National Institute of Water and Atmospheric Research Limited v The Trustees of the Shallard Family (no 2) Trust

[2019] NZHC 749

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2019-485-041

[2019] NZHC 749

BETWEEN

NATIONAL INSTITUTE OF WATER AND ATMOSPHERIC RESEARCH LIMITED
Plaintiff

AND

THE TRUSTEES OF THE SHALLARD FAMILY (NO 2) TRUST

Defendants

Hearing:	9 April 2019
Counsel:	N M H Whittington and M A Hori Te Pa for Plaintiff No appearance for Defendants
Judgment:	9 April 2019

JUDGMENT OF ELLIS J

[1]    The National Institute of Water and Atmospheric Research Limited (NIWA) entered into a contract with the trustees of the Shallard Family (No 2) Trust, being Bruce Shallard, Jocelyn Shallard and John Fokerd (the Trustees). Under the final variation of the contract the Trustees were to pay NIWA $4,178,526 plus GST, in return for services provided by NIWA.

[2]NIWA subsequently performed all its obligations under the contract.

[3]    The Trustees made part-payments under the contract, the most recent being on 9 July 2018. This left a balance owing of $1,583,858.90 including GST.

NATIONAL INSTITUTE OF WATER AND ATMOSPHERIC RESEARCH LTD v THE TRUSTEES OF THE SHALLARD FAMILY (NO 2) TRUST [2019] NZHC 749 [9 April 2019]

[4]    In September NIWA demanded payment of the Trustees. Mr Shallard confirmed that the Trustees were unable to pay the remainder of the contract debt.

[5]On 10 December 2018 a settlement agreement was executed whereby:

(a)The Trustees agreed to pay NIWA the balance of the debt by 1 February 2019, and NIWA would forbear from commencing a proceeding until that time. Interest on the debt due would be charged at a rate of 11.5 per cent, compounding monthly.

(b)The Trustees agreed to sign and execute a Notice of Admission of Claim, and deliver a copy to NIWA’s solicitors, who would hold it in escrow. If the Trustees failed to make payment by 1 February 2019, NIWA’s solicitors were authorised to file and serve the executed Notice of Admission of Claim when it commenced proceedings.

[6]    The Trustees did sign and execute a Notice of Admission of Claim, in counterparts, on 13 December 2018.

[7]    The Trustees failed  to pay NIWA the balance of the  debt due and owing by  1 February 2019. To date, the Trustees have not made any further payment of the balance of the debt due and owing since the last payment received on 9 July 2018. The balance owing as at 1 April 2019 was $1,734,280.32 including GST and interest.

[8]    The plaintiff filed its statement of claim, together with the Notice of Admission of Claim on 4 February 2019.

[9]    Because the executed Notice held in escrow by NIWA’s solicitors and filed in Court was an electronic copy, on 25 February 2019 Cull J issued a minute saying that:

(a)on entry of judgment under High Court Rule 15.16, the Court should have original signed documents;

(b)an affidavit of service should be filed; and

(c)the matter should be set down for a short formal proof hearing.

[10]   An affidavit of service has since been filed, as have affidavits setting out the above narrative and annexing relevant documents (including the settlement agreement). The Trustees’ solicitors have also advised that they do not hold the original signed Notice of Admission of Claim by the trustees, but rather counterparts in electronic form. They advise it is unlikely that they will be able to obtain the original, if it still exists. It seems that the Trustees’ solicitors have also never held the original signed Notice.

[11]The formal proof hearing was listed before me this morning.

[12]   To the extent it is necessary to do so, I accept Mr Whittington’s invitation to apply rr 1.5 and 1.9 and waive compliance with r 5.6 (which requires the signature on documents filed to be an original signature1). I consider it would be in the interests of justice to do so, in light of the following matters:

(a)the terms of the settlement agreement (including cl 3.2 which specifically provided that NIWA's solicitors should be provided a “copy” of the executed Notice of Admission of Claim to hold in escrow);

(b)the acceptance of service on behalf of the Trustees; and

(c)the fact that the Trustees’ solicitors have also never held the original

signed Notice of Admission of Claim.

[13]   I therefore regard the Notice of Admission of Claim as valid and effective in terms of r 15.16. The plaintiff is entitled to judgment in accordance with it.

1      It is unnecessary to get into the technical requirements of r 5.6 means in this judgment. The fact that the document was accepted for filing does appear to have some bearing on the matter.

Orders

[14]   The defendants have admitted that they are liable to the plaintiff for breach of contract. Accordingly, the plaintiff is entitled to:

(a)judgment in the sum of $1,583,858.90, being the amount of the debt due under the contract, including GST;

(b)interest under s 22 of the Interest on Money Claims Act 2016 on that sum, charged at 11.5 per cent per annum compounding monthly.

[15]   The plaintiff also sought costs, which were not dealt with in the Notice of Admission   of   Claim.   After   obtaining   further   instructions   this   morning,    Mr Whittington was able to confirm that this aspect of the claim was not be pursued. I record that, for the avoidance of doubt.

Rebecca Ellis J