Norwich Properties Ltd v Mark Gray Architect - [2015] NZHC 994

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2014-412-000181 [2015] NZHC 994

UNDER the Companies Act 1993

IN THE MATTER OF

an application to set aside a statutory demand

BETWEEN

NORWICH PROPERTIES LIMITED Applicant

AND

MARK GRAY ARCHITECT Respondent

Hearing:
(bytelephone conference):
5 May 2015

Appearances:

B L Gray for Respondent (Applicant) for costs and other orders
N P D Percy for Applicant (Respondent on these applications)

Judgment:

12 May 2015

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to costs and disbursements

Introduction

[1] Norwich Properties Ltd (Norwich) commenced this proceeding with an application to set aside a statutory demand issued by Mark Gray, trading as Mark Gray Architect (Mr Gray). By this judgment, for reasons which follow, I will be granting leave to Norwich to withdraw its application but will first make costs orders and deal with a request by Mr Gray that I exercise powers under s 291(1)(a)
Companies Act 1993.

NORWICH PROPERTIES LIMITED v MARK GRAY ARCHITECT [2015] NZHC 994 [12 May 2015]

Background

[2] Mr Gray’s statutory demand was for $41,572.69, claimed pursuant to a contract for professional services (the contract). The contract adopted standard conditions of the New Zealand Institute of Architects (NZIA).1

[3] Timothy Manning, a director of Norwich, deposed that the demand was incorrectly addressed to Norwich and was therefore defective. He deposed that Norwich had not engaged Mr Gray to provide services nor had Mr Gray issued any statements or invoices to Norwich. Mr Manning exhibited statements and invoices addressed by Mr Gray to Queenstown Resort Hotels Ltd (QRHL).

[4] Mr Gray opposed the application. He filed a detailed affidavit in opposition and subsequently a further affidavit.

[5] Mr Gray referred to his provision of professional services commencing in September 2012 for a hotel development at Queenstown. He deposed that his contract was with Norwich. He first emailed the NZIA form of contract to Norwich in September 2012 for review and signature by the next week. He deposes that he was advised by Lauren McCarthy of Norwich that the contract was accepted as proposed, although he did not receive a signed copy back from her. Mr Gray’s work then continued over the following 12 months. Mr Gray initially, from 30 September
2012, sent invoices to Norwich. He deposes that he was then asked to reissue the invoices and address them to QRHL, a request which did not surprise him as many of his clients pay from different sources and contact details for QRHL were the same as for Norwich. Mr Gray deposes that the process of piecemeal work and time- charged accounts was repeated until September 2013 when he began a substantial part of his work preparing three building consent applications.

[6] On 4 September 2013, Mr Gray sent an email to Ms McCarthy at Norwich attaching an indicative fee estimate together with a copy of the 2013 NZIA contract
“for your action”. Ms McCarthy replied by email the same day recording:

1 In particular the NZIA Agreement for Architects Services (AAS)…

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: [2015] NZHC 994
Decision Date: 12 May 2015

CaseChat Overview and Summary

Norwich Properties Ltd (Norwich) sought to set aside a statutory demand issued by Mark Gray Architect (Mr Gray). The dispute centred on whether Norwich owed Mr Gray a debt for professional services under a contract. The court had to determine whether Norwich owed Mr Gray any money and if the statutory demand was valid. The court also had to decide on the costs and disbursements of the proceedings. The court found that Norwich did owe Mr Gray a debt for professional services, but the statutory demand was incorrectly addressed. The court granted Norwich leave to withdraw its application but ordered Norwich to pay Mr Gray's costs and disbursements. The court also ordered Norwich to pay the accrued interest and any balance of interest calculated to the date of payment of the principal sum. The court found that Mr Gray was entitled to recover his costs and disbursements on an indemnity basis, subject to the court being satisfied that they were reasonable. The court ordered Norwich to pay Mr Gray's costs and disbursements of the setting aside application and the present applications.

Orders