THE TOWN OF JUPITER, FLORIDA v ENDEAVOUR CAPITAL LIMITED [2021] NZHC 1110 [18 May 2021]

THE TOWN OF JUPITER, FLORIDA v ENDEAVOUR CAPITAL LIMITED [2021] NZHC 1110[18 May 2021]IN THE HIGH COURT OF NEW ZEALANDREGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-566[2021] NZHC 1110BETWEEN THE TOWN OF JUPITER, FLORIDAPlaintiffAND ENDEAVOUR CAPITAL LIMITEDFirst DefendantAND NEVILLE JORDANSecond DefendantHearing: 24 March 2021Appearances: R A Morris for the PlaintiffNo appearance for the First DefendantN Jordan – Second Defendant in personJudgment: 18 May 2021JUDGMENT OF ASSOCIATE JUDGE LESTERThis judgment was delivered by me on 18 May 2021 at 4.00 pmpursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy Registrar18 May 2021[1] In this proceeding, the plaintiff, The Town of Jupiter, Florida (Jupiter), seeksjudgment against the first defendant, Endeavour Capital Limited (Endeavour), underr 15.7 of the High Court Rules 2016.[2] Rule 15.7 provides:15.7 Liquidated demand(1) If the relief claimed by the plaintiff is payment of a liquidated demandin money and the defendant does not file a statement of defence withinthe number of working days required by the notice of proceeding, theplaintiff may seal judgment in accordance with this rule for a sum notexceeding the sum claimed in the statement of claim and—(a) interest (if any) payable as of right calculated up to the dateof judgment (if interest has been specifically claimed in thestatement of claim); and(b) costs and disbursements as fixed by the Registrar.(2) If the plaintiff claims costs and disbursements, the plaintiff must filea memorandum setting out the amount claimed and how that amountis calculated, together with any submissions in support of the claim.(3) A Judge or a Registrar may authorise the sealing of a judgment undersubclause (1) if satisfied that the relief claimed by the plaintiff fallswithin this rule.(4) A Registrar has the jurisdiction and powers of the court under theserules to fix costs and disbursements under subclause (1)(b).(5) For the purpose of this rule and rule 15.9, liquidated demand meansa sum that—(a) has been quantified in, or can be precisely calculated on thebasis of, a contract relied on by the plaintiff; or(ab) is quantified in, or can be precisely calculated on the basis of,or by reference to, an enactment relied on by the plaintiff; or(b) has been determined by agreement, mediation, arbitration, orprevious litigation between the same parties; or(c) is a reasonable price for goods supplied or services rendered(when no contract quantifies the price).[3] The Registrar declined to enter judgment in favour of the plaintiff in earlyDecember 2020 and the Registrar's decision in that regard was endorsed byJustice Doogue. In early December 2020, the time for the filing of a statement ofdefence (9 December 2020) had not expired. Jupiter nonetheless sought judgment inreliance on what it said was an admission of liability, but the Registrar considered theevidence in that regard to be insufficient to justify the entry of judgment.[4] With the time for the filing of a statement of defence having expired, and withno steps having been taken by either defendant, the matter came before Mallon J whoissued a judgment on 4 February 2021.1[5] Before Mallon J, judgment was sought on the basis that no defence had beenfiled. Her Honour, however, declined to enter judgment and referred the matter fora hearing before an Associate Judge, as she had two concerns. The first concern wasthat the affidavit of service in respect of the second defendant, Mr Neville Jordan,referred to him having received initial disclosure at the Wellington Regional Hospital.The second concern was that while Mr Jordan was sued as guarantor, plaintiff'scounsel properly brought to the Court's attention that Mr Jordan had not signed theguarantee he was sued on.[6] When the matter came before me on 24 March 2021, plaintiff's counsel advisedbecause of the Supreme Court's decision in Brougham v Regan, Jupiter no longersought judgment against Mr Jordan personally.2 On that basis, Jupiter's claim againstthe second defendant was dismissed on 24 March 2021.[7] However, Jupiter wishes to seek judgment against the first defendant,Endeavour.[8] Because Mr Jordan is the sole director and shareholder of Endeavour, theplaintiff filed further evidence clarifying the circumstances in which Mr Jordan wasserved with the initial disclosure at hospital. The evidence is that Mr Jordan arrangedwith the process server to accept the papers at the reception area of the hospital andnothing about the circumstances indicated he was an inpatient. Subsequently, the sameprocess server served Mr Jordan with further documents and arranged to meet at therailway station on Bunny Street, Wellington. Again, there was nothing in those1 The Town of Jupiter, Florida v Endeavour Capital Ltd [2021] NZHC 95.2 Brougham v Regan [2020] NZSC 118.circumstances to indicate that Mr Jordan could not, on behalf of Endeavour, deal withthis proceeding.[9] The evidence satisfies me that the proceedings were properly served onEndeavour and that it has failed to file a defence. As to whether the claim is fora liquidated demand, I am satisfied (as was Mallon J) that the amount payable underthe Settlement Agreement which forms the basis for the cause of action sued upon isa liquidated amount. I will refer below to how that amount has been calculated.[10] Jupiter sues on a Settlement Agreement that it entered into with Endeavour on12 August 2014. That Agreement required Endeavour to make time payments againstan agreed indebtedness of USD 337,176. The payments were to be made overa number of years. Endeavour's first default occurred in June 2015 and the finalpayment was made in April 2017. The evidence discloses solicitors for Jupiterfollowing up on the missed payments and receiving numerous promises of paymentwhich it seems came to nothing.[11] Given the unequivocal terms of the Settlement Agreement and the promises ofpayment, I was satisfied when this matter was called before me that it was appropriatethat judgment be entered in favour of Jupiter for liability for the amount properlypayable under the Settlement Agreement. Judgment as to liability as againstEndeavour was entered at the hearing on 24 March 2021.[12] On 24 March 2021, the amount claimed had been calculated asUSD 210,876.24 as at 31 December 2020. The statement of claim calculated theamount due as at 2 December 2019 as USD 206,550.52, including interest.[13] Under the Settlement Agreement, interest is payable in respect of theoutstanding balance.[14] The final payment was due on 1 November 2016, described in the SettlementAgreement as the "Maturity Date". Up until that point, the Settlement Agreementprovides that the balance of the indebtedness payable by Endeavour "shall accrueinterest from the date of this Agreement at the rate of five percent (5%) per annum".[15] After the Maturity Date, the Settlement Agreement records that:If the Final Payment is not timely made on or before the Maturity Date,interest shall accrue on the unpaid principal balance of the ReimbursementIndebtedness at the rate of ten percent (10%) per annum from the MaturityDate until paid.[16] The calculation of the amount claimed is produced by way of a Loan PaymentSchedule which shows the scheduled payments required under the SettlementAgreement, the interest accrued and the actual amounts paid.[17] It was clear from the Schedule that interest had been compounded monthly.The Schedule shows the monthly calculation of interest with the opening balance ofthe following month increasing by the amount of the previous month's interest.[18] The Settlement Agreement contains the following clause:11.10 Governing Law. This Agreement and all transactionscontemplated by this Agreement shall be governed by and construed andenforced in accordance with the laws of the State of Florida, except thatFlorida's law of conflicts of law shall not be applied to make the law of anyother state or nation control the interpretation or legal effect of this Agreement;provided however, that the laws of New Zealand shall control the legal effectof the Admissions of Claim and Statement of Claim and the manner andmethods of their enforcement.[19] Accordingly, the Settlement Agreement is to be construed in accordance withthe laws of the State of Florida. Evidence as to whether the laws of Florida providethat contractual interest should be compounded on a monthly basis, was not before theCourt on 24 March 2021.[20] Having raised this issue with counsel, I gave the plaintiff the opportunity toproduce expert evidence as to the laws of Florida, or to elect to accept simple interest.[21] The proceeding was adjourned to allow counsel to take instructions and asa result a new schedule has been produced claiming simple interest. The amount forwhich judgment is claimed is now USD 178,899.39. I have no reason to doubtcounsel's calculation which now calculates the amount claimed to the date of filingthe statement of claim.[22] Accordingly, having already entered judgment for liability, I fix the questionof judgment at USD 178,899.39.Costs[23] The Settlement Agreement contains a clause entitling Jupiter to recover itslegal costs arising from a default on an indemnity basis. Rule 15.7(2) of theHigh Court Rules requires a plaintiff to show how such an amount claimed iscalculated. The invoices produced do not have any detail of how the costs claimed aremade up as they refer to a covering letter accompanying the invoice which containedthat detail. Those letters are not produced.[24] With this issue also being raised on 24 March 2021, further material has nowbeen filed which satisfies me that the costs claimed are reasonable. Again, the relevantclause is not limited to recovering only litigation costs but all costs arising fromdefault. Keeping in mind the first default was in 2015, the costs are reasonable.[25] Accordingly, there is judgment for the plaintiff in respect of costs in the sumof NZD 43,592.50 (excluding GST), USD 4,850.00 and disbursements ofNZD 4,132.32 (excluding GST).[26] The draft order dated 13 April 2021 is approved for sealing.[27] I apologise to counsel for the delay in getting this judgment completed ascounsel's memorandum was only just referred to me.__________________________________Associate Judge LesterSolicitors:Bell Gully, Auckland