Sika (NZ) Limited v Pegasus Engineering Limited - [2023] NZHC 834

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-412

[2023] NZHC 834

BETWEEN
SIKA (NZ) LIMITED

Plaintiff

AND

PEGASUS ENGINEERING LIMITED

First Defendant

AND

GAVIN ERNEST LAWRY

Second Defendant

Hearing: 20 March 2023

Appearances:

A W Johnson and C W Gambrill for Plaintiff D J C Russ for First and Second Defendants

Judgment:

19 April 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 19 April 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

SIKA (NZ) LTD v PEGASUS ENGINEERING LTD [2023] NZHC 834 [19 April 2023]

Introduction

[1] Sika (NZ) Ltd (Sika) supplies a range of specialty products for construction and industrial purposes including intumescent coatings.

[2] Pegasus Engineering Ltd (Pegasus) is an engineering company. Gavin Lawry is a shareholder and director of Pegasus.

[3] Pegasus was contracted to undertake the supply and fabrication of structural steel for the construction of buildings at Lincoln University. This included the application of an intumescent coating to the structural steel to protect its load bearing capacity against fire.

[4] On 24 June 2021, Mr Lawry completed a credit account application form (the credit application) with Sika on behalf of Pegasus. The credit application was accepted by Sika. Pegasus thereafter placed orders with Sika for goods relating to the Lincoln University project. Between September 2021 and April 2022 Sika supplied Pegasus with intumescent coatings and related products at a total price of $518,536.82 for which Pegasus has paid Sika $274,406.02, leaving a balance of $244,130.80.

[5] Sika applies for summary judgment against Pegasus and Mr Lawry to recover the $244,130.80 along with contractual interest and costs. It brings its claim against Pegasus as the party to whom the product was supplied under the terms of the credit application. It claims against Mr Lawry on the basis he signed the credit application form as a guarantor of Pegasus’s obligations. Both Pegasus and Mr Lawry dispute the claims.

[6] There is no dispute that Sika supplied the product that was ordered by Pegasus and at the correct price. Pegasus says, however, that in placing orders with Sika it relied upon representations made by Sika that the intumescent coatings were suitable for both off-site and on-site application. It says such representations were false and misleading as the products were unsuitable for on-site application or incapable of being applied on-site to the specifications required for the project. Pegasus says as a result of the false and misleading representations it has suffered losses that exceed the

amount claimed by Sika. It says it has crossclaims which are a defence to summary judgment.

[7] Sika does not accept that any false or misleading representations were made but says, in any event, Pegasus is unable to oppose summary judgment because the credit application included an effective no set-off clause. Sika says Pegasus must pay the balance owed and pursue its crossclaims in other proceedings. Responsibly, Sika accepts that if…

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 Sika (NZ) Limited v Pegasus Engineering Limited 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: [2023] NZHC 834
Decision Date: 19 April 2023

CaseChat Overview and Summary

In the case of Sika (NZ) Limited v Pegasus Engineering Limited, the plaintiff, Sika, sought summary judgment against the defendants, Pegasus and Gavin Lawry, for outstanding payment of goods supplied. The primary issue was whether the no set-off clause in the credit application precluded Pegasus from raising its crossclaims against Sika in defence of summary judgment. The court found that the no set-off clause was effective and prevented Pegasus from raising its crossclaims as a defence. Furthermore, the court dismissed Sika's claim against Gavin Lawry, as it found that there was an arguable defence that he did not intend to guarantee Pegasus's obligations.

The court granted summary judgment in favour of Sika against Pegasus for the outstanding amount of $244,130.80, along with contractual interest and costs. The court dismissed Sika's application for summary judgment against Gavin Lawry and reserved costs for further discussion between the parties.

Orders