Disputed payment of a $26,000 Christchurch construction debt is being fought out between an Australian owned property developer and local division of US multinational Aegion Corporation with developer David Stewart Henderson a central figure unsuccessfully disputing personal liability as guarantor.
Kitchener & Co (1989) Ltd is owned and controlled by Australian-based Tony Henderson. His New Zealand-based father David took the lead in an apartment earthquake remediation on Christchurch’s Bealey Avenue.
Aegion’s Concrete Solutions Ltd was contracted in 2019 to carry out seismic strengthening with the epoxy application of fibre reinforced sheets and injection of resin into cracks.
The High Court was told Kitchener fell behind on progress payments. A separate payment agreement was signed in March 2020. Kitchener agreed to meet rescheduled dates for payments, with interest running at 1.5 per cent per month on all payments outstanding. David and son Tony signed as guarantors.
In turn, Concrete Solutions agreed to resume work and finish the job.
On completion, $26,000 was left unpaid. David Henderson said the job had not been done properly, itemising alleged defects.
Justice Osborne ruled a ‘no set-off’ clause in their March 2020 payment agreement meant full payment was due regardless of any dispute about quality of the work. It was analogous to the ‘pay now, argue later’ rule contained in the Construction Contracts Act.
He dismissed out of hand Kitchener’s argument that there had been a ‘total failure of consideration’ such that the payment agreement could not be enforced. Courts have refused to enforce contracts where one side had failed totally to deliver what was promised. In this case, Concrete Solutions had done the work, albeit with a dispute over quality of the work done.
Henderson father and son were both held liable on their guarantees, with Justice Osborne commenting there was ‘not a skerrick of injustice’ in holding them to the guaranteed payment agreement.
The court was told some $96,500 is now owed, with accruing interest added to the original $26,000 debt.
Mr Henderson (snr) was banned in 2023 from managing any company for three years expiring March 2025 for his mismanagement of the earthquake remediation, leaving creditors unpaid.
Kitchener & Co (1989) Ltd & Henderson v. Concrete Solutions Ltd – High Court (22.03.24)
24.074
Note: David Stewart Henderson, referred to in this blog post, is not to be confused with South Island property developer and serial bankrupt David Ian Henderson.