Premier Hospitality & Events Limited v Voyage Affaires Limited HC Auckland Civ-2008-404-003826
[2008] NZHC 2586
•19 September 2008
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2008-404-003826
BETWEEN PREMIER HOSPITALITY & EVENTS LIMITED
Applicant
AND VOYAGE AFFAIRES LIMITED Respondent
Hearing: 18 September 2008
Appearances: JEM Lethbridge for Applicant
S Webster for Respondent
Judgment: 19 September 2008
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on 19 September 2008 at 3pm
Pursuant to r 549(4) of the High Court Rules
Registrar/Deputy Registrar
PREMIER HOSPITALITY & EVENTS LIMITED V VOYAGE AFFAIRES LIMITED HC AK CIV-2008-404-
003826 19 September 2008
[1] The applicant, Premier Hospitality & Events Limited (“Premier”) applies to set aside the respondent, Voyage Affaires Limited’s (“Voyage”) statutory demand.
[2] The statutory demand claims the sum of €59,314, together with NZ$25,000. Voyage says Premier agreed to pay these sums in terms of two letters from Premier to Voyage on 19 and 21 December 2007.
Background
[3] Premier specialises in organising and hosting corporate events. In late-2006 it began negotiations to receive tickets to the Rugby World Cup 2007 (“RWC”) that was being held in France, from a ticketing agent. Premier agreed to provide tickets to various games at the RWC to individual purchasers for the companies promoting the RWC.
[4] Voyage purchased a large number of tickets from Premier on behalf of clients, for which it paid.
[5] Premier claims that due to the default of the ticketing agent providing the tickets to Premier, Premier was unable to supply some tickets to Voyage and to others that paid for them.
[6] After the RWC an issue arose regarding the value of tickets unable to be supplied to Voyage.
[7] Premier was a company operated by three directors, Robert Gill (“Bob”), Anthony Regan (“Tony”), and Ian Fraser (“Ian”). Carol Morgan (“Carol”) was the managing director of Voyage. It was she with whom Bob, Tony and Ian
communicated concerning the matters in issue between the respective companies. Ian has filed an affidavit in support of Premier’s application. As well, Tony filed an affidavit in reply to that filed by Carol.
[8] Ian deposes that on 6 November 2007 he received a letter from Carol setting out a claim for cancelled tickets. Carol sought €117,680 to cover cancelled tickets and NZ$33,221.15 for emotional harm.
[9] On 16 November 2007 Ian wrote to Carol to advise Premier had instructed its lawyers to retrieve the money owed by their ticketing agent. He said refunds should be received by Premier by 7 December 2007 and upon receipt of those, Premier’s intention was to pay all parties on a pro rata basis.
[10] Carol responded by email, setting out the basis of her claim.
[11] On 6 December 2007 Ian wrote to Carol to update her on Premier’s progress to obtain the recovery due to it in order to meet the claims of Voyage and others. He advised that Premier was working towards a settlement date of 14 December.
[12] On 18 December 2007 Tony and Ian met with Carol at her offices to discuss a proposal. He said at that meeting they fully explained the terms of offer they would be making to all parties. It would be reliant on Voyage and another accepting
66% of the amount owed in Euros.
[13] On 19 December 2007 Ian wrote to Carol setting out an offer in terms they had discussed in their meeting the previous day. The letter stated:
Go forward proposal
The proposal that we outlined is summarised below.
…
• Subject to the two large creditors agreeing to be paid now 66% of what is owed by Premier Hospitality… Premier Hospitality will be able to pay the minor RWC ticket clients 100% of what either is owed or what has been agreed between Premier Hospitality and the client.
• The amount of the total refund proposed by Premier Hospitality for
Voyage Affaires is €89,870… 66% of this would equate to €59,314.
• Premier Hospitality does acknowledge that the balance of what is owed by Premier Hospitality to Voyage Affaires is €30,356.
It has been agreed that this debt is forgiven.
If you agree to this proposal, please sign this letter in the space provided.
[14] Ian states that over the next two days he and Carol had a number of telephone discussions about the agreement. He said Carol advised she was not prepared to accept the offer and required an additional amount. She mentioned applying to her insurer to recover the 34% she would lose by Premier’s proposal. Ian says he clearly advised Carol that any agreement reached would be on the basis that Voyage indemnified Premier against any additional claims from Voyage, their insurers or their clients.
[15] Later, and having consulted with Bob and Tony, Ian wrote to Carol by letter dated 21 December 2007:
Further to my letter to you of 19 December, the purpose of this communication is to confirm to you in writing that Premier Hospitality, based on this amount being full and final payment of all claims relating to Voyage Affaires and clients, agrees to pay Voyage Affaires NZ$25,000 in addition to the guaranteed payment to your company of €59,314 as part of the total settlement proposed by Premier Hospitality of €89,870.
Premier Hospitality will still repay the forgiven sum of €30,556 should Premier Hospitality receive any money from either our ticketing agent, Alain Barataud or our insurance company – these monies will be repaid on a pro rata basis with Hawksley Business.
Carol, to confirm this agreement we still require you to sign and fax back my earlier letter of 19 December. In addition on the basis that you do receive the sum of $25,000, you agree to indemnify Premier Hospitality against any additional claims from your company, insurers or clients.
[16] By email of same date, Carole responded:
I will sign and fax after taking advice. I am concerned about your comment regarding the insurers. Am happy to sign on behalf of Voyage and clients but given timeframe cannot speak on behalf insurance company. Regards. Carol. PS hope to have advice by Monday.
[17] In response to an email from Tony, Carol, by email dated 8 January 2008, wrote:
Hi guys, as I mentioned on the Friday before Xmas I cannot sign either letter the way they are written. I have taken advice from my lawyer I will now run the correspondence through my insurance company next week when I return to Auckland. I am keen to reach a satisfactory settlement as stated on the phone on Friday 21 December. If you want to call I suggest you call me on my cellphone.
[18] Ian said that Premier did not hear from Carol for nearly two months, until he had a telephone conversation with her about the offer. He said she advised she was prepared to accept the offer on the terms set out in Ian’s letter dated 21 December
2007, but wanted clarification on what she needed to do to conclude the deal, and advice about timeframes for payment.
[19] Ian states that later, on 12 March 2008, Tony emailed Carol advising that the directors of Premier had met the previous evening with its advisors and had agreed “that we needed to gain clarity and an update from our insurers prior to moving forward with any agreement”. He said the email advised they were awaiting a letter from their insurers before they could move the matter forward.
[20] By immediate response Carol emailed, advising she believed she had accepted the offer, and stating if it was not settled by Friday of that week she would be taking her story to the media and initiating legal proceedings immediately.
[21] About two hours later, Carol emailed Tony, stating that Premier’s offer did not have a time limit and she believed she had accepted it by her earlier communications.
[22] In response, on 14 March 2008 Tony emailed Carol and advised of the communications Premier had with its insurers, Lumley. In respect of the Voyage claim he advised:
They (and we) understood and were advised that you were discussing/briefing your legal and insurance advisors, as we understood you were. This obligated us to advise that a legal claim may be pending – this is why we needed to communicate with them and gain their advice. They said they will not provide any advice until they have read the opinion and come back to us formally. So, in short we cannot come back to you until they have responded to us.
[23] On 18 March 2008 Premier received a letter from Lumley advising they would require more information before they could make a decision about the claim. Tony emailed a copy of this letter to Carol, advising they would keep her updated on correspondence.
[24] On 7 April 2008 Carol emailed Tony and Ian asking for an update on what was happening regarding the offer of settlement to Voyage. Ian says that because Premier had not yet met with Lumley, they had been unable to update Carol.
[25] In response to the statutory demand, Ian proclaims that Premier disputes the amounts are owed at all. This, on the basis that there was no concluded agreement or contract to pay this amount because Carol did not accept the offer made with all of the terms. In particular, she did not accept the requirement that Premier be indemnified from any future claims by either Voyage, the insurers of Voyage, or the clients of Voyage.
[26] Ian advises Premier disputes the amounts are owed for the further reason that the original offer to pay 66% of the amount in Euros was on the basis that the offer was accepted along with the other parties to the settlement accepting the offer, ie before Christmas 2007.
[27] Ian says the offer of NZ$25,000 was a goodwill gesture in order to bring a speedy resolution to the matter back in December 2007, so that all outstanding claims could be dealt with and concluded together. Once the delays took place, the need for that goodwill gesture became obsolete.
[28] Ian says that in the period between January and March, when Carol “finally communicated to me verbally that she would be prepared to accept the offer”, Premier’s insurers had become involved. He states that Premier was not then, nor now, in a position to settle without the agreement of its insurers, and that puts the entire amount owed in question.
Opposition to the application
[29] Voyage claims:
i)Premier is bound by the terms of its settlement offer set out in its letters of 19 and 21 December 2007.
ii)There was no variation or withdrawal of that offer prior to its acceptance.
iii)Premier’s evidence confirms the offer was accepted in terms set out in the letter of 21 December 2007.
iv)Premier’s refusal to pay on the agreed terms can be characterised as an inability to pay, and accordingly its application to set aside the statutory demand should be dismissed.
[30] In her affidavit in opposition Carol deposes that on 5 March 2008 she accepted Premier’s settlement offer, and that at no time between did Premier withdraw the offer or modify it in any way.
[31] Carol deposes that on 5 March 2008 she accepted the offer made on the terms presented, including the indemnity required in the 21 December 2007 letter from Premier. As to the circumstances of acceptance, she deposes:
(a) At 12.03 p.m. on 5 March 2008 she called Ian’s mobile phone number. She spoke to him briefly, advising him she was accepting the offer, and asked, “what did we need to do from here?” Ian advised she would be receiving an email from Tony.
(b) At midday on 6 March 2008 she had not received an email from Tony, so she emailed Ian with just a Subject line “Email from Tony??”
(c) By late afternoon 6 March 2008 she still had not received an email from Tony, and had received no reply to her email to Ian. At 7 p.m. she called Ian on her mobile phone, but received no reply. She left a message asking when she would hear from Tony.
(d) On 7 March at 10.08 a.m. she received an email from Tony advising her that he and Ian were meeting that afternoon and that Tony would get back to her on Monday morning, 10 March.
(e) At 3.33 p.m. on 11 March 2008, Carol called Ian on his mobile.
She says Ian told her it was “all totally out of his hands and Tony would be contacting me”. Carol asked Ian to text her Tony’s mobile number. Ian said he would do that that evening. She did not receive any text from Ian that evening.
(f) At 10.49 a.m. on 12 March 2008, Carol received an email from Tony advising that the directors would not be honouring Voyage’s acceptance of the Premier offer dated 19 and 21 December 2007 until they gained clarity and an update from their insurers. It was then that she replied by those emails I have referred to in paragraphs [20] and [21] herein.
[32] As to Ian’s claim by his affidavit that she “did not accept the offer we made with all its terms”, Carol comments that it is both incorrect and contradicts an earlier statement in his affidavit in which he says, “Carol advised she was prepared to accept the offer on the terms set out in my letter of 21 December 2007”.
[33] Carol concludes that the matter raises issues of Premier’s solvency concerning its ability to pay the settlement agreed.
Reply to opposition
[34] It is provided in an affidavit by Tony.
[35] Regarding Carol’s claim that Premier’s offer had been accepted on 5 March
2008 on “the specified terms”, Tony states that by that stage the original terms that were offered had changed “and the circumstances generally in relation to the offer had changed meaning that there could have been no valid acceptance by Ms Morgan. In particular this was because the parties were not “ad idem” on the extent of any indemnity.”
[36] Tony states “there was no agreement as to the terms of the offer, as originally made, was no longer open for acceptance.” The reason, he says, is that the original offer made to Voyage in late-December was made at the same time as an offer made to other creditors:
It was therefore part of an overall process to get all creditors across the line to ensure Premier could move forward. Premier has [had?] to settle with other creditors with the surety of what Voyage Affaires were going to do.
[37] Tony states that by March 2008 Premier’s insurers had become involved, and therefore they had to ensure that any action they took or proposed to take was not detrimental to it, but was notified and approved by their insurers.
[38] In response to Carol’s claim that Premier did not advise that the offer was withdrawn or modified in any way before it was accepted, he notes that when she did accept the offer she asked for confirmation that it was still “on the table”. Tony said he did not confirm the offer was still on the table. To the contrary, he made it clear to Carol that the offer was no longer available to her to accept, because the directors could not take any action that would contravene the company’s obligations to its insurer. He said he informed her he could not deal with her without involving the insurers.
[39] As to Carol’s claim that the time delay in accepting the offer did not prevent Premier from settling with other creditors, Tony states because of the delay Premier had to settle a raft of other claims “without any surety or certainty on the position of Voyage Affaires”.
[40] Tony disputes that the offer could have been accepted on 5 March 2008, because at least one of the terms (indemnity) was uncertain.
[41] Concerning Carol’s statement that the matter was now a question of Premier’s ability to pay the settlement agreed and raised issues of Premier’s solvency, Tony states, “Premier is solvent. There is a genuine dispute as to the claimed amount.”
[42] Tony concludes:
… the offer, on its original terms, had been withdrawn. There was no certainty of terms given the changed circumstances which were brought about by the delay of Voyage Affaires.
Considerations
[43] I have reviewed the correspondence and communications between the two parties and the events surrounding the critical letters of 19 and 21 December 2007, with a view to assessing the applicant’s claim that no settlement was reached. In essence, the applicant claims that an additional offer of NZ $25,000.00 was a goodwill gesture “in order to have the deal finalised before Christmas.” Premier says it was only prepared to make this offer on the condition that Voyage would provide an indemnity against additional claims from its insurers or its clients. Further, Premier claims the offer was made subject to Voyage signing the letter of 19
December.
[44] Premier’s case is that that letter was not signed. Indeed, Carol’s initial response was that she was unable to accept the offer for she needed to consider the requirement of an indemnity.
[45] An email in January from Carol advised that she needed to run the correspondence through her insurers prior to accepting the offer.
[46] The evidence is there was no further communication until 5 March 2008 when Carol indicated a preparedness to accept the offer on the terms set out in 21
December 2007 but, Premier claims she included a proviso by her inquiry about what further clarification was needed to conclude the agreement.
[47] Premier’s position is that the offer by then lapsed because its insurers had by then become involved. Premier says it was unable to make further settlements without the approval of its insurers.
[48] In response to this advice, Carol emailed Tony twice with her view that she believed she had accepted the offer of 21 December 2007.
[49] Since then progress stalled because of Premier’s claim that their insurer required more time to investigate the Voyage claim.
[50] The applicant’s position is that there is a genuine dispute as to whether or not there was an accord, or concluded agreement for the reasons above stated.
[51] Premier’s evidence is that their offer to pay 66% of the amount in Euros was made “on the basis that Voyage accepted along with all other parties the proposal on offer at that stage”, and further that it was a requirement that settlement took place before, or soon after Christmas 2007. That, they say, was the basis of the offer of the goodwill payment of NZ$25,000.00.
[52] The issue is whether on that account sufficient evidence has been provided of a substantial dispute. If not, then the Court should not set aside the statutory demand. Of course, it is not the Court’s purpose upon these applications to resolve a dispute, rather only to determine whether or not there is a substantial dispute whether or not the debt is due.
[53] Premier’s fundamental position is that no agreement was concluded.
[54] The fault with Premier’s position is that it seeks to introduce evidence of matters to explain the terms of the offers contained in the two letter. Rather, I think the letters can be interpreted on their own, and without reference to other factors by which Premier’s claims they were to be read. In particular, they stated the letter was subject to its early acceptance and because it was part of an overall package to all creditors.
[55] Counsels’ submissions assert that by the letter of 6 December Ian informed Carol of the involvement of Premier’s insurers with the claims; of the deadline that Premier was working towards to pay out settlements out of its own funds rather than waiting for their insurer’s funds; and that Premier was working towards a settlement by 14 December.
[56] However, a reading of that letter does not for a moment suggest those were conditions which attached to settlement negotiations at that time or, indeed, at the time the subsequent critical letters were written.
[57] Rather, the letter provided an update regarding Premier’s attempts to recover monies from its ticketing agent. The letter indicated a preparedness of Premier to make an offer that did not have to rely upon receiving refunds from the ticketing agent, or from an insurer. It said:
We are endeavouring to sell some of the equity in this organisation to enable us to be in a position by 14 December to refund clients.
In essence, and for our present purposes, it said nothing more.
[58] The offers contained in the letters of 19 and 21 December were made in unprotected correspondence. There is nothing in those offers which makes it conditional upon the approval of Premier’s insurers. There is nothing in those letters that requires acceptance by a certain date. Further, and together, it is clear they acknowledge an indebtedness to Voyage in a total sum of Є$89,870.00, for the letters state that a condition of their offer of 66% should acknowledge an agreement that the balance of Є$30,5556.00 “is forgiven”. The letter records that if further funds were received from the ticketing agent or the insurance company Premier would “repay any forgiven monies”.
[59] Premier claims the agreement was subject to Voyage signing Premier’s letter of offer of 19 December 2007. Indeed, Carol by her email dated 21 December acknowledged that she would sign and fax after taking advice – alluding to her intention to consult with her insurers.
[60] A subsequent email of 8 January 2008 confirmed her reticence in signing the letter in its present form.
[61] These facts, says Premier, confirm Carol’s commitment to signing the letter in order for an agreement to be concluded.
[62] Premier also argues that Carol’s communication on 5 March 2008 was conditional acceptance because she asked Ian “what did we need to do from here”. Subsequently, she agreed inquiring whether there was anything Voyage needed to do to put the agreed settlement in place, but she did so in the context of asserting that her acceptance was unqualified. Simply, it is not correct that her acceptance was subject to “clarification” as Premier submits. A proper interpretation of Carol’s emails subsequent to that of 5 March 2008 indicates an expression of concern about the reluctance of Ian and Tony to communicate with her, or their willingness to commit to a timeframe within which payment was to be made.
[63] In summary, neither fact nor inference supports Premier’s claim that between the making of their offer of payment there was some modification of its terms prior to Carol’s unqualified acceptance being given on 5 March 2008.
[64] The only issue remains whether the agreement was subject to her signing the letter of 19 December 2007.
[65] The short answer is there was no such condition which invalidated her acceptance on that date. The letter of offer suggested a preference for a signed acknowledgement at its foot, but it is not expressed as a mandatory, or exclusive, method of acceptance. I accept Mr Webster’s submissions that this is not a contract that must be signed in writing; that acceptance by telephone is sufficient to constitute a binding contract; and that an offer will need to use very clear words to insist that only the prescribed meanings of communication can be used.
Summary
[66] The Court is satisfied the parties concluded an agreement for payment of the full amount referred to in Voyage’s statutory demand. Indeed, there seems no question but that Premier has never denied responsibility for liability for the greater amount of Є$89,870.00. It is a matter of curiosity that Premier has focussed its case around its liability for payment of the compromise amount.
[67] It is not correct that the offer of compromise remained uncertain because of the indemnity provisions. The letter of 21 December 2007 is clear on its face that it required Voyage to “agree to indemnify Premier against any additional claims from your company, insurers or clients”.
[68] I accept the submission of Mr Webster that if indemnity was an issue for Premier’s insurers then that was a matter for Premier. If the matter of indemnity was uncertain, as Premier alleges, then it was duty bound to clarify the matter of indemnity, or withdraw the offer and re-present the offer so that indemnity issue might be made clearer.
[69] I consider the offer was clear on its own terms. It was accepted in an unqualified way on its terms on 5 March 2008.
[70] This case involves an insolvency issue. Premier has provided no evidence of insolvency, save for Tony’s simple assertion that “Premier is solvent”. That statement is not supported by reference to financial accounts or bank statements, or evidence from an accountant.
[71] There is, therefore, no evidence upon which to conclude the company is solvent. Again, and adopting Mr Webster’s submissions, I accept the absence of such evidence on specific aspects of the applicant’s defence of the offer and acceptance claim, and by the conduct of the proceeding, there is a suggestion that the applicant is either unwilling, or unable to pay - or both.
Judgment
[72] The application to set aside the statutory demand is dismissed.
[73] There is an order extending the date for compliance with the statutory demand until 4pm 10 October 2008.
[74] The applicant shall pay the respondent’s costs on a 2B basis, together with disbursements approved by the Registrar. Those disbursements shall include the reasonable costs of counsel’s travel expenses. I further direct as a condition of
satisfying the statutory demand, those costs too much be paid by 4pm 10 October
2008.
ASSOCIATE JUDGE CHRISTIANSEN
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