Scully v Holland
[2024] NZHC 2313
•16 August 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2017-404-002724
[2024] NZHC 2313
BETWEEN ANTHONY JAMES SCULLY
Plaintiff
AND
MADELINE CAROL HOLLAND
Defendant
Hearing: 10-12 June 2024 Appearances:
J Goddard for the Plaintiff
R Barnsdale for the Defendant
Judgment:
16 August 2024
JUDGMENT OF TAHANA J
This judgment was delivered by me on 16 August 2024 at 3.30pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors:
Jenny Beck Law, Dunedin
Lambton Chambers, Wellington
SCULLY v HOLLAND [2024] NZHC 2313 [16 August 2024]
Introduction
[1] Mr Scully claims that Ms Holland owes him AUD 1,298,474 under an alleged agreement for project management services for a construction project in Papua New Guinea (PNG). Mr Scully never went to PNG but did provide plans, proposals and other documents to Ms Holland over several years for what he understood was to be a significant infrastructure project in PNG. Mr Scully claims that in late 2017 or early 2018, Ms Holland secured a construction project in PNG but failed to inform him.1 He has received no payment for his services.
[2] Mr Scully relies on an alleged oral agreement in late 2012 or in the alternative, a written agreement with Ms Holland in May 2013.
[3] Ms Holland disputes that she entered into any oral or written agreement and says if there was such an agreement, it was conditional on funding for the potential project, which never eventuated. Further, Ms Holland says that to the extent that Mr Scully did any work, he did so without promise of payment from her.
Issues
[4]I therefore need to determine:
(a)Did the parties enter into an oral or written agreement?
(b)If yes, what are the terms of the agreement?
(c)Did Ms Holland breach the agreement?
(d)If yes, should damages should be awarded to Mr Scully?
[5]Before considering each of the above issues, I set out the relevant background.
1 Amended Statement of Claim dated December 2019, at [18].
Background
Ms Holland’s activities in PNG
[6] Despite Ms Holland asserting that she was only engaged in philanthropic activities in PNG, the documents indicate that she was undertaking commercial activities. There is a letter dated 23 June 2010 from Springs Real Estate Ltd (Springs Real Estate) of PNG informing the PNG Immigration Department of their invite to Ms Holland (then known as Madeleine Panhuis) to jointly develop and expand into property development and associated business activities.
[7] On 28 June 2011, Ms Holland was offered a position as a sales consultant and trainer at Springs Real Estate.
[8] On 25 October 2011, Ms Holland signed a letter from the Hela Cultural Foundation Inc (Hela Foundation) indicating that the Hela Foundation was seeking a building contracting company to erect infrastructure in the province. The letter notes that the program kicks off in 2012.
[9] There is also a statutory declaration dated 25 October 2011, which records that Ms Holland had been appointed as a “Legal Advisor/Advisor” to the Hela Foundation. The statutory declaration refers to Ms Holland as the Property Development co- ordinator at Getsmart Steel Kitset Homes of New Zealand (Get Smart Homes). There is no New Zealand company with that name.
Mr Scully signs confidentiality undertaking
[10] On 29 November 2011, Ms Holland and Mr Scully for C-Style Homes Ltd (C- Style Homes) signed a confidentiality agreement (Confidentiality Agreement). Mr Scully was a director and shareholder of C-Style Homes. The Confidentiality Agreement notes that Ms Holland is the holder of information relating to a contract in PNG and wishes to disclose that contract and other related information to C-Style Homes to assist it to evaluate whether to pursue business ventures with Ms Holland.
[11] The Confidentiality Agreement includes a deed of undertaking from Mr Scully agreeing to be bound by the Confidentiality Agreement.
Mr Scully provides information to Ms Holland
[12] In early 2012, Mr Scully provided quotations to Ms Holland for proposed infrastructure (housing and other facilities) for projects in PNG.
[13] On 11 April 2012, Mr Scully enquired with Ms Holland as to what projects are likely to eventuate. In response, Ms Holland said “I have contract building a shed or half lodge”.
[14] By 13 April 2012, Mr Scully indicated to Ms Holland that he needed something in place as he had not received anything in return for his work. In response, Ms Holland indicated that she would update him.
[15] The communications indicate that Ms Holland would repeatedly ask Mr Scully to send information and indicated the project was imminent and Mr Scully would provide information to Ms Holland.
[16] By 10 October 2012, Mr Scully sent Ms Holland a draft contract for him to act as project manager in PNG. The draft contract referred to a weekly salary of AUD 5,500 plus GST (AUD 110 per hour — 50-hour working week) for a 45-week working year.
[17] In October 2012, Mr Scully also travelled to Cairns, Australia to meet with Ms Holland. Mr Scully took notes of his meetings with her, which record that they discussed the infrastructure project including accommodation, induction for staff, project management, communication systems and the housing and infrastructure requirements for the project.
[18] Mr Scully requested that Ms Holland confirm when he would get paid for his work noting that he had been working for over a year without any payment. In a text message on 15 December 2012, Ms Holland said that she would reimburse Mr Scully for some of his time “as soon as [I] get paid” which she was hoping would be soon.
[19] Ms Holland continued to tell Mr Scully that the funding was close, and the project would start soon.
[20] On 18 February 2013, Mr Scully sent a text to Ms Holland noting that he had not seen any “formal documentation that will convince my wife’s solicitor that I will have gainful employment”. In response, on 19 February 2013, Ms Holland asked him how much he needed to pay his IRD bill. She also indicated that she had put in a budget to cover expenses.
[21] On 22 February 2013, Mr Scully sent Ms Holland an “updated contract” with terms that he be paid a weekly salary of AUD 5,500 plus GST (AUD 110 per hour – 50 hour week) as compensation for his position. The contract notes that the position will be carried out in PNG.
[22] Ms Holland continued to request information from Mr Scully and he continued to send documents to Ms Holland for various housing types and for the cost of transport infrastructure including planes and airports.
[23] By 31 March 2013, Ms Holland said that she was flying to Cairns to get her funding noting that it “[i]s very under cover”.
Parties sign “Project Managers Contract”
[24] In May 2013, Mr Scully and Ms Holland signed a document entitled “Project Managers Contract”. The second page is dated 19 May 2012 next to Ms Holland’s signature and the third page is dated 20 May 2012 next to Mr Scully’s signature. The document refers to Get Smart Homes as the “Employer” and Anthony James Scully as the “Employee” and records that Get Smart Homes is hiring Mr Scully for the position of Project Manager to be carried out at various locations in PNG.
Activities after signing the “Project Managers Contract”
[25] Get Smart Homes was registered as a business name in PNG on 3 September 2013.
[26] On 5 September 2013, Ms Holland appeared in a newspaper article which states that the Dubu Nationals Cultural Organisation had launched a second project to
build the Hela Province Dubu Nations headquarters in Hela and that the first project was for the building of houses and they were to be built by “Get Smart”.
[27] Ms Holland also communicated with a Robyn Fifield on 13 October 2013 indicating that the Hela Province had been granted PGK 80 million and that “hhq” should be granted some of this. Ms Holland had asked for “three five million” to get them up and running.
[28] There is another article dated 14 October 2013 indicating that the new administration building and commercial centre for Hela will be built by Curtain Brothers after it signed a PGK 80 million contract with the provincial government.
[29] On 10 November 2013, Mr Scully emailed Ms Holland summarising a call he had with her the day before. That email records that Ms Holland had said that they were partners with Curtain Brothers. Mr Scully asked, “when can you expect to receive some funding, from any of the above sources, and therefore be able to pay me?”
[30] There is a letter dated 28 March 2014 signed by Ms Holland to the Governor of Hela Province regarding the construction of infrastructure at Tari, Hela province and setting out the proposed development including the proposed number of buildings and cost estimates. The letter states:
We are privileged to be involved in this important project and we will commit to working with you in this important project for Tari in the Hela Province.
[31]On 4 May 2014, Ms Holland said the project was in the pipeline.
[32] On 29 May 2014, Mr Scully indicated that in the interests of hastening the project, he would reduce his standard fee by half for work done over the previous years.
[33] On 29 November 2014, Ms Holland emailed Mr Scully indicating that they were ready to start and once she had got funding, she would appoint the team.
[34] Ms Holland continued to request information from Mr Scully and to make statements about the funding for the project. Mr Scully continued to provide information and ask about funding.
[35] On 5 October 2016, Ms Holland wrote to Mr Scully notifying him that neither she nor Get Smart Homes wanted any further contact with him. She denied that there was any employment contract between them and requested that he desist representing that he was an employee or consultant of Get Smart Homes.
[36] The parties continued to engage with each other and Mr Scully continued to claim that he was owed money. When Ms Holland did not pay him anything, Mr Scully issued these proceedings in 2017.
[37]I now consider the issues set out at [4] above.
Did the parties enter into an oral agreement?
Legal principles
[38] To determine whether there is an oral agreement, I must examine all the circumstances and communications between Mr Scully and Ms Holland to see if Mr Scully has made an offer that Ms Holland has subsequently accepted. The terms of the agreement must be sufficiently certain.
[39] It is for the court to consider whether the words or conduct amounts to an offer. The court will take an objective approach, and so be concerned not with a person’s actual subjective intention but with the apparent outward manifestation of that intention.2
[40] Whether acceptance of an offer has occurred depends upon consideration of the words and documents that have passed between the parties and the totality of the
2 Stephen Todd and Matthew Barber (eds) Burrows, Finn and Todd on the Law of Contract in New Zealand (online ed, Lexis Nexis) citing Smith v Hughes (1871) LR 6 QB 597 at 607 per Blackburn J.
offeree’s conduct.3 Acceptances are generally viewed objectively, the concern being not with the actual subjective intention of the offeree but the outward manifestation of their intent.4 The acceptance must be communicated to the mind of the offeror.
[41] The importance of consensus was enunciated in Wellington City Council v Body Corporate 51702 (Wellington) by Tipping J in this way:5
The essence of the common law theory of contract is consensus. It follows that for there to be an enforceable contract, the parties must have reached consensus on all essential terms; or at least upon objective means of sufficient certainty by which those terms may be determined. Those objective means may be expressly agreed or they may be implicit in what has been expressly agreed. Taking price as an example, for a contract to be enforceable the parties must have agreed upon the price, or at least they must have agreed upon objective means of sufficient certainty whereby the price can be determined by someone else, or by the Court. If the price is left for later subjective agreement between the parties, the contract is not enforceable.
[42] Applying the above principles, I consider whether the circumstances indicate an oral agreement between Mr Scully and Ms Holland.
Circumstances and conduct of parties
[43] Mr Scully claims that he and Ms Holland entered into an oral agreement on the following terms:6
(a)Ms Holland would pay him AUD 110 per hour (excluding GST and expenses) based on 100 hours per month for work completed over the previous year (2011–2012) up to a total of 1000 hours.
(b)Mr Scully would continue to supply services to Ms Holland and would invoice her monthly at a rate of AUD 110 per hour plus expenses.
(c)Mr Scully would remain on standby to travel and provide ongoing services and advice in order to secure the construction project in PNG.
3 Todd and Barber, above n 2, at [3.4.1] citing Broadcasting Corp of New Zealand v Daniels (1988) 2 NZBLC 103,535 at 103,541 per Hardie Boys J.
4 Robinson v Hemachandra Holdings (NZ) Ltd (2006) 7 NZCPR 245 (CA) at [24]
5 Wellington City Council v Body Corporate 51702 (Wellington) [2002] 3 NZLR 486 (CA) at [30].
6 Amended statement of claim dated December 2019, at [7].
[44] Mr Scully claims that the alleged oral agreement is based on the draft agreement dated 10 October 2012. Mr Scully’s evidence was that on 15 December 2012, Ms Holland agreed that she would pay him. Ms Holland’s text message that day, however, says that she will reimburse him “for some of your time as soon as [I] get paid” which she was hoping would be soon.
[45] I am not satisfied that Ms Holland’s text message or Mr Scully’s evidence establishes that Ms Holland agreed in her text message to the terms of the draft agreement provided by Mr Scully on 10 October 2012. At most, Ms Holland indicated that she would pay him for “some” of his time as soon as she got paid. That does not indicate any agreement to pay Mr Scully at AUD 110 per hour or at a weekly rate as set out in the draft agreement provided in October 2012. At best, it indicates an intention to pay him something if she herself got paid.
[46] Further, Mr Scully cannot have considered that he had a binding agreement because he continued to ask Ms Holland about the contract and then provided an updated draft agreement in February 2013.
[47] I am not satisfied the circumstances and communications provided indicate that the parties entered into an oral agreement as claimed by Mr Scully.
Did the parties enter into a written agreement?
[48] Mr Scully claims that Ms Holland signed the “Project Managers Contract” on 19 May 2013 to engage him as project manager in PNG which was conditional on Ms Holland securing the promised project contracts.7
[49] Mr Goddard for Mr Scully argued that the written agreement does not include the special conditions page signed by Ms Holland because Mr Scully had not inserted his signature on that page. That argument ignores the fact that Ms Holland signed the special conditions page and returned it with the other signed page on the same day, 19 May 2013, thereby indicating that she had made a counter-offer that included the
7 At [16].
special conditions. If Mr Scully did not insert his signature on the special conditions page, there is no binding written agreement.
[50] Mr Gordon Sharfe, Chief Document Examiner for the police, provided evidence for Mr Scully. Mr Sharfe confirmed that the pages of the “Project Managers Contract” all contain the same marks which indicate that they were scanned and sent together. Mr Scully therefore received Ms Holland’s counter-offer with the special conditions at the same time as he received her signature on the second page. Mr Scully’s evidence that he ignored the special conditions page does not assist. What is relevant is the outward manifestation of Ms Holland’s intent as offeree. The document establishes that Ms Holland accepted Mr Scully’s offer subject to the special conditions so that it was a counter-offer. If he did not accept the counter-offer with the special conditions, there is no binding agreement.
[51] I consider that it is more likely than not that Mr Scully inserted his signature on the special conditions page on 20 May 2013. My reasons for this are as follows.
[52] First, Mr Scully sought to argue that Ms Holland inserted his signature on the special conditions page along with the date of 20 May 2013. Ms Holland did not need Mr Scully to sign the special conditions page as her signature is sufficient to establish that she was only willing to agree to Mr Scully’s terms if the special conditions were included. If Mr Scully chose not to sign then he could not bind Ms Holland when she had only agreed to be bound subject to the special conditions. There was no need for Ms Holland to insert Mr Scully’s signature to ensure the special conditions applied.
[53] Second, Mr Scully and not Ms Holland had an electronic version of his signature. Mr Scully accepted he inserted his electronic signature on the second page but not on the special conditions page. Mr Sharfe’s evidence is that the source of the electronic signature is the same for both pages but that the signature on the third page is slightly different in size. Mr Sharfe’s evidence does not assist in determining who inserted the signature — it simply confirms that the signature is electronic and was not handwritten onto the document.
[54] Third, despite Mr Scully giving evidence that his practice was to record a validation statement when an electronic signature was used, the expert evidence was that the signature on the second page was also electronically inserted. Mr Scully accepted it was his signature. There is no validation statement next to that signature. That indicates that Mr Scully used an electronic signature without a validation statement on page two, so it is unsurprising that the special conditions page does not include a validation statement.
[55] Fourth, that Mr Scully accepted the special conditions by inserting his electronic signature is consistent with his amended statement of claim which pleads that the agreement was conditional on the defendant securing the promised project contracts. If the special conditions page was not signed by Mr Scully, there is no basis for him to assert this condition because there is no condition to that effect on page one or two of the Agreement.
[56] I am therefore satisfied that it is more likely than not that Mr Scully’s signature on the special conditions page was inserted by Mr Scully. If I am wrong, then Mr Scully has failed to prove that there was a binding written agreement with Ms Holland as she only agreed to the terms subject to the special conditions.
[57] I also reject Mr Goddard’s submission that the written agreement is based on an earlier version dated 6 May 2013. At the hearing, Ms Holland produced a further version dated 6 May 2013 signed by Ms Holland but not signed by Mr Scully. That version has the weekly salary changed from AUD 10,000 to 5,500. The document also has the following handwritten text:
This agreement it is subject to start of H.H.Q Project in Papua New Guinea on mobilized funding.
[58] Although not pleaded, Mr Goddard argued that the parties entered into an unconditional agreement based on the 6 May 2013 version on or about 12 May 2013 because Mr Scully sent an invoice dated 13 May 2013 which included two weeks salary at the rate of AUD 5,500 per week.
[59] I do not accept that the invoice is evidence of Mr Scully having accepted the agreement dated 6 May 2013 in circumstances where Mr Scully went on to sign the 20 May 2013 version. If there was already a binding agreement on 6 May, there would have been no need for Mr Scully to sign the later agreement. Further, the 6 May version also included a funding condition. The 6 May version reinforces Ms Holland’s position that she was only willing to agree to Mr Scully’s offer if it was subject to a funding condition.
[60] The more likely explanation is that the 6 May version was not sent to Mr Scully after Ms Holland signed it and instead, she typed up the special conditions page and sent it to Mr Scully with the other two pages on 19 May 2013.
[61] I therefore accept that there was a written agreement signed by Ms Holland on 19 May 2013 and signed by Mr Scully on 20 May 2013. The written agreement included the special conditions page.
[62] Turning to the parties, the agreement refers to “Get Smart Homes” as the “Employer” and Mr Scully as the “Employee”. GetSmartKit Homes Properties was registered as a business name in PNG on 3 September 2013. That is after the written agreement was signed. GetSmartKit Homes Properties appears to be a business name only and not a company. There was no evidence of any company with that name incorporated in PNG or New Zealand. It follows that Ms Holland can only have contracted in her own name so that the written agreement is between her personally and Mr Scully.
What are the terms of the written agreement?
[63] The agreement specified that the position was “to be carried out at various locations in Papua New Guinea.” Mr Scully’s responsibilities as “Employee” were:
1. Developing the project plan
2. Sourcing and supply of Project design and material supply
3. Managing the project stakeholders and gaining approval
4. Managing the project team
5. Managing the project risk
6. Controlling project changes
7. Managing the project schedule
8. Managing the project budget
9. Measuring project progress
10. Managing the project conflicts
11. Closing out the project
[64] Ms Holland for Get Smart Homes as Employer was to pay Mr Scully AUD 5,500 plus GST (AUD 110 per hour — 50 hour week) as compensation for the position. The salary was to be based on a 45-week working year. The salary would also be reviewed on arrival in PNG.
[65] The agreement is subject to the laws of PNG although the parties have both agreed that the Court has jurisdiction to determine Mr Scully’s claim.
[66] The special conditions provide that the contract is subject to the release of funding from the “Funds Manager” (who is defined as Ms Holland) and the “Controller” (not defined) in PNG, as follows:
The contract is subject to the release of the funding from the (FUNDS MANAGER) and CONTROLLER in PAPUA NEW GUINEA, funds are
currently in WESTPAC BRANCH in png well secured in a bank company account.
We cannot be [specific] on the day of release because of security reasons,
At the last meeting before I left Papua New Guinea 9th May 2013 MADELINE CAROL HOLLAND “FUNDS MANAGER” was informed of 3 weeks .this is for the start of the project hhq is southern highlands of PAPUA NEW GUINEA, HELA PROVINCE.
I MADELINE CAROL HOLLAND a citizen of NEW ZEALAND and CEO of GET SMART STEEL KIT HOMES NEW ZEALAND AND PAPUA NEW
GUINEA the proposal to build a campsite and 500 house in the remote region in Papua New Guinea was accepted in 2010.
[67] The content of the special conditions infer funding is secured but not released. It also infers that the project will commence in three weeks and that Ms Holland is simply waiting for the Controller to release the funds.
[68] Having set out the above terms, I now consider whether Ms Holland has breached the written agreement.
Did Ms Holland breach the written agreement?
[69] The written agreement includes the special conditions page. A person for whom a condition is inserted has an obligation to take all reasonable steps to enable the condition to be fulfilled.8 The onus of proving an alleged failure to take such steps fall with the party asserting the failure.9 Mr Scully therefore bears the onus on establishing that Ms Holland did not meet this obligation.
[70] Because of the way Mr Scully advanced his case, he did not plead that Ms Holland had failed to take reasonable steps to achieve the condition but rather claimed that she had secured a construction project in PNG in late 2017 or early 2018 but had failed to notify him of this.
[71] I therefore consider the evidence to determine whether Mr Scully has established, on the balance of probabilities, that funding was released to Ms Holland for the project. If not, I then consider whether Ms Holland took reasonable steps to secure funding.
[72] Mr Scully’s only evidence in support of the release of funding is hearsay evidence of a third party who told him on 28 August 2018 that Ms Holland “had a major contract in PNG and had subcontracted a second project to another company”. A hearsay statement is not admissible except as provided in s 17 of the Evidence Act and counsel for Mr Scully did not seek to argue that s 17 is applicable.
[73] Mr Scully also refers to a New Zealand company QProjects Invest PNG NZ Ltd that Ms Holland incorporated in January 2018. That is the extent of Mr Scully’s evidence in support of his claim that Ms Holland had received funding. I turn now to consider whether Ms Holland’s evidence assists in determining whether funding was released to her.
8 Lerner v Schiehallion Nominees Ltd [2003] 2 NZLR 671 (HC) at [29].
9 At [29].
[74] Ms Holland was not a credible witness. Her evidence was incoherent and difficult to follow. Ms Holland openly admitted that she had made things up. The documents indicate that Ms Holland repeatedly told Mr Scully that the project was about to start and that she had funding. Ms Holland accepted that she had misled Mr Scully:
Q. Why did you say: “I have private funding”?
A.Or maybe that was I was trying to get someone to come on board. I’ve never had funding. I swear on an oath.
Q. So, you said: “I have private funding” –
A.Maybe it’s misleading on my part. My intentions were all good, your Honour.
[75] Ms Holland was also clearly engaging in commercial activities in PNG despite saying that she was only involved in charitable endeavours. A PNG newspaper article dated 5 September 2013 indicates that a project had been launched that involved Ms Holland’s business, Get Smart:
This is the second project to be launched. The first one launched about 3 weeks ago was the announcement of the building of houses for the 35 local loyal commissioners of Dubu Nations in the country. The houses are estimated to cost a minimum of K300,000 per house and will be built by New Zealand based Real Estate and Property company ‘Get Smart/Smart Move International’ starting at Ensisi Valley for Port Moresby members and moving to other centres.
The Hela headquarters project as well as the commissioner’s housing scheme projects will come at a total cost of K15 million from funds secured from the Association’s donors and those committed by the government as per the Framework Treaty on Technical and Development Cooperation, signed between Papua New Guinea and the State of Israel on July 17, 2013.
[Emphasis added]
[76] A press release on 14 October 2013 indicates that Curtain Brothers had been awarded the contract to build a new administration building and commercial centre for Hela. It does not refer to Ms Holland or Get Smart Homes.
[77] It is Mr Scully’s own email to Ms Holland on 10 November 2013 that refers to a partnership between Ms Holland and Curtain Brothers but there is no other evidence of any agreement between Curtain Brothers and Ms Holland or Get Smart Homes. I
consider that it is likely that Ms Holland misled Mr Scully into believing that she had partnered with Curtain Brothers so that he would continue to supply her with documentation, but it is unlikely that Curtain Brothers would have contracted with Ms Holland. There was no evidence to this effect other than Mr Scully’s email about his conversation with Ms Holland.
[78] Ms Holland’s conduct was misleading and suggested that she had funding when she did not. On 23 November 2013, Ms Holland sent Mr Scully an email stating that her proposals had now been approved through government, secretaries and governors and that the secretaries were processing the documentation for her. In cross- examination, Ms Holland accepted that this had been told to her but that she no longer listens to these government assurances.
[79] In cross-examination, Ms Holland said that she had put together the letter dated 28 March 2014 to the Governor because Mr Scully had accused her of lying. She admitted the document was not a real document.
[80] I am not satisfied that the evidence establishes that funding was released to Ms Holland for an infrastructure project. I accept that Ms Holland was continuing to mislead Mr Scully so that he would continue to send her documents so that she could use those in PNG. I cannot determine, on the evidence available, what in fact was happening in PNG. I am satisfied that Ms Holland deliberately misled Mr Scully into believing that there would be a project.
[81] The evidence does not establish that Ms Holland had been awarded a project in PNG for which Mr Scully could act as project manager. Ms Holland’s conduct was misleading and deceiving. That however, is not the basis of Mr Scully’s claim against Ms Holland. Mr Scully instead relies on a breach of contract, and he must establish, on the balance of probabilities, that funding was released as required by the special conditions. I consider that it is more likely than not that Ms Holland had made up the project and made up that funds were in a bank account awaiting release.
[82] Further, Mr Scully himself acknowledged on 26 September 2013 that the agreement related to employment once the project started, as follows:
The contract is a separate matter that relates to my full time employment once the project starts – agreed no problems!
[83] The above communication indicates that Mr Scully was aware that until there was a project, he could not expect to be remunerated. Mr Scully was not obliged to continue to engage with Ms Holland, but he chose to do so in the hope that some funding might eventuate. The fact Mr Scully sent invoices does not indicate that he is entitled to receive payment.
[84] The evidence indicates that Mr Scully was not employed at the time. Mr Scully did not provide any evidence of other job offers that he had declined so that he was available to go to PNG. Mr Scully never went to PNG. Mr Scully’s actions in continuing to provide Ms Holland documents were undertaken at his risk. It should have been obvious to him that Ms Holland could not be trusted. There is a real question as to the legitimacy of Ms Holland’s activities.
[85] In these circumstances, I am not satisfied that the funding condition was ever met. I am also not satisfied that Ms Holland did not take reasonable steps to secure funding as the documentation indicates that she was trying to secure projects – with limited success.
[86] I also have concerns as to the enforceability of the agreement. The agreement is subject to PNG laws and regulations and no evidence was provided to indicate that the agreement complies with the employment laws of PNG. It would be odd to have an employment agreement that could only be terminated by consent of both the employer and employee. The agreement was written by Mr Scully who set out the terms he wanted. Ms Holland’s communications are jumbled, short and are mainly in the form of text messages. Further, the company, Get Smart Homes, does not exist in New Zealand and is only registered as a business name in PNG.
[87] Further, Mr Scully sent invoices to Ms Holland in the name of Pacsteel Ltd10 (Pacsteel) a company that was removed from the Companies Register on 13 September
10 The company was named Pacsteel Ltd until 19 October 2010 and then changed its name to The Pacific Group [1975] – Investment Corp – Ltd. It was removed from the Companies Register on 13 September 2013.
2013. Mr Scully sought to explain this as an oversight, but he continued to use Pacsteel’s name well after that company had been removed. On 28 August 2015 he told Ms Holland that he would “continue with the Pacsteel Invoices, which as I alluded to will change when we move to a fulltime contract.”
[88] Mr Scully himself sought to distinguish between an employment agreement (which would only take effect in PNG when there was an actual project) and his work at Pacsteel when he was providing estimates and proposals to Ms Holland. There is no agreement between Pacsteel and Ms Holland. He tried to get Ms Holland to pay for his time before any project began in PNG but that was never agreed to by Ms Holland.
[89] I am not therefore satisfied that Mr Scully has proven that Ms Holland has breached the written agreement when the evidence does not establish that funding was released to Ms Holland for an infrastructure project. Nor am I satisfied that Ms Holland failed to take reasonable steps to get the funding released. The evidence indicates that she was undertaking activities in PNG to try to secure funds and her communications about funding were misleading.
[90] Having reached this conclusion, I acknowledge that Ms Holland lacked any credibility and admitted to being untruthful. She is not free from fault, but Mr Scully has limited his claim to breach of contract and the evidence does not establish that there was a project for which Mr Scully could be employed as project manager or that funding had been released to Ms Holland for this purpose. The evidence suggests that there are real issues as to the legitimacy of Ms Holland’s activities in PNG.
Result
[91]I dismiss Mr Scully’s claim against Ms Holland for breach of contract.
Costs
[92]I understand that both parties are legally aided. Had that not been the case, I
consider that costs should lie where they fall given my findings as to Ms Holland’s conduct.
Tahana J
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