Roberts v Cameron
[2019] NZHC 1881
•5 August 2019
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2019-409-195
[2019] NZHC 1881
BETWEEN ALAN JOHN ROBERTS
Appellant
AND
ALISTAIR JOHN DOUGAL CAMERON
Respondent
Hearing: 30 July 2019 Counsel:
J M Shingleton for Appellant
G D Jones and M R Prattley for Respondent
Judgment:
5 August 2019
JUDGMENT OF CHURCHMAN J
[1] The appellant appeals against a decision of the District Court which granted summary judgment against him.1
[2] The notice of appeal alleged eight separate errors of law, but the appeal really turns on the following points:
(a)whether a document drafted as a deed, but not validly executed as such, nonetheless creates enforceable contractual rights;
(b)whether the reference in the statement of claim in the District Court to the document being sued on as an agreement rather than a contract meant that the appellant was misled as to the nature of the claim and deprived of the opportunity of raising a reasonably arguable defence;
1 Cameron v Roberts [2019] NZDC 3012.
ROBERTS v CAMERON [2019] NZHC 1881 [5 August 2019]
(c)whether the fact that the co-guarantors Messieurs Vuletich and McIntosh did not sign the settlement agreement means that Mr Roberts is not liable for the portion of the debt they were to guarantee;
(d)whether the respondent had insisted the document had to be executed as a deed;
(e)whether there was sufficient evidence before the Court to establish the cost of the remediation work;
(f)whether the respondent had allowed Gold Mining (Rimu) Limited to access its land to complete the remedial work;
(g)even though it was not raised in the Court below in defence of the summary judgment claim, the appellant also claimed that the District Court had erred in relation to the calculation of interest.
The law
[3] This appeal is a general appeal by way of rehearing.2 The appellant has the onus to persuade the Court that the decision of the District Court is wrong, and it is only if the Court considers the decision is wrong that it is justified in interfering with it.3
[4] A plaintiff seeking a summary judgment must persuade the Court that there is no reasonably arguable defence available to the defendant. Where there are material factual differences or where there are issues of credibility requiring cross-examination, the Court will not normally grant a summary judgment.
[5] Although the Court has a residual discretion, it will be rare where a plaintiff who has established that there is no arguable defence will be denied judgment.4
2 Section 124, District Court Act 2016.
3 Austin, Nichols & Co Inc v Stichting Lodestar [2008] 2 NZLR 141 (SC).
4 Jowada Holdings Limited v Cullen Investments Limited CA 248/02, 5 June 2003.
[6] Summary judgment can be granted notwithstanding the fact that the Court may be required to interpret and apply a contract.5
Facts
[7]The facts were accurately set out in the District Court judgment:6
[1] In the course of carrying out gold mining activities on the defendant’s West Coast land, a company controlled by the defendant (Gold Mining (Rimu) Limited “GMR”) caused damage to the plaintiff’s adjacent land.
[2] In February 2012, the issues between the plaintiff, GMR and the defendant were resolved by an agreement whereby, inter alia, GMR agreed to pay compensation to the plaintiff and undertake remedial work in respect of the plaintiff’s land. The agreement further contained a personal guarantee whereby the defendant guaranteed GMR’s obligations to the plaintiff. Part of the agreement was carried out by GMR which has since gone into liquidation. The plaintiff claims that both the company and the defendant have failed to honour GMR’s complete obligations, nor has the defendant honoured his obligations as required by the personal guarantee.
[3] The plaintiff now seeks summary judgment in the sum of $166,117.50 plus $27,692.30 by way of rental and interest.
Alleged errors
Enforceable contractual rights
[8] There is no doubt that the settlement agreement entered into on 8 February 2012 was drafted as a deed. Equally, there is no doubt that, because it was not signed by Messieurs Vuletich and McIntosh, it was not a valid deed.
[9] However, there was no legal requirement that a settlement agreement such as this be in the form of a deed. A settlement agreement can be a contract, provided the requirements of a contract are met.
[10] The case of Kerr & Anor v Meates7 provides the answer to the question of whether a document drafted as a deed but which fails to meet the requirements for a valid deed nonetheless gives rise to enforceable contractual obligations. In that case,
5 Pemberton v Chappell [1987] 1 NZLR 1 at pp 4 and 8; Heinz v Carter [2001] 2 NZLR 167 at [128].
6 Cameron v Roberts [2019] NZDC 3012.
7 Kerr & Anor v Meates (unreported) HC Christchurch, A136/78, Eichelbaum CJ, 24/5/90.
the High Court held that a deed, which was invalid because one of the parties had not had his signature witnessed in the proper manner, nonetheless created contractually enforceable relations. The Court even went so far as to say that a party who has not executed such a document, would nevertheless be bound if he had accepted the benefit of the other party’s performance.8
[11] In the present case, the District Court found consideration by way of mutual promises existed. In Kerr & Anor v Meates, the Court analysed the consideration as being of a forbearance to sue, or as a compromise of a claim.
[12] The Court in the present case could also have found consideration of that nature. There is no doubt that, as between the plaintiff and defendant, the settlement agreement met the criteria for being a contract: both parties were capable of entering into a contract, there was certainty of subject matter and consideration.
Agreement and contract
[13] Rule 5.29 of the District Court Rules requires a statement of claim to show the general nature of the plaintiff’s claim. The appellant alleges that the statement of claim filed in the District Court did not comply with this obligation. It was submitted that all that was pleaded was the “Deed of Agreement”, and then the use of the descriptive word “agreement”. It is claimed, “The appellant was left unaware the respondent was actually claiming under contract.”
[14]The relevant provisions in the statement of claim say:
6On or around 8 February 2012, the plaintiff, GMR and the defendant reached an agreement to settle the matter of the mining damage and the plaintiff’s losses.
7The agreement was recorded in written (sic) a Deed of Agreement dated 8 February 2012 (Agreement) [bold in original].
[15] The statement of claim went on to plead that the relevant terms of the agreement were relied upon as if pleaded in full.
8 Kerr & Anor v Meates above n 7 at p 19.
[16] Judge Neave expressly found that the statement of claim pleaded the arrangement as an agreement and said that there had been no suggestion that it had been relied upon as a deed.9 That finding is correct.
[17] There is no magic in the use of the word “contract” as opposed to “agreement” for the purposes of informing the defendant of the general nature of the plaintiff’s claim. It was clear that the plaintiff was suing alleging a breach of a contractual relationship rather than the enforcement of a deed.
[18] The appellant’s counsel advanced the proposition that if he had understood that the case was one in contract, there would have been defences available that the defendant could have pleaded. However, when pressed, he was unable to refer to any, and the Court cannot think of any either.
[19] The synopsis of submissions filed and served on behalf of the plaintiff in the District Court made it clear that the settlement agreement was being sued on as a contract and even specifically referred to the decisions of Kerr & Anor v Meates10 and Auto Service Centre Limited v Mountiney11 both of which had involved an improperly executed deed being enforced as a contract.
[20] There was no application by the defendant, on receipt of this synopsis, to amend the statement of defence or to ask for an adjournment on the basis that he had misunderstood the nature of the claim he faced.
[21] I am satisfied that the pleadings adequately informed the defendant that the claim was contractual in nature and that the appellant was neither taken by surprise or deprived of a possible defence.
[22] In relation to the appellant’s assertion that there was no consideration pleaded in the statement of claim, there is no requirement to specifically plead what the consideration for a contract is. If absence of consideration is raised as a defence
9 Cameron v Roberts, above n 6 at [13].
10 Kerr & Anor v Meates, above n 8.
11 Auto Service Centre Limited v Mountiney [2022] DCR 147.
(which was not the case here), the plaintiff will need to prove it. In any event, the Judge’s finding that consideration existed is clearly correct.
Effect of co-guarantors not signing
[23] The appellant challenged the Judge’s finding that Mr Roberts was liable for all of the losses that the settlement agreement set out. He argued that Mr Roberts could not be liable for those amounts that the settlement agreement allocated to Messieurs Vuletich and McIntosh. He reasoned that, because they had not signed the settlement agreement, they had not guaranteed anything. However, this argument overlooks the fact that, in respect of the sums set out in cl 1.6 of the settlement agreement, which were to be guaranteed by Messieurs Vuletich and McIntosh, cl 1.6.4 clearly says that “This guarantee is enforceable jointly and severely”.
[24] This submission also overlooks the finding at [24] of the judgment that the agreement was intended to have immediate force and effect from the date of its completion. It was completed by Mr Cameron and Mr Roberts. It immediately bound them.
[25] The settlement agreement expressly addressed the question of Mr Roberts’ potential liability during the period between him executing the agreement and Messieurs Vuletich and McIntosh doing so. Clause 1.6.6 stipulates:
Mr Alan John Roberts extends his guarantee at 1.6.1 to include the amounts and/or works guaranteed by Messieurs Vuletich and McIntosh until those parties have duly executed this deed. Mr Roberts’ additional guarantee is discharged when the deed has been fully executed.
[26] Mr Roberts therefore clearly agreed to be jointly and severely liable for all sums set out in cls 1.6.1, 1.6.2, and 1.6.3, and the only circumstances in which his guarantee of the sum set out in cls 1.6.2 and 1.6.3 was to be discharged was when Messieurs Vuletich and McIntosh had executed the document.
[27] In his written synopsis on appeal, Mr Shingleton, counsel for Mr Roberts, raised an argument that the guarantee provided under cl 1.6.5 of the settlement agreement, was a pro-rata guarantee and that the sum of $27,692.30 awarded against
the appellant in respect of the “land rental claim” should be pro-rated to be $11,975 being 43 per cent of the overall amount.
[28] However, this was not a point argued by the appellant in the District Court, nor was it raised as a ground of appeal in the notice of appeal. Neither do the appellant’s notice of opposition to the summary judgment application, nor his affidavits in support raise any argument that the rental component of the guarantee should be pro-rated.
[29]No application for leave to amend the notice of appeal was made.
[30] On this appeal, it is necessary for the appellant to show that the Judge made an error. If a point was not taken in the District Court, and no submission directed to it, it cannot be said that the Judge made an error in not addressing it.
Did the respondent require the settlement agreement to be in the form of a deed?
[31] The appellant argues that it was the respondent who required the settlement agreement to be incorporated as a deed and “thus unequivocally bound itself to complying with s 9(3) of the Property Law Act 2007 and s 180 of the Companies Act 1993 …”.
[32] The appellant’s submissions went on to say that the “respondent insisted this be done by way of Deed”.
[33] When questioned by the Court as to the evidence of “insistence” on the part of the respondent that the settlement agreement be executed in the form of a deed, or even the “requiring” of the respondent that the agreement be in the form of a deed, counsel for the appellant acknowledged that there was no such direct evidence and said that it was a matter of inference.
[34] There is no evidence to support the appellant’s contention that GMR “unequivocally bound itself to complying with s 9(3) of the Property Law Act 2007 and s 180 of the Companies Act 1993.” There is no evidence at all as to why the document was drafted in the form of a deed.
[35] The Judge specifically rejected the appellant’s argument that the agreement was only to have force if it was properly executed as a deed. He said:12
The agreement was thus expressly intended to have force, insofar as Mr Roberts was concerned, before the other directors had completed the agreement.
As it could not have effect as a deed until they completed it, it must mean that the agreement was intended to have force prior to the completion of any formalities needed to create a deed, given the fact that the other directors were not present at the meeting where Mr Roberts signed the agreement.
The only conclusion can be that this was an agreement that was intended to have effect from the completion of the agreement by Mr Roberts, notwithstanding it may not yet have been enforceable as a deed.
[36]This summary is undoubtedly correct, and the Judge made no error.
Sufficient evidence regarding remediation cost
[37] The settlement agreement provided for the remediation of the plaintiff’s land by GMR. The relevant part of cl 1.5 reads:
Land remediation is to be undertaken by GMR and completed within eight months (by 1 October 2012). The land is to be remediated as per the specification included in the letter from Cavell Leitch dater (sic) 15 November 2011, except that the requirement to screen the material making up the top three metres is reduced to a requirement to screen the material in the top
1.5 metres from the ground surface.
[38] The clause went on to note that if GMR failed to carry out the work to specification or within the agreed timeframe, Mr Cameron could carry out the work and GMR would be liable for the costs of completing the work.
[39] Security for fulfilment of all payments in respect of the works was to be provided by way of the personal guarantee set out in cl 1.6 (discussed above).
[40] The Cavell Leitch letter of 15 November 2011 set out, in [7.4], detailed specifications as to how the remediation was to occur.
12 District Court decision at [22].
[41] The agreed remediation work was not carried out by 1 October 2012 entitling Mr Cameron to carry it out.
[42] The settlement agreement required Mr Cameron to be given two-three days’ notice of the remediation work commencing. No such notice was ever given, either before or after 1 October 2012.
[43] In July 2017, Mr Cameron obtained a quotation from Westland Contractors Limited to undertake some, but not all, of the detailed remedial work that had been set out in the Cavell Leitch letter of 15 November 2011.
[44] The Westland Contractors’ quote came to $125,600 plus GST of $18,840, a total of $144,440. Other quotes were obtained for different aspects of the remedial work with the total cost, including the Westland Contractors’ costs, being $166,117.50. Demand for payment of this sum was made by letter of 7 August 2017.
[45] Mr Roberts did not accept the Westland Contractors’ component of the remediation costs.
[46] In his affidavit in opposition to the application for summary judgment, Mr Roberts claimed that the quotations obtained by Mr Cameron were “very unreasonable and way beyond the fair market value”.
[47] Attached to his affidavit was a quotation from Henry Adams Contracting Limited which said:
QUOTE FOR BACKFILLING
Further to our conversation yesterday our quote to supply 11,000 cubic metres of fill is $3.50 per cubic metre. We also estimate a cost of $5,000 to $6,000 to sow grass seed and fertilise.
[48] The appellant argued that because of the difference between the two quotations, the Court could not be satisfied as to this aspect of the quantum of the claim. He submitted that issues of credibility or reliability of witnesses arose which required the matter to proceed to trial.
[49] The Judge specifically addressed the quantum of the two quotes. He concluded:13
The difficulty is that “[the Henry Adams Contractor quote]” is somewhat short on detail and more importantly, does not deal with the matters referred to in the Westland Contractors quote relied upon by the plaintiff. That quote is expressly designed to cover the matters set out in the Cavell Leitch letter dated 15 November 2011. That letter was incorporated by reference into the agreement and says that remediation must occur as per the specification from Elliott Sinclair with further modifications. It is patent that the two quotes are simply not comparable.
The defendant purportedly argues that work contained in the Henry Adams quote is sufficient to honour its obligations under the agreement. However, that quote goes nowhere near dealing with the detailed requirements of the agreement, and it is not evidenced that it would in any way comply with the details of the remediation work that the parties agreed to carry out.
[50] The Judge was correct to reject the Henry Adams’ quote as being incapable of raising a bona fide dispute about the quantum of the cost of remediation. Because the Henry Adams’ quote went nowhere near covering the work that was required, it could not provide a proper basis for asserting that there were disputed facts of such a nature to provide a tenable defence. The Judge’s findings in this regard are correct.
Denial of access
[51] The appellant’s submissions asserted that the respondent had “… refused to allow the appellant to attend to performing the remediation work by the due date of 1 October 2012”, and said this gave rise to a tenable argument that the company had discharged its obligations under the arrangement.
[52] As noted in [42] above, at no stage was any request made to Mr Cameron for access to the site for purpose of undertaking the remediation work. The giving of such notice was a requirement of the settlement agreement. The claim that the respondent refused to allow the appellant to perform the remediation work by 1 October 2012 is unsupportable.
13 Above n 12, at [27].
[53] After 1 October 2012, Mr Cameron was clearly entitled to get the work done himself. However, it is also clear that during the period of some five years after 1 October 2012, Mr Roberts did not give notice as required by the contract.
[54] As noted in [9] of the judgment,14 there was an offer in August 2017 by Mr Roberts and Mr Vuletich to undertake the work. However, this was five years after the time had expired for them to do the work and by this stage they had rejected the Westland Contractors Limited quotation saying:
Westland Contractors’ quote is well in excess of quotes we have had to do the work. The per metre rate is more than double. We will not be accepting this and will do the work ourselves.
[55] The particular quotes that Messieurs Roberts and Vuletich referred to in their letter of 14 August 2017 were not put before the Court. The Henry Adams Contracting Limited quote is dated 10 July 2018. It may be that one of the quotes being referred to in the letter of 14 August 2017 was an earlier oral quote from Henry Adams Contracting Limited. However, there is no evidence to that effect. In any event, given that Mr Roberts was clearly rejecting the Westland Contractors’ quote, and that quote covered specifically the specifications in the settlement agreement, there was no obligation on Mr Cameron to permit Mr Roberts to start remedial work when there was no information provided to him as to exactly what the remedial would cover.
Interest
[56] In the statement of claim for summary judgment, the plaintiff sought “Interest from 14 August 2017 to the date of judgment at the contract rate of 8 per cent.”
[57] The District Court judgment records that the plaintiff’s claim for interest was amended at the hearing to reflect the fact that the Interest on Money Claims Act 2016 (“IMCA”) governed the award of interest.15
14 Above n 12.
15 Above n 1 at [32].
[58] However, the Judge went on to award interest at 8 per cent pursuant to cl 1.4 of the Agreement from 14 August, being the date of the expiry of the demand, until its payment.
[59] No issue was raised in the District Court concerning the interest claim. However, there was a challenge to it in the submissions filed in support of the appeal.
[60] The nature of the challenge in the notice of appeal was that cl 1.4 which related to the agreed payment of $185,000 plus GST.
[61] The appellant submits that as the statement of claim filed in the District Court did not seek interest under the IMCA, the Court should not have awarded any interest at all. However, the judgment records that the appellant’s claim was amended at the hearing to reflect that the IMCA governed the award of interest. The Judge was entitled to permit the amendment of the pleadings. There does not appear to have been any challenge by the defendant that amendment to the pleadings,16 and there is no basis for suggesting the IMCA does not apply.
[62] Indeed, s 9 of the IMCA is mandatory in nature and provides that when giving a money judgment, the Court must award interest under the IMCA for the period that begins either:
(a)on the day on which the course of action arose; or
(b)if the amount on which interest is to be awarded was not quantified at the day on which the course of action arose, on a later date that the Court specifies in the judgment as the day at which the amount was quantified. That section that the obligation to pay such interest ends on the date on which the judgment debt (including all interest payable under the Act) is paid in full.17
16 IMCA s 25(4).
17 Interest on IMCA s 9(1).
[63] In the respondent’s submissions dated 5 July 2019, it was conceded that the damages awarded in the judgment arose from breaches of cl 1.3 (the land rental), cl 1.5 (remediation costs) and cl 1.6 (the personal guarantee). It was also conceded that cl 1.4 only applied to the portion of the judgment referable to the breach of cl 1.3 (the rental payment) for which judgment was awarded in the sum of $27,692.30.
[64] The Court was invited to exercise its power under HCR 20.19(1)(a) and (6) to vary the judgment so that interest accrued:
(a)on the sum of $162,264 for land remediation, at the rate of 5 per cent
p.a. from 14 August 2017 to the date of payment pursuant to s 24 of the IMCA; and
(b)on the sum of $24,561.70 for land rental, at the rate of 8 per cent p.a. from 8 February 2012 to the date of payment.
[65] The respondent filed supplementary submissions regarding interest dated 29 July 2019 modifying the amount of interest sought.
[66] The amended submission acknowledged that the respondent had sought interest on the judgment sum in relation to remedial work under s 24 of the IMCA from 14 August 2017 until the date of payment, but s 24 of the IMCA applied “to the period before the date of the money judgment” rather than to the date of payment. Post-judgment interest is subject to the mandatory interest provisions in Part 1 of the IMCA.
[67] I am satisfied that this is an appropriate case for the Court to vary the interest component of the judgment pursuant to HCR 20.19. Although it is unsurprising that the Judge made the interest ruling that he did, given that there was no challenge in the proceedings before him as to the calculation of interest, the award of interest is wrong and acknowledged to be so by the respondent.
[68] Accordingly, the District Court judgment is varied so that interest on the judgment sum is ordered to accrue as follows:
(a)On the sum of $162,265 for the remedial work:
(i)at the prescribed rate of 5 per cent per annum for the period from 14 August 2017 to 25 March 2019 pursuant to s 24 of the IMCA 2016; and
(ii)in accordance with ss 12 and 13 of the IMCA 2016 for the period of 26 March 2019 to the date of payment pursuant to s 10 of the IMCA 2016.
(b)On the sum of $27,692.30 for land rental, at the rate of 8 per cent per annum from 8 February 2012 to the date of payment pursuant to s 22 of the Act.
Conclusion
[69] The appellant has failed to discharge the onus on him to persuade the Court that the decision of the District Court was wrong.
[70] In accordance with the concession made by the respondent in respect of interest, the judgment of the District Court is varied pursuant to HCR 20.19 as set out in [68] above.
[71] The parties are invited to agree costs between themselves. The Court’s preliminary view is that this is a case where costs should follow the event. Although the Court has made some minor adjustment in respect of interest, no point was taken in the notice of opposition to summary judgment in relation to interest. It was also resolved in accordance with the concession made by counsel for the respondent.
[72] If the parties cannot agree on costs, the respondent shall file and serve submissions of no greater than five pages in length within 14 days from the date of this decision, with the appellant having 14 days after that to file and serve submissions in response, again, of no longer than five pages in length. The Court will then resolve the issue of costs on the papers.
[73] If the parties cannot agree as to the calculation of interest, the respondent will file and serve submissions within 14 days of the date of this decision, with the appellant having 14 days after that to respond. The Court will then deal with issue on the papers.
[74] Other than for the variation of the judgment detailed above, the appeal is dismissed.
Churchman J
Solicitors:
First Law Limited, Christchurch for Appellant Cavell Leitch, Christchurch for Respondent
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