Michael
and John Chow, having bought Stonewood Homes’ franchise assets following its
February 2016 receivership, failed in a $556,900 guarantee claim against
Stonewood founders Brent Mettrick and Tony Andersen because their guarantee had
expired.
The High Court case
concerned franchise debts allegedly owed by Stonewood Homes (Hamilton) Ltd. When the March 2008 Hamilton franchise
agreement was signed, Mettrick and Andersen had interests in both Stonewood
Homes as the franchisor and Stonewood (Hamilton) as an area franchisee. Stonewood Homes rights as franchisor were
subsequently sold by its receiver for an undisclosed sum to Stonewood Homes NZ
(ChCh) Franchisor Ltd; a company owned by the Chow brothers.
The High Court was told
Chows’ company sued Mettrick and Andersen for $556,920 allegedly being debts
owed by the Stonewood (Hamilton) business they had guaranteed. They signed a standard Stonewood guarantee
when investing in the Stonewood (Hamilton) franchise. The Hamilton area franchise agreement was for
a three year term with a right of renewal for a further three years. The franchise was not renewed when the
initial term expired in March 2011; the franchise just ran on. The allegedly unpaid debts of $556,920 arose
after this date. Associate judge Osborne
ruled the guarantee signed by Mettrick and Andersen expired in March 2011. Nothing in the contract imposed liability for
debts beyond this date. Stonewood Homes
(Hamilton) went into liquidation in January 2016.
Stonewood
Homes v. Mettrick – High Court (19.07.17)
17.082