Sarwar Construction Limited v Fluid Engineering Consultancy Limited - [2022] NZHC 482

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001317

[2022] NZHC 482

UNDER the Companies Act 1993 and the High Court Rules 2016

BETWEEN

SARWAR CONSTRUCTION LIMITED

Plaintiff

AND

FLUID ENGINEERING CONSULTANCY LIMITED

Defendant

Hearing: 7 March 2022

Appearances:

D G Collecutt for the Plaintiff

E R Anderson for the Defendant

Judgment:

16 March 2022

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 16 March 2022 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Loga Barristers & Solicitors, Auckland Braun Bond & Lomas Ltd, Hamilton

D G Collecutt, Auckland

SARWAR CONSTRUCTION LTD v FLUID ENGINEERING CONSULTANCY LTD [2022] NZHC 482
[16 March 2022]

Introduction

[1] In July 2020, Fluid Engineering Consultancy Ltd (Fluid) provided engineering design services for a development at Matamata. It issued an invoice on 31 July 2020 to the director of the building company undertaking the project, Sarwar Construction Limited (Sarwar). Sarwar refused to pay the invoice, demanding further information and seeking to renegotiate the arrangement.

[2] Fluid ceased work on the project. In July 2021, it served a statutory demand on Sarwar for payment of the invoice, plus legal fees and interest, amounting to
$19,798.67. Sarwar now applies to set aside that statutory demand.

[3] The application requires me to decide whether the statutory demand should be set aside because:

(a)there was no contract between Fluid and Sarwar;

(b)Fluid was not entitled to progress payments;

(c)Fluid has not provided enough information about the value of the work;

(d)Fluid repudiated the agreement by refusing to negotiate a variation;

(e)the invoice is not a GST invoice addressed to Sarwar.

Background facts

[4] Fluid is a hydraulic, electrical and mechanical engineering consultancy firm that provides building design services. In April 2020, Fluid was approached to provide engineer consultancy services for a development project at 49-51 Firth Street, Matamata (the Project). Sarwar, a building company, was undertaking the Project. Sarwar’s sole director and shareholder is Nasir Sharifi.

[5] Ardern Architectural Limited (Ardern), who was already working on the Project, initially liaised with Fluid through its director, Mark Gibson. Mr Gibson had a phone call with Ardern on 22 April 2020 to discuss the scope of Fluid’s work on the

Project. An email exchange between Ardern and Mr Gibson followed, in which Fluid clarified its pricing proposal.

[6] On 30 April 2020, Fluid provided a short form agreement (the Agreement) to Ardern, signed by Mr Gibson.1 The Agreement, which identified Ardern as “the Client”, specified the services that Fluid would undertake along with a breakdown of costs for each service. The services were hydraulic, civil, mechanical, electrical and fire/sprinkler engineering design (preliminary, developed and detailed) and modelling. The total contract price under the Agreement was $90,792.50 (including GST).

[7] There is a conflict in the evidence between Mr Sharifi and Mr Gibson as to whether Mr Sharifi or Ardern initially contacted…

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.

Keep reading for free

Create a free CaseChat account to read Sarwar Construction Limited v Fluid Engineering Consultancy... and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2022] NZHC 482
Decision Date: 16 March 2022

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, was tasked with deciding an application by Sarwar Construction Limited to set aside a statutory demand issued by Fluid Engineering Consultancy Limited for the payment of $19,798.67 plus legal fees and interest. Fluid issued the statutory demand after Sarwar refused to pay an invoice for engineering design services provided for a development project in Matamata. The court had to determine whether the statutory demand should be set aside on the grounds that there was no contract between Fluid and Sarwar, Fluid was not entitled to progress payments, Fluid had not provided enough information about the value of the work, Fluid repudiated the agreement by refusing to negotiate a variation, or the invoice was not a GST invoice addressed to Sarwar.

The court examined the contemporaneous documents and communications between the parties to determine whether Sarwar was the contracting party. The court found that Sarwar was the contracting party and liable for the amount in the statutory demand. The court rejected Sarwar's submission that Fluid was not entitled to progress payments, finding that there was no basis for implying that Fluid could only invoice upon completion of the contract works. The court also found that Fluid had provided enough information to verify the value of the work completed and that there was no genuine or substantial dispute about whether the work had been completed or its value. The court further found that Fluid had not repudiated the agreement by refusing to provide a proposal for variations to the agreement or engage in negotiations, as Sarwar did not pursue this ground of opposition. Finally, the court found that the invoice was addressed to Sarwar's representative, Nasir Sharifi, in his capacity as Sarwar's representative, and that the error could be easily addressed by changing the name on the invoice to Sarwar.

The court concluded that there was no genuine or substantial dispute as to whether the debt that was the subject of the statutory demand was due for payment by Sarwar. Therefore, the court dismissed Sarwar's application to set aside the statutory demand. Sarwar was ordered to pay Fluid's costs on a 2B basis, with disbursements as fixed by the Registrar.

Orders