Somerfield Investments Limited v Sinful Coffee Limited

[2021] NZHC 1327

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2021-442-13

[2021] NZHC 1327

BETWEEN

SOMERFIELD INVESTMENTS LIMITED

Plaintiff

AND

SINFUL COFFEE LIMITED

First Defendant

LISA BUCHANAN

Second Defendant

Hearing:

4 June 2021

Appearances:

G Engelbrecht for plaintiff

S R Thompson for defendants

Judgment:

4 June 2021

ORAL INTERIM JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    The plaintiff, Somerfield Investments Ltd, pursues a claim against the first defendant, Sinful Coffee Ltd, pursuant to obligations that Somerfield says that  Sinful Coffee has pursuant to a standard Auckland District Law Society lease.

[2]    Somerfield Investments also pursued a claim against the second defendant, Lisa Buchanan, pursuant to a guarantee of Sinful Coffee’s obligations provided by Ms Buchanan at the time that the lease was put in place.

[3]    As I understand the position, there is no dispute as to the terms or enforceability of the lease or the guarantee.

[4]Today in the Nelson list it was necessary to deal with two matters.

SOMERFIELD INVESTMENTS LIMITED v SINFUL COFFEE LIMITED [2021] NZHC 1327 [4 June 2021]

[5]First, Mr Engelbrecht for the plaintiff sought summary judgment in the sum of

$10,228.85, this being the amount of rent and outgoings said to be  payable by  Sinful Coffee to Somerfield Investments in respect of the period 14 May 2020 to    31 August 2020. Summary judgment is sought against both defendants in relation to that amount, the claim against Ms Buchanan of course being pursuant to her guarantee.

[6]    Ms Thompson for the defendants resisted the entry of summary judgment. Her contention, based on the affidavit evidence, was that there was a dispute about whether or not the defendants were liable for that amount.

[7]    However, as Mr Engelbrecht submitted, in her affidavit dated 31 May 2021, Ms Buchanan in her capacity as a director of the first defendant company as well as in her own capacity, acknowledged that the amount of $10,228.85 was payable by Sinful Coffee in respect of the relevant period. She confirmed also that that amount had not been paid.

[8]    Ms Thompson drew to my attention the last four paragraphs of Ms Buchanan’s affidavit in which she referred to cl 43 of the lease, that is to say the dispute resolution clause. There, Ms Buchanan described a discussion that she had had with a representative of the plaintiff in which she had made an offer to settle any amount then outstanding. That offer was apparently rejected. At that stage, Ms Buchanan says she made it clear that if the plaintiff was not prepared to accept her settlement offer she would put everything in dispute.

[9]    The opposition to the entry of judgment as Ms Thompson explained it is that Somerfield Investments has not engaged the dispute resolution process. The law in relation to such matters is clear. A party to a contract is not necessarily obliged to proceed down a dispute resolution path simply because of the existence of the process. There must, the law says, be a genuine dispute before that process is engaged. On the evidence, it is plain that there is no dispute about the obligations of either defendant to pay the $10,228.85 for rental and outgoings in respect of the period between May and August 2020.

[10]   In my view, Somerfield Investments is entitled to summary judgment against both defendants in that amount. The plaintiff will in due course be entitled to make

an application for costs in respect of that component of the case, but, bearing in mind what follows in the balance of this judgment, in my view, costs ought to be reserved as costs in the cause in the meantime.

[11]   The second matter that it was necessary to deal with concerned the balance of the plaintiff’s claim for summary judgment. As to this, it seems that the plaintiff accepts that there is an argument as to whether or not it is entitled to summary judgment. Accordingly, the balance of the plaintiff’s application must be set down for hearing.

[12]Against that background, I make the following orders:

(a)I enter summary judgment for the plaintiff against both defendants jointly in the sum of $10,228.85, and adjourn the plaintiff’s application for a hearing as to whether it is entitled to summary judgment as to the balance of its claim;

(b)By consent I direct that the plaintiff may file an affidavit in reply to Ms Buchanan’s affidavit of 31 May 2021 within 10 working days, that is by 21 June 2021;

(c)Also by consent, I set the balance of the plaintiff’s application for summary judgment down for hearing at 10.00 am on 25 August 2021 (counsel tell me that their joint expectation is that the hearing will take no longer than two hours, but, to ensure that the matter can be disposed of, I direct that the Registrar allow half a day for the hearing), and I direct:

(i)that the plaintiff is to file and serve a hearing bundle and a synopsis of its submissions 10 working days prior to the hearing;

(ii)five working days prior to the hearing the defendants are to file

a synopsis of their submissions.

Associate Judge Johnston

Solicitors:

Cameron & Co, Christchurch for plaintiff Pitt & Moore, Nelson for defendants