of [7] of his affidavit, set out
at [12] above, is that he introduced Mr Da Silva to Mr Hayes, but as noted, Mr Hayes was also a director of ICC.
(c)That he denies he agreed the scope of the work and its cost for the Mangere job with Mr Da Silva – as claimed by Mr Da Silva in his evidence.
(d)That Mr Campbell says he recommended Multistop to B&R does not take his claim of only being a go-between any further when at the cost of labouring the point, Mr Campbell does not claim to have explained this alleged limited role. Dealings between ICC and B&R to which Multistop was not a party are irrelevant to ICC’s case that in its dealings with Multistop it was acting only as a “go-between”.
[15] Mr Campbell does not directly contradict Mr Da Silva’s affidavit where he said:
In or around June 2020, Jason and I verbally agreed that Multistop would complete remodelling work on site at 630 Massey Road.
[16] Mr Campbell’s paragraph [7] skirts around this issue. He talks about what he understood the meeting was to be about but does not expressly deny Mr Da Silva’s evidence as to what actually happened at the meeting. Mr Campbell, on his case, was not acting as agent of B&R so his actions cannot have brought about a contract with Multistop and B&R. There is no direct evidence of any agreement between Multistop and B&R.
[17] I am left with the impression that Mr Campbell’s evidence was carefully written.
Is Mr Campbell’s assertion of being only a “go-between” consistent or inconsistent with the contemporary documents?
[18] I have already noted the Mangere site featured ICC’s name. All of the invoices raised by Multistop were addressed to ICC. At no point did ICC ask for the invoices to be re-addressed. The invoices for the Mangere job are labelled “Payment Claims”.
It seems those invoices may not have qualified as Payment Claims but nonetheless, in the construction industry, when what purports to be a Payment Claim is received which is not payable by the addressee, one would expect a response.
[19] Mr Campbell sent an email to Mr Da Silva dated 6 August 2020 which he signed off as director of ICC. The email was copied to Mr Hayes and concludes having referred to other jobs: “and then our pride and joy … !!!! Massey Road, Mangere … !!! to start this month being mid to late August 2020.” This email is Mr Campbell referring to the Mangere job as that of ICC’s.
[20] During 2020, 2021 and into 2022, there were promises of payment by Mr Campbell. While these text messages refer to Mr Hayes again, he was a director of ICC up until 1 October 2021. In a text from October 2020, Mr Da Silva said to Mr Campbell they needed to catch up and that “I’ve spent $200k for Massey Rd [and] I haven’t received any payment for that job”. Mr Campbell replied; “OK … have you rang barry?”. Mr Da Silva replied that he had tried but Barry did not answer. Mr Campbell replied: “Pretty sure he’s paid you … sorry mate … I didn’t know barry didn’t pay u … money coming in tomorrow and Thursday and Friday.”
[21] In a later text, Mr Da Silva sent a text to Mr Hayes saying; “Do I have money coming through today?. For mangere and Te atatu?”. Mr Hayes replied: “Will get paid. Sorry for not getting back to you i am waiting on the payment. They said mite be tonight so I will let you know. Tomorrow morning”.
[22] In messages in December 2020, Mr Da Silva messaged Mr Campbell for an update on payment and Mr Campbell replied: “… hopefully Friday we got 3 payments
…”. Mr Da Silva replied: “Please has been two months without getting [payment] for ICC for two sites”. The response was “We are at [the] mercy of [the] banks paying us
… Dean signed our claims last week.”
[23] This last exchange is significant. Mr Da Silva was chasing payment of invoices made out to ICC and he refers to there being no payment for two months “… for ICC for two sites”. Mr Campbell, rather than saying payment was the responsibility for B&R said: “We are at the mercy of the banks” (emphasis added).
[24] Mr Campbell’s continued involvement in demands for payment and in the project as a whole, and as will be seen below, his request for pricing on the Te Atatu job is not consistent with his evidence that his role in these projects was simply to make introductions. Mr Campbell does not in fact explain the nature of ICC’s involvement in the projects. The closest he comes is saying that ICC “Facilitated and oversaw works”. When, even on Mr Campbell’s evidence, it is appreciated that he and Mr Da Silva spoke about the opportunities available at Mangere and the scope of works required, that ICC facilitated and oversaw the works; that it received the invoices without demure; and made promises of payment. For Mr Campbell to say only upon the issuing of proceedings that ICC was not the contracting party, is simply not credible.
[25] Mr Campbell’s evidence would have had to engage much more directly with Mr Da Silva’s evidence, it would need to have explained Mr Hayes involvement in more detail. There is no evidence from Mr Hayes and no evidence as to why that is the case.
[26] In June 2021 when Mr Hayes, emailing from an ICC address, took issue with the quality of the painting work at Te Atatu said: “I am not saying that you [won’t] get paid but the painting was not done properly”.
[27] In a later email on 3 June 2021, Mr Hayes again from his ICC email address said: “We are in a hard place at the moment and I know it doesn’t help you”. He refers to the painting work at Te Atatu and that other painters are finishing the work and says: “… we have to wait until they finish for us to be paid. You we be paid when we do”. Again, this is all in the context of invoices addressed to ICC with Mr Campbell and Mr Hayes responding to demands that these invoices be paid from ICC email addresses.
[28] The only place in which B&R is mentioned is that in some emails Mr Hayes is copied in both to his ICC address and to another address: Barry@B&R.co.nz.
[29] Mr Godinet placed significance on a text exchange between Mr Da Silva and Mr Campbell. Mr Da Silva asked: “Hi Jason what time do you want to meet? Are
you guys bringing the contract agreement? Or do you want me to bring one?”. Mr Campbell sought to defer the meeting as he had suffered an injury. A few days later, Mr Campbell asked if Mr Da Silva could email a contract through. Mr Da Silva replied: “Yep will do”, but that never occurred. Mr Godinet submitted that had Mr Da Silva sent a contract, the issue of the correct contracting party would have been clarified. In my view, this exchange is significant because it shows Mr Campbell was doing just more than being a “go-between”. He was asking for a contract to be sent through. Mr Campbell was not a director of B&R and if anything, this exchange of evidence assists Multistop.
The true extent of the credibility dispute
[30] Given the limited nature of Mr Campbell’s evidence, there does not appear to be a significant credibility issue here. Had Mr Campbell’s evidence been that he told Mr Da Silva he was acting as agent for B&R, that would be different. However, his evidence does not found a basis for me to find there is a reasonably arguable issue that ICC was acting only as a go-between.
[31] If Mr Campbell was right, he would have it that only having made an introduction of one company to another, in respect of a project in which ICC had no interest, he then stood by without protest as Multistop sent ICC invoices which, over both jobs, exceeded $750,000.
[32] When the limited nature of Mr Campbell’s evidence is placed alongside the other evidence that Multistop’s contract was with ICC, I am satisfied this is a case where Multistop is entitled to summary judgment. It is, frankly, inconceivable that when ICC was being chased for payment and indeed when letters of demand were first sent by Multistop’s solicitors, that ICC did not claim it was not party to the contract and its role had only been as a “go-between”.
[33] Mr Da Silva produced a letter of demand sent by Multistop’s solicitors to ICC dated 23 July 2021 which concluded with a recommendation that ICC obtain legal advice. A further letter from Multistop’s solicitor is produced, dated 12 August 2021 and addressed to a barrister (not Mr Godinet), in reply to that barrister’s email and a voice mail from Mr Hayes on 29 July 2021. Mr Campbell said he had not had
contact with the barrister to whom Multistop’s solicitors wrote. The letter refers to Mr Hayes having left a voicemail that suggested Multistop’s work had to be redone. There is nothing in Mr Campbell denying having contacted the barrister. Mr Hayes was a director of Multistop at the time of his communication and it was presumably Mr Hayes who instructed solicitors on behalf of ICC who engaged counsel. If Mr Hayes did not keep Mr Campbell informed of those steps, that is a matter between them.
[34] It is clear that an agent who is intending to contract only on behalf of a principal must make their role as agent very clear. If there had been any uncertainty around that matter when Mr Campbell first received invoices made out to his company, the obligation was on ICC which thought it was only being a “go-between” (on Mr Campbell’s evidence) to correct the position. Yet ICC did nothing over an extended period of time and only raised this present defence after proceedings were issued. The Court is rightly sceptical of alleged defences that are only raised when claims for payment are made, let alone only raised for the first time when proceedings are issued.
[35] The payments that were made of the invoices addressed to ICC were apparently made by B&R. I do not see that as being significant. The issue is what was communicated to Multistop at the time the contracts were made. It is not uncommon for invoices to be paid by someone other than the debtor. Frankly, creditors are concerned to see that the money comes in, not where the money comes from.
[36] Mr Campbell’s evidence as to the discussions at the time of the Te Atatu contract is virtually non-existent. ICC’s defence seems to be that Multistop should somehow have known that it was contracting with B&R on the separate Te Atatu project.
[37] ICC’s position in respect of the Te Atatu job is even weaker than in respect of the Mangere job. I say that as on 2 September 2020, Mr Campbell emailed Mr Da Silva in respect of the Te Atatu job. The email advised that the job was starting on 1 October 2020, asked for a price and advised the number of apartments.
A Dropbox link with plans for the project was included. At the foot of Mr Campbell’s email appears:
Project Director / Operations Manager [a telephone number]
INNOVATE Civil and Construction Limited
[38]Mr Campbell says in his evidence:
ICC’s primary business involves civil construction, project management, sub-contractor recommendations and introductions and quantity surveyor services and pricing.
Just how ICC is in the business of “introductions” is not explained, but the range of roles described by Mr Campbell emphasises the need for ICC to be very clear in what it was doing for who and when it engages with others. Mr Campbell does not say in respect of either job that he explained the limited extent of ICC’s role to Mr Da Silva. All the circumstances point to ICC having engaged Multistop to work on both sites.
Workmanship issues
[39] I have already noted the passing reference to painting issues at Te Atatu. These are not expressly relied on by ICC in defending the summary judgment, as such would have been inconsistent with its position that it was not the contracting party. Given I have not accepted that position, I can deal briefly with the issue of workmanship.
[40] It is clear from the email of Mr Hayes dated 3 June 2021 that different painters had been brought on to the job to address the alleged workmanship issues at Te Atatu (without prior reference to Multistop). There is virtually no detail as to the workmanship issues in ICC’s evidence. By this time, Multistop had ceased work on site because it had not been paid. However, there is clear authority that workmanship issues cannot be relied on to withhold payment unless the tradesman has been given a chance to rectify their own work.5
[41] There is no suggestion Multistop were called upon to rectify workmanship issues before another contractor was enlisted to do so.
5 T & P Developments Ltd v Yu & Ors HC Auckland CP 18-SD99, a decision of her Honour Justice Glazebrook upheld on appeal Yu v T & P Developments Ltd [2003] 1 NZLR 363 (CA); and Smeaton Construction Ltd v Garrett Pasquale Ltd [2012] NZHC 3079.
[42] Accordingly, I am satisfied Multistop has established that it is entitled to summary judgment.
Orders
[43]The following orders are made in favour of Multistop against ICC.
[44]In respect of the Mangere job the orders are as follows:
(a)Judgment in the sum of $224,655.49 (plus GST).
(b)Interest on the invoiced sums from the date they fell overdue to the date of judgment, calculated in accordance with sections 10-16 of the Money Claims Act 2016.
(c)Interest on the judgment sum from the date the judgment is entered, to the date the judgment debt is paid in full, calculated in accordance with sections 10-16 of the Money Claims Act 2016.
[45]In respect of the Te Atatu job, there are the following orders:
(a)Judgment in the sum of $217,608.78 (plus GST).
(b)Interest on the invoiced sums from the date they fell overdue to the date of judgment, calculated in accordance with sections 10-16 of the Money Claims Act 2016.
(c)Interest on the judgment sum from the date the judgment is entered, to the date the judgment debt is paid in full, calculated in accordance with sections 10-16 of the Money Claims Act 2016.
[46] In respect of costs, Multistop sought costs on a solicitor-client basis. While counsel did not address the issue of costs, my initial impression is that this does not warrant indemnity costs. If counsel for Multistop wishes to pursue indemnity costs, then counsel is to file a memorandum justifying such an award within five working
days of the date of this Judgment, such memorandum to be not more than five pages. If no memorandum is filed then the order of the Court shall be that Multistop is entitled to costs on a 2B basis plus disbursements as fixed by the Registrar. If a costs memorandum is filed, ICC’s counsel is to reply within five working days.
Associate Judge Lester
Solicitors:
Anthony Harper, Auckland (for Plaintiff) Henley-Smith Law, Auckland (for Defendant)
Copy to counsel:
C F L Godinet, Barrister, Auckland (for Defendant)
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