NATIONAL INSTITUTE OF WATER AND ATMOSPHERIC RESEARCH LTD v THE TRUSTEES OF THE SHALLARD FAMILY (NO 2) TRUST [2019] NZHC 749

NATIONAL INSTITUTE OF WATER AND ATMOSPHERIC RESEARCH LTD v THE TRUSTEES OF THESHALLARD FAMILY (NO 2) TRUST [2019] NZHC 749 [9 April 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV 2019-485-041[2019] NZHC 749BETWEEN NATIONAL INSTITUTE OF WATER ANDATMOSPHERIC RESEARCH LIMITEDPlaintiffAND THE TRUSTEES OF THE SHALLARDFAMILY (NO 2) TRUSTDefendantsHearing: 9 April 2019Counsel: N M H Whittington and M A Hori Te Pa for PlaintiffNo appearance for DefendantsJudgment: 9 April 2019JUDGMENT OF ELLIS J[1] The National Institute of Water and Atmospheric Research Limited (NIWA)entered into a contract with the trustees of the Shallard Family (No 2) Trust, beingBruce Shallard, Jocelyn Shallard and John Fokerd (the Trustees). Under the finalvariation of the contract the Trustees were to pay NIWA $4,178,526 plus GST, in returnfor services provided by NIWA.[2] NIWA subsequently performed all its obligations under the contract.[3] The Trustees made part-payments under the contract, the most recent being on9 July 2018. This left a balance owing of $1,583,858.90 including GST.[4] In September NIWA demanded payment of the Trustees. Mr Shallardconfirmed that the Trustees were unable to pay the remainder of the contract debt.[5] On 10 December 2018 a settlement agreement was executed whereby:(a) The Trustees agreed to pay NIWA the balance of the debt by 1 February2019, and NIWA would forbear from commencing a proceeding untilthat time. Interest on the debt due would be charged at a rate of 11.5 percent, compounding monthly.(b) The Trustees agreed to sign and execute a Notice of Admission ofClaim, and deliver a copy to NIWA's solicitors, who would hold it inescrow. If the Trustees failed to make payment by 1 February 2019,NIWA's solicitors were authorised to file and serve the executed Noticeof Admission of Claim when it commenced proceedings.[6] The Trustees did sign and execute a Notice of Admission of Claim, incounterparts, on 13 December 2018.[7] The Trustees failed to pay NIWA the balance of the debt due and owing by1 February 2019. To date, the Trustees have not made any further payment of thebalance of the debt due and owing since the last payment received on 9 July 2018. Thebalance owing as at 1 April 2019 was $1,734,280.32 including GST and interest.[8] The plaintiff filed its statement of claim, together with the Notice of Admissionof Claim on 4 February 2019.[9] Because the executed Notice held in escrow by NIWA's solicitors and filed inCourt was an electronic copy, on 25 February 2019 Cull J issued a minute saying that:(a) on entry of judgment under High Court Rule 15.16, the Court shouldhave original signed documents;(b) an affidavit of service should be filed; and(c) the matter should be set down for a short formal proof hearing.[10] An affidavit of service has since been filed, as have affidavits setting out theabove narrative and annexing relevant documents (including the settlementagreement). The Trustees' solicitors have also advised that they do not hold theoriginal signed Notice of Admission of Claim by the trustees, but rather counterpartsin electronic form. They advise it is unlikely that they will be able to obtain theoriginal, if it still exists. It seems that the Trustees' solicitors have also never held theoriginal signed Notice.[11] The formal proof hearing was listed before me this morning.[12] To the extent it is necessary to do so, I accept Mr Whittington's invitation toapply rr 1.5 and 1.9 and waive compliance with r 5.6 (which requires the signature ondocuments filed to be an original signature1). I consider it would be in the interests ofjustice to do so, in light of the following matters:(a) the terms of the settlement agreement (including cl 3.2 whichspecifically provided that NIWA's solicitors should be provided a"copy" of the executed Notice of Admission of Claim to hold inescrow);(b) the acceptance of service on behalf of the Trustees; and(c) the fact that the Trustees' solicitors have also never held the originalsigned Notice of Admission of Claim.[13] I therefore regard the Notice of Admission of Claim as valid and effective interms of r 15.16. The plaintiff is entitled to judgment in accordance with it.1 It is unnecessary to get into the technical requirements of r 5.6 means in this judgment. The factthat the document was accepted for filing does appear to have some bearing on the matter.Orders[14] The defendants have admitted that they are liable to the plaintiff for breach ofcontract. Accordingly, the plaintiff is entitled to:(a) judgment in the sum of $1,583,858.90, being the amount of the debtdue under the contract, including GST;(b) interest under s 22 of the Interest on Money Claims Act 2016 on thatsum, charged at 11.5 per cent per annum compounding monthly.[15] The plaintiff also sought costs, which were not dealt with in the Notice ofAdmission of Claim. After obtaining further instructions this morning,Mr Whittington was able to confirm that this aspect of the claim was not be pursued.I record that, for the avoidance of doubt._____________________________Rebecca Ellis J